Zomato vs Swiggy: Business Revenue & Growth Strategy 2024

The food delivery industry in India has seen a massive transformation in recent years, especially with the increasing trend of online food ordering. More people are now comfortable with ordering food through apps, thanks to the convenience of getting meals delivered right to their doorstep.

This shift in consumer behavior was accelerated by the COVID-19 pandemic, when dining out became difficult, and people turned to food delivery services in large numbers.

Two companies, Zomato vs Swiggy, are at the forefront of this booming industry. They have dominated the market by offering a wide variety of restaurants, user-friendly apps, and fast delivery services.

While both platforms compete fiercely for market share, each has its unique strategies, features, and innovations that have helped shape the food delivery landscape in India.

The goal of this blog is to compare Zomato vs Swiggy in terms of market share, financial performance, user experience, and the innovative strategies they have adopted to stay competitive.

We will explore how each company has performed, how they attract customers, and what the future may hold for these two giants in the Indian food delivery market.

Founders of Zomato vs Swiggy

Zomato’s Founders

• Deepinder Goyal: Co-founder and CEO of Zomato, Deepinder Goyal started the company in 2008. He is a graduate of the Indian Institute of Technology (IIT) Delhi. Initially, Zomato was launched as “Foodiebay,” a restaurant discovery platform. Under Goyal’s leadership, Zomato evolved into a major food delivery giant, expanding globally and going public in July 2021.
• Pankaj Chaddah: Co-founder of Zomato, Pankaj Chaddah also graduated from IIT Delhi. He played a significant role in the early days of Zomato but stepped down from the company in 2018 to explore new ventures.

Swiggy’s Founders

• Sriharsha Majety: Co-founder and CEO of Swiggy, Sriharsha Majety is an engineer and entrepreneur. He co-founded Swiggy in 2014 with a vision to make food delivery faster and more efficient. Majety holds an engineering degree from BITS Pilani and an MBA from IIM Calcutta.
• Nandan Reddy: Co-founder of Swiggy, Nandan Reddy worked alongside Majety to build Swiggy into one of India’s largest food delivery platforms. He holds a degree from BITS Pilani.
• Rahul Jaimini: A co-founder and technical architect of Swiggy, Rahul Jaimini was instrumental in building Swiggy’s robust tech platform. Jaimini left Swiggy in 2020 to join Pesto Tech, but his contributions in developing Swiggy’s tech foundation are significant.

Food Delivery Industry in India

Historical Growth and Current Market Trends

The food delivery industry in India has experienced rapid growth in recent years. In 2020, the industry was valued at around $5 billion and has been growing at an impressive rate of 30% each year.

This growth is expected to continue, with the market projected to reach $21 billion by 2026. The COVID-19 pandemic played a significant role in accelerating this growth, as more people opted for food delivery due to restrictions on dining out.

The rise in online food delivery is largely driven by changing consumer habits. People now prefer the convenience of ordering food from their favorite restaurants rather than cooking or dining out. The increasing use of smartphones and easy access to the internet have also contributed to this trend.

Role of Zomato vs Swiggy in Shaping the Industry

Zomato and Swiggy have been the key players driving the growth of food delivery in India. Both companies have invested heavily in technology, making their platforms more efficient and user-friendly. Their apps offer a wide range of restaurant choices, real-time tracking of deliveries, and multiple payment options, making the overall experience seamless for customers.

These companies have also played a major role in transforming the way restaurants operate. By partnering with Zomato and Swiggy, restaurants have been able to expand their customer base and increase their revenues, especially during the pandemic when foot traffic was low.

Impact of COVID-19 on the Food Delivery Market

The COVID-19 pandemic brought about significant changes in consumer behavior. With people confined to their homes, food delivery became a lifeline for many. Zomato and Swiggy both saw a surge in demand during the lockdown periods.

However, they had to adapt quickly to the situation by implementing safety measures like contactless delivery, increased hygiene standards, and ensuring the safety of their delivery partners.

Zomato and Swiggy also introduced new features and services during the pandemic to cater to changing needs. For example, Zomato launched Zomato Pro, offering exclusive discounts, while Swiggy expanded its quick-commerce division, Instamart, to deliver groceries.

Market Share and Financial Performance of Zomato vs Swiggy

Revenue and Profitability

In terms of financial performance, Zomato and Swiggy have taken different paths. Zomato reported a profit of INR 116.90 crore in FY23, with a total revenue of INR 5,506.90 crore. In the first half of FY24, Zomato further strengthened its position by posting a profit of INR 591 crore, with revenues reaching INR 3,431 crore.

