Hunger Games: Swiggy’s swag in volumes matches rival Zomato’s zing in reach

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New Delhi | Published: June 23, 2019 4:15:44 AM

Food delivery platform Swiggy may have edged past its competitors to become the most used app, but rival Zomato continues to have more reach.

Backed by deep pockets, Swiggy and Zomato have been scaling up their businesses.

Food delivery platform Swiggy may have edged past its competitors to become the most used app, but rival Zomato continues to have more reach. Data sourced from kalagato.co shows Swiggy’s market share by transaction volume for the three months ended November 2018 stood at 40.19% while Zomato lagged with 24.48% share.

However, Zomato’s national market share in terms of app installations was at 33.7% for the three months ended December 2018, higher than Swiggy’s 28.3% for the same period. Zomato’s market share in Tier I cities stood at 32.2% compared to Swiggy’s 29.1%. In Tier II and Tier III cities, Zomato held 38.5% and 34.73% market share, respectively, in terms of app installations while Swiggy trailed with 25.9% and 28.96%, respectively.

The data showed Ola-owned Foodpanda had a market share of 30.38% by transaction volume in the three months ended November 2018. However, it fared poorly in terms of app installations, registering only 11.93% share in the three months ended December 2018. Uber Eats’ national reach stood at about 15% during the period.

The reason Swiggy is ahead in volumes is that the company always focused on solving the last-mile problem for restaurants, whereas Zomato started out as a discovery and review platform before pivoting towards food delivery. First-mover advantage in metros gives Swiggy an edge over the competition, says an analyst with a top consultancy on condition of anonymity. Further, multiple funding rounds in the recent past have enabled Swiggy to deepen its reach among customers by offering better service, creating brand and offering different products like subscription.

In Zomato’s case, the firm, after realising it had lost the first-mover advantage in metros, made a plunge for Tier II and Tier III cities while continuing to expand tie-ups under its flagship programme Gold to drive memberships in metros.

Zomato’s reach is coming from app installations (including in cities where there is no delivery but only discovery), the analyst pointed out. “Swiggy’s focus on the last mile all along has made it the first choice for transacting users where delivery is present,” the analyst added.

Zomato’s Gold is a paid membership service that allows subscribers to get complimentary meals and drinks when eating at partner restaurants. “Those who believe that Zomato has lost the battle to Swiggy should do well to remember that Zomato operates in multiple countries and has built a different niche for itself by focusing on Gold which has found phenomenal success with diners,” said Aman Kumar, chief business officer at kalagato.co.

Backed by deep pockets, Swiggy and Zomato have been scaling up their businesses. Swiggy walked away with a staggering $1-billion funding in December led by Naspers that valued the firm at an estimated $3.3 billion. Earlier this year, Zomato raised a total $105 million from investors led by Delivery Hero SE and Glade Brook Private Investors.

From a 15 million run rate order in March 2018, food delivery firms’ orders are up at around 65 million, according to a Kotak Institutional Equities report in January 2019. This growth has primarily been driven by Swiggy and Zomato, the report says.

According to the data from kalagato.co, average order value (AOV) of Swiggy ranged from Rs 245-Rs 286 during September-November 2018 while the AOV for Zomato was Rs 219-Rs 233.

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