Swiggy, a prominent player in India’s food delivery industry, proudly announced its achievement of profitability in its food delivery business in March 2023. CEO and founder Sriharsha Majety shared the exciting news in a blog post, highlighting the company’s unwavering focus on innovation and efficiency as the driving forces behind this significant milestone. Majety also mentioned that the company had made substantial investments in its grocery delivery service, Instamart, which competes with Zomato-owned Blinkit and startup Zepto, but the peak of those investments is now behind them.
Mr. Majety emphasized that Swiggy’s unwavering focus on innovation and efficiency has been the driving force behind this significant milestone. He also mentioned the substantial investments made by the company in its grocery delivery service, Instamart, which competes with Zomato-owned Blinkit and startup Zepto. However, the peak of these investments is now behind them, allowing Swiggy to further solidify its profitability.
This profitability milestone comes at a time when the food delivery industry is facing fierce competition and regulatory scrutiny. Swiggy itself underwent multiple rounds of layoffs in the past six months, with plans to downsize its workforce reported in December and January. Nevertheless, Swiggy’s CEO remains optimistic about the company’s future prospects, expressing confidence that the company is on track to achieve contribution neutrality for its food delivery business in the next few weeks.
Swiggy’s achievement of profitability is a significant milestone not only within the Indian food delivery market but also globally. The company has joined the ranks of very few global food delivery platforms to achieve profitability in less than nine years since its inception. Notably, Swiggy’s profitability even surpasses that of its publicly-listed rival, Zomato, on the eve of the latter’s quarterly earnings report.
However, it’s important to note that while Swiggy’s food delivery business has become profitable, the company as a whole is not yet profitable. Swiggy continues to make substantial investments in its instant grocery delivery business, Instamart. Insider reports suggest that Instamart is currently burning over $20 million per month. Despite recent efforts to scale back spending on Instamart, Swiggy remains committed to its growth and expansion in this area.
The achievement of profitability in its food delivery business is a testament to Swiggy’s resilience and ability to navigate a challenging and competitive market. Swiggy’s focus on innovation, operational efficiency, and customer satisfaction has enabled it to establish a strong foothold in the industry. This success instills confidence among investors as Swiggy prepares for future endeavors, including a potential initial public offering (IPO).
Looking ahead, Swiggy plans to continue enhancing its technology infrastructure, expanding its delivery fleet, and exploring new avenues for growth. By staying true to its mission of revolutionizing the way India eats, Swiggy is well-positioned to shape the future of the food delivery market and set new benchmarks for success.