On the other hand, Swiggy generated much higher revenue in FY23, totaling INR 8,265 crore. However, Swiggy struggled with significant losses, which amounted to INR 4,179 crore for the year. These losses are largely due to Swiggy’s investments in its quick-commerce business, Instamart, which requires a lot of capital to scale.

Market Share Evolution

In 2020, Swiggy held a 52% share of the food delivery market, leading Zomato. However, in the following years, Swiggy lost some of its market dominance to Zomato. By 2023, Zomato had gained 54% of the market, while Swiggy’s share dropped to 46%.

Several factors contributed to this shift in market share. Zomato adopted a more localized approach by expanding aggressively into Tier 2 and Tier 3 cities, while Swiggy focused more on replicating its success in major metro areas like Bengaluru. Zomato’s long-term strategy of tapping into smaller markets has helped it grow its user base and increase profitability.

Company Share Price and Valuation of Zomato vs Swiggy

Zomato Share Price and Valuation

Zomato’s IPO: Zomato went public in July 2021, listing on the Bombay Stock Exchange (BSE) and National Stock Exchange (NSE). The IPO was a major success, marking Zomato as the first Indian food delivery platform to go public.

Share Price: Zomato’s share price has seen fluctuations, as with any listed company. As of early 2024, Zomato’s stock has shown strong performance, with a significant rise in value in 2023 after a challenging post-IPO period. Zomato’s current price is Rs.267 on September 10, 2024

Market Valuation: Zomato’s current market valuation stands at around $10-12 billion, driven by its profitability and expansion into new markets. The company has attracted significant investor interest due to its dominant market share and innovative strategies.

Swiggy Valuation and IPO Plans

Valuation: Swiggy is currently valued at around $7.85 billion (as of late 2023). This valuation comes despite Swiggy’s significant losses, as investors are betting on its long-term growth potential, particularly in the quick commerce segment through Instamart.

IPO Plans: Swiggy is preparing for a $1 billion IPO in 2024. This move is expected to raise more capital for the company, helping it balance its investments in quick commerce and improve profitability. The IPO is likely to increase scrutiny on Swiggy’s financial performance and its efforts to turn a profit.

Key Innovations by Zomato and Swiggy

Zomato’s Innovations

1. Zomato Hyperpure: Zomato launched Hyperpure to supply restaurants with fresh, high-quality ingredients, directly from farmers and producers. This initiative helps restaurants maintain consistent quality while also reducing their reliance on external suppliers.
2. Zomato Instant: Understanding that customers often want faster deliveries, Zomato introduced its 10-minute delivery service, Zomato Instant, which uses strategically located fulfillment stations to provide ultra-fast service.
3. Zomato Intercity Legends: This feature allows customers to order famous dishes from different cities and have them delivered to their homes. For example, you can order biryani from Hyderabad or sweets from Kolkata.
4. Voice Instructions for Delivery: To improve the delivery process, Zomato allows users to give voice instructions to guide delivery partners to their exact location, especially helpful in areas with confusing addresses.

Swiggy’s Innovations

1. AI Integration: Swiggy leverages artificial intelligence to predict customer orders, optimize delivery routes, and offer personalized restaurant recommendations based on user preferences and behavior.
2. Swiggy One: This service integrates all of Swiggy’s offerings—food delivery, grocery delivery via Instamart, and delivery of goods via Swiggy Genie—into one app, making it easier for users to access multiple services.
3. Drone Delivery Trials: Swiggy has experimented with drone deliveries to reduce delivery times, particularly for grocery deliveries, showing its commitment to innovation in logistics.
4. Pocket Hero: Swiggy introduced Pocket Hero to provide discounts and cashback to customers, making food delivery more affordable for budget-conscious users.

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Consumer Experience and Usability

User Base and Monthly Active Users (MAUs)

As of May 2023, Zomato had approximately 30 million Monthly Active Users (MAUs), compared to Swiggy’s 24 million.

While Zomato has a larger number of app downloads and active users, Swiggy tends to have a more frequent user base—known as Monthly Transacting Users (MTUs)—who place orders more regularly.

Discovery and Search Experience

Zomato started as a restaurant discovery platform, where users could read detailed reviews and ratings before choosing a restaurant. This feature remains popular today, making Zomato a go-to app not just for ordering food but also for discovering new places to eat.

Swiggy, recognizing the value of this, acquired Dineout to tap into the restaurant discovery market. However, it has yet to fully capitalize on this acquisition, as it doesn’t offer the same depth of reviews and ratings as Zomato.

