Explore the ultimate showdown between Swiggy and Zomato, two leading food delivery platforms
The competition between Swiggy and Zomato, two of India’s largest food delivery platforms, has intensified, with both companies releasing their Q2 FY25 results. The comparison sheds light on their growth strategies, profitability, and market performance. Here’s an in-depth analysis of their Q2 financials.
Revenue Comparison
Swiggy reported a revenue of ₹3,601.4 crore in Q2 FY25, reflecting a 30.3% year-on-year (YoY) growth from ₹2,763.3 crore in Q2 FY24. Zomato outperformed in total revenue, reporting ₹4,799 crore, showcasing its position as the market leader in terms of revenue generation.
Swiggy’s Key Growth Drivers:
Swiggy’s revenue surge was driven by strong performance in its food delivery and quick-commerce segments. Instamart’s expansion into more geographies and categories contributed significantly, with a 135.5% YoY growth in revenue to ₹490 crore.
Zomato’s Key Revenue Contributors:
Zomato’s diversified revenue streams, including its B2B supply chain and Hyperpure segments, complemented its food delivery business, leading to the highest quarterly revenue to date.
Profitability Analysis
Swiggy narrowed its net loss to ₹625.5 crore in Q2 FY25, a slight improvement from ₹657 crore in Q2 FY24. Its adjusted EBITDA margin for food delivery reached 1.6%, reflecting steady progress in profitability.
Zomato reported a net profit of ₹176 crore, a significant improvement compared to ₹36 crore in Q2 FY24. Its cost control measures and higher operating efficiency led to positive operating income of ₹46 crore, contrasting with losses in previous quarters.
Operating Metrics
Gross Order Value (GOV)
Swiggy’s GOV for food delivery grew 5.6% quarter-on-quarter (QoQ) to ₹7,191 crore, reflecting increasing user spends and transaction volumes.
Zomato, while not disclosing specific GOV figures, showcased a broader revenue base and higher transaction volumes.
Quick-Commerce Growth
Swiggy’s Instamart experienced remarkable growth, with GOV increasing 24.1% QoQ to ₹3,382 crore. The rapid expansion of its dark store network and optimized inventory management reduced delivery times and boosted customer satisfaction.
Customer Base and Engagement
Swiggy served over 118 million users in its decade-long operations, partnering with 234,000 restaurants across 685 cities. Its focus on Tier-2 cities contributed to growth in these regions.
Zomato continued leveraging its vast customer base and focused on urban areas, delivering high-value transactions and user retention.
Segment Analysis
Food Delivery
Swiggy’s food delivery business remains its strongest segment, achieving profitability on an adjusted EBITDA basis. Improved efficiency in operations, increased restaurant advertising, and innovative initiatives like 10-minute delivery (Bolt) drove its growth.
Zomato’s food delivery segment benefited from its loyalty programs and aggressive marketing, driving higher order frequencies and revenue per order. The introduction of new services further enhanced user engagement.
Quick-Commerce
Swiggy Instamart led the quick-commerce space with significant investments in store expansion and category diversification. Its contribution margin improved from -3.2% in Q1 FY25 to -1.9% in Q2 FY25, nearing profitability.
Zomato’s Blinkit also saw notable growth, though its financials in the quick-commerce segment remain less transparent.
Competitive Landscape
Profitability Trajectory
Swiggy has set ambitious profitability targets:
Contribution margin break-even by Q3 FY26.
Adjusted EBITDA break-even by Q2 FY27.
Zomato achieved profitability earlier, benefiting from its established user base and diversified business model.
Investment in Technology
Both companies are leveraging technology to enhance operational efficiency and customer experience. Swiggy’s investment in AI-driven logistics and Zomato’s use of data analytics for demand prediction reflect their focus on innovation.
Key Strategic Highlights
Swiggy
Expanded Instamart’s footprint to 44 cities, adding 52 dark stores in Q2 FY25.
Introduced innovative offerings like PocketHero and Ecosaver, driving affordability and sustainability.
Launched 10-minute food delivery under the Bolt program, setting a new standard in delivery times.
Zomato
Focused on increasing market penetration through loyalty programs and exclusive restaurant partnerships.
Enhanced its Hyperpure segment, catering to restaurant supply chain needs.
Strengthened its presence in urban markets, maintaining a high-value transaction focus.
Challenges and Opportunities
Challenges
Swiggy: Faces intense competition in the quick-commerce space, requiring significant investments to sustain growth and profitability.
Zomato: Needs to maintain momentum in profitability amidst rising operating expenses and competitive pressure.
Opportunities
Both companies can capitalize on India’s growing digital adoption and rising disposable incomes.
Expansion into Tier-2 and Tier-3 cities presents significant growth potential for both platforms.
Verdict: Who Wins Q2 FY25?
Zomato edges ahead in Q2 FY25 with a net profit of ₹176 crore, demonstrating superior financial discipline and operational efficiency. Its diversified revenue streams and early profitability offer a competitive advantage.
Swiggy, while still in the red, has shown consistent improvement, particularly in its quick-commerce segment. Its robust growth strategy and focus on innovation position it as a strong competitor in the long run.
Future Outlook
The Swiggy vs. Zomato rivalry is far from over. With both companies investing heavily in technology, innovation, and customer acquisition, the competition is expected to drive further advancements in the food delivery and quick-commerce industries. Their ability to adapt to market demands and deliver exceptional customer experiences will determine the ultimate winner in this financial battle.
