The competition between India’s top food delivery platforms, Swiggy and Zomato, continues to heat up. According to a recent analysis by Morgan Stanley, Zomato has taken the lead over Swiggy in terms of market share and profitability. However, Swiggy still shows promise in certain areas, making the competition tighter than ever.
Zomato’s Edge in Market Share
Zomato, known for its aggressive expansion strategies, has grown its market share significantly. As per the latest figures, Zomato’s market share increased from 54% in FY22 to 58% in the first quarter of FY25. Swiggy, while expanding its operations to 681 cities, has been unable to close this gap. In terms of gross order value (GOV) per monthly active user, Swiggy has an advantage, but this alone hasn’t been enough to overtake Zomato’s dominance in the broader market.
Profitability: Zomato Ahead of Swiggy
The biggest difference between the two platforms comes in their profit margins. Zomato posted an adjusted EBITDA margin of 3.4% in the first quarter of FY25, a significant advantage over Swiggy’s 0.8%. This gap in profitability has been a focal point in Morgan Stanley’s analysis.
Swiggy’s presence in the quick commerce sector (fast deliveries of groceries and essentials) shows potential, especially with its reach in 32 cities. However, Zomato’s quick commerce arm, Blinkit, is more profitable with a positive contribution margin. In contrast, Swiggy’s quick commerce margins are still lagging, which could affect its long-term profitability.
Similar Average Order Value but Lower User Base for Swiggy
While both companies have a similar Average Order Value (AOV), Swiggy’s monthly transacting users (MTU) are lower by 31% compared to Zomato. As of FY24, Swiggy had 12.7 million MTUs compared to Zomato’s 18.4 million. However, Swiggy still manages to maintain a better GOV per MTU, although the gap between the two is shrinking.
Quick Commerce: The Next Battleground
One of the most critical growth areas for both platforms is the quick commerce segment. Swiggy’s average order value in this segment is notably lower than that of Zomato’s Blinkit, which explains the difference in profitability. Despite its growing presence in this sector, Swiggy has yet to catch up with Zomato’s more efficient operations in quick commerce.
Dine-Out Segment: Zomato Stays Ahead
In the dine-out segment, Zomato also maintains an advantage, posting a positive GOV of 0.8% compared to Swiggy’s negative 2%. This segment is crucial as it reflects the platforms’ ability to diversify beyond food delivery and quick commerce.
Future Outlook: A Competitive Landscape
While Zomato is currently ahead in both profitability and market share, the competition remains fierce. If Swiggy successfully leverages fresh capital to expand in quick commerce and improve its margins in food delivery, the landscape could shift. However, if Zomato continues to focus on efficiency and maintaining its lead, it may keep its dominant position in the Indian market for the foreseeable future.