Lunch Orders and Post-Pandemic Shift

During the pandemic, Swiggy was hit hard by the drop in lunch orders, as many of its customers who typically ordered lunch from the office were now working from home. Lunch orders make up around 35% of all orders on these platforms.

While Zomato was less affected, it has since introduced “Everyday,” a homestyle meal option priced competitively to attract more lunchtime customers.

Swiggy had earlier tried a similar service called Swiggy Pop but discontinued it during the pandemic.

Membership Plans

Zomato Gold

Zomato Gold is a premium membership program that offers exclusive benefits to subscribers, such as free deliveries, discounts on food orders, and access to special deals from partner restaurants.

• Benefits: Free deliveries on orders above a certain amount, discounts on selected restaurants, and access to free dishes.
• Price: The price of Zomato Gold varies based on location and subscription length, with options for monthly or yearly plans.
• Impact on Users: Zomato Gold is a popular option among frequent users, providing them with significant savings, especially on larger orders.

Swiggy One

Swiggy One is Swiggy’s integrated membership plan, combining its food delivery, Instamart (grocery delivery), and Swiggy Genie services.

• Benefits: Unlimited free deliveries, exclusive discounts on food and groceries, and reduced service fees for Swiggy Genie.
• Price: Swiggy One is priced competitively and offers monthly or yearly subscription options.
• Impact on Users: Swiggy One is designed to attract users who use Swiggy for both food and grocery deliveries, offering them convenience and cost savings across multiple services.

Information About the Apps

Zomato App

User Interface: The Zomato app is known for its simple and user-friendly interface. It offers a range of features including food delivery, restaurant discovery, and detailed reviews with ratings. Users can easily browse through menus, check offers, and track their orders in real time.

Features:

• Discover and Explore: Zomato started as a restaurant discovery platform, and users still use it to find restaurants based on location, reviews, and ratings.
• Zomato Pro/Gold Integration: Offers exclusive deals and discounts for members.
• Zomato Instant: Quick 10-minute delivery service in select areas.
• Intercity Legends: Unique feature that allows users to order iconic dishes from different cities.
• Availability: Zomato is available in over 750+ cities in India and several international markets, making it one of the most widespread food delivery platforms.

Swiggy App

User Interface: The Swiggy app is also easy to navigate, offering features for food delivery, grocery delivery (Instamart), and Swiggy Genie (delivery of goods). The app focuses on speed and efficiency, with a clean and intuitive layout.

Features:

• Swiggy One: Provides access to food, grocery, and delivery services under one membership plan.
• Personalized Recommendations: Uses AI to offer suggestions based on previous orders and preferences.
• Swiggy Genie: Allows users to send packages or run errands via the app.
• Instamart: Swiggy’s quick commerce service for delivering groceries and essentials within minutes.
• Availability: Swiggy operates in 580+ cities across India. While it covers fewer cities than Zomato, it maintains a strong presence in metro areas and Tier 1 cities.

Marketing Strategies and Campaigns of Zomato vs Swiggy

Zomato’s Marketing Strategies

Zomaland: Food Carnival and Live Entertainment Marketing Events

Zomato launched “Zomaland,” a massive food carnival where visitors can enjoy a wide variety of food from top restaurants, live performances, and exciting attractions.

The event has been a hit with food lovers and helps Zomato connect with customers in a fun, engaging way.

This kind of large-scale event strengthens brand awareness and positions Zomato as more than just a food delivery app.

Meme and Creative Marketing

Zomato is famous for its witty and relatable meme marketing on social media platforms like Instagram and Twitter.

These memes are often funny and reflect the everyday experiences of food lovers, helping Zomato connect with its audience in a personal way.

This strategy not only engages consumers but also creates a strong brand recall, making Zomato a part of everyday online conversations.

Paid Advertising

Zomato uses targeted advertising through Google ads to reach specific customer segments.

These ads are tailored to keywords like “food delivery near me” or specific restaurant names, ensuring that Zomato’s platform is visible to people actively searching for food delivery options.

Paid advertising helps Zomato maintain a strong presence in search results and attract new customers.

Swiggy’s Marketing Strategies

UGC Campaigns: “Why is this a Swiggy Ad?” Campaign Success

Swiggy’s “Why is this a Swiggy Ad?” The campaign gained immense popularity by engaging users in a fun guessing game: they had to figure out how a seemingly random image or post was connected to Swiggy.

This user-generated content (UGC) campaign sparked curiosity, leading to high levels of engagement. It also encouraged customers to think creatively and interact with Swiggy, boosting brand visibility.

Email and Social Media Marketing

Swiggy sends dynamic email campaigns, particularly during big events like the IPL and World Cup, offering irresistible deals and promoting special discounts.

