The fast meal delivery and rapid commerce industries in India are still being shaped by the fight between Swiggy and Zomato. For FY24, both businesses revealed noteworthy financial achievements, showcasing different approaches and performance indicators. Their findings provide insights into market dynamics and future potential as the sector develops.
Revenue Growth and Gross Order Value (GOV) Performance
Consolidated operational sales for Swiggy increased sharply by 36% to ₹11,247 crore ($1.36 billion) in FY24. Still, Zomato remains in the lead, having increased its sales by 27% to ₹12,114 crore ($1.46 billion), which gives it a 7% advantage over Swiggy.
Swiggy announced a $4.2 billion gross order value (GOV), of which $3 billion was from food delivery and $1 billion was from its rapid commerce division, Instamart. Comparatively, Zomato’s overall GOV increased by 48% to $5.7 billion, of which $3.8 billion came from its meal delivery business and $1.5 billion from its rapid commerce unit, Blinkit.
This indicates that while both companies experienced robust growth, Zomato is outperforming Swiggy in terms of both overall revenue and GOV, driven by stronger performance in quick commerce and food delivery.
Profitability and Loss Reduction
The most striking difference between the two rivals is their respective paths to profitability. Swiggy’s net loss declined by 44%, dropping to ₹2,350 crore ($283 million) in FY24, and its adjusted EBITDA loss fell by 54% to ₹1,800 crore. These improvements were achieved by controlling expenses, including a 26% reduction in advertising and promotional spending and a 6% cut in employee benefits.
Zomato, however, reached a significant milestone by reporting a net profit of ₹351 crore ($42 million), a major turnaround from previous losses. In its core food delivery business, Zomato achieved an EBITDA profit margin of 2.8%, compared to Swiggy’s EBITDA loss margin of just -0.2%. Swiggy did announce in May 2023 that its food delivery business had become operationally profitable, but it still lags behind Zomato in overall profitability.
Quick Commerce: The New Growth Engine
Zomato and Swiggy have made significant investments in the fast-growing Indian e-commerce market. Zomato’s Blinkit brought in $1.5 billion, demonstrating the latter’s more momentum in the market, compared to Swiggy’s $1 billion from Instamart.
The management of Swiggy stated that the company can now concentrate on more lucrative expansion as the peak of its investments in Instamart is behind them. On the other hand, Zomato continues to make significant progress with Blinkit, leveraging the growing need for quick grocery delivery. Quick commerce is predicted to keep growing, thus this market will probably be a major arena of competition for the two businesses.
Dineout and New Business Ventures
Through the 2022 acquisition of Dineout, Swiggy was able to join the restaurant reservation and bill payment sector, which is dominated by Zomato. With a 98% increase in gross order value (GOV) to ₹2,200 crore in FY24, Dineout saw a considerable narrowing of its losses. Swiggy’s business strategy has undergone strategic diversification as a result of its success in rapid commerce and expansion into this industry.
Meanwhile, by acquiring Paytm’s entertainment ticketing division, Zomato is expanding into new areas. With this move, Zomato will be able to provide movie, sports, and event ticketing services, which will increase user engagement and open up new revenue sources for the company outside of rapid commerce and meal delivery.
IPO and Market Valuation
Swiggy intends to become a publicly listed firm like Zomato, as evidenced by its April confidential application for a $1.25 billion initial public offering. Zomato’s current market value of $26 billion is 40% higher than Swiggy’s potential valuation of up to $15 billion, according to reports. This discrepancy is a result of Zomato’s more robust financial results, especially its profitability, as well as its greater reach in terms of GOV and monthly active users.
Nonetheless, as the business reduces its losses and improves its operational efficiency, investors may become very interested in Swiggy given its growing presence in rapid commerce and restaurant services as well as its improving financial metrics.
