Akshata Sharma
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While Swiggy's food delivery services have become profitable, the quick commerce segment, Instamart, has incurred significant losses despite revenue growth. As Swiggy gears up for its $1.25 Bn IPO - let's take a closer look at its competition
* Despite Swiggy surpassing Zomato in revenue till FY23 - Zomato has always led the way, from building the food delivery industry to going public.
* Swiggy has no choice but to directly compare Zomato's bottom line and scale while justifying its pricing. And, it falls short on multiple accounts compared to Zomato which has recorded a 67% rise in revenue for FY24.
* Swiggy lags in monthly active users (MAU) and gross order value (GOV). Zomato claims over 30 Mn MAUs, while Swiggy has around 24 Mn. Zomato's GOV is $3.1 Bn, compared to Swiggy's $2.6 Bn.
* As per Abhishek Ginodia, cofounder of pre-IPO platform Altius Investech - quick commerce is Swiggy's key differentiator.
"Swiggy and Zomato have similar revenue rates, but Zomato has performed better. Zomato improved its performance by reducing losses from Blinkit, while Swiggy's quick commerce business negatively impacts its contribution margin by 50%. This could result in Swiggy's IPO being valued lower than Zomato's," said Ginodia.
* As per sources, who have seen Swiggy's disclosures as of September 2023 (H1FY24), the company has touched INR 4,735 Cr in revenue from food delivery and quick commerce.
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