Their emails are designed with catchy slogans and visually appealing graphics, keeping customers interested.

On social media, Swiggy uses hashtags like #CravingsSorted and #NoOrderTooSmall to promote its services and engage with users in a fun and relatable way.

PPC Advertising

Swiggy runs Pay-Per-Click (PPC) ads on Google and social media platforms, targeting users based on specific food cravings and meal times. For example, they may run ads for “late-night food delivery” or “midday snacks” to tap into specific customer needs.

These personalized ads help Swiggy increase conversions by offering relevant services at the right time.

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Quick Commerce Battle – Instamart vs Blinkit

Swiggy’s Instamart

Swiggy made a bold move into quick commerce by launching Instamart, which delivers groceries and essentials within minutes. However, building the necessary infrastructure has been costly.

Swiggy has invested heavily in setting up warehouses and logistics, which has been a major reason for its high losses, contributing to its Rs 4,179 crore loss in FY23. While Instamart is growing, it requires significant capital, making profitability a challenge for Swiggy.

Zomato’s Blinkit (formerly Grofers)

Zomato entered the quick commerce space by acquiring Grofers and rebranding it as Blinkit. This approach allowed Zomato to bypass the expensive process of building its own quick commerce platform from scratch.

Instead, Zomato focused on expanding Blinkit’s existing operations, which required less capital investment compared to Swiggy. Despite spending less, Zomato has managed to compete effectively with Swiggy in this space.

Future of Quick Commerce

Both Zomato and Swiggy view quick commerce as a key growth area for the future. However, for now, both companies are prioritizing improving profitability in their core food delivery business.

Quick commerce is still in its early stages, and while it is expected to grow, it remains a costly venture for Swiggy and a strategic investment for Zomato.

Pricing and Deals – Who is Cheaper?

Comparison of Pricing Models

Both Zomato and Swiggy compete aggressively on pricing to attract customers. The price of the same item can differ on the two platforms, as shown by a McVeggie meal comparison.

Zomato didn’t offer any discounts but provided a free McVeggie burger, while Swiggy offered Rs 80 off plus free fries. The platforms use different strategies to offer value, and customers often choose based on the deal they find more appealing at the moment.

Role of Discounts, Free Items, and Offers in User Retention

Both apps regularly offer discounts, cashback, and free items to retain customers. These deals often vary based on location, user activity, and even the time of day.

Swiggy tends to offer more frequent discounts, while Zomato focuses on loyalty programs and perks for its subscribers.

Zomato Gold vs. Swiggy Coupons

Zomato Gold offers free deliveries, exclusive discounts, and free dishes to subscribers, making it an attractive option for frequent users. Swiggy, on the other hand, relies on coupon codes and temporary deals to entice customers.

While Zomato Gold builds long-term loyalty, Swiggy’s coupon-based approach targets short-term savings and frequent transactions.

User Preferences and How Offers Are Shaping Decisions

Customers are not always loyal to one platform and often choose based on which app offers the best deal at a given time.

For many, Zomato’s loyalty program is a big draw, while Swiggy’s frequent coupon codes make it appealing for budget-conscious users. Both companies are constantly refining their offers to attract more orders.

Future Outlook and IPO Plans

Zomato’s Path Forward

Zomato’s strategy for the future involves continuing its push into Tier 2 and Tier 3 cities, which are expected to be the next big growth areas for food delivery. As a publicly listed company, Zomato also benefits from better brand recognition and access to capital, which helps it focus on profitability and expansion.

Zomato is currently ahead in terms of profitability and market share, but its ability to maintain this lead will depend on its ability to innovate and scale in smaller cities.

Swiggy’s IPO

Swiggy is planning a $1 billion IPO, which could reshape the market. The IPO will give Swiggy access to more capital, allowing it to invest in growth and possibly reduce its heavy losses.

However, Swiggy will need to balance its investments in Instamart with improving profitability in its core food delivery business. The IPO will also increase scrutiny of Swiggy’s financial performance, adding pressure to turn a profit.

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Conclusion

Zomato has taken the lead in market share and profitability, thanks to its localized approach and strategic expansion into smaller cities. Swiggy, while having larger revenue, faces bigger losses, especially due to its heavy investment in Instamart.

Both platforms continue to innovate and compete, ensuring better deals and services for customers.

The battle between Zomato and Swiggy is far from over. As both companies shift their focus to profitability, customers will continue to benefit from better prices, faster delivery, and new features. The future of the food delivery market in India is exciting, with both platforms poised for further growth and innovation.

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