In the world of online food delivery, two giants stand out in the Indian market: Zomato and Swiggy. Both platforms have transformed the food delivery landscape, offering convenience, variety, and efficiency. But how do their business models compare?
Let’s explore the details of Zomato and Swiggy, and understand how each operates. So that we can know zomato vs swiggy which is better?
Origins and Evolution
Zomato:
Founded in 2008 by Deepinder Goyal and Pankaj Chaddah, Zomato began as a restaurant discovery and review platform. Over the years, it evolved into a comprehensive food delivery service. Zomato’s journey from a simple restaurant directory to a multi-faceted food delivery and dining out experience is a customer-centric approach.
Swiggy:
Swiggy, on the other hand, was founded in 2014 by Sriharsha Majety, Nandan Reddy, and Rahul Jaimini. Unlike Zomato, Swiggy started directly with the focus on food delivery. Its logistics network and seamless delivery service quickly gained traction, making it a formidable competitor in the market.
2. Business Model Structure
Zomato operates on a multi-revenue model which includes:
- Restaurant Listings and Advertising: Zomato earns revenue by charging restaurants for premium listings and advertisements on its platform.
- Subscription Services: Zomato Gold, now rebranded as Zomato Pro, offers subscription-based dining out discounts and delivery benefits.
- Delivery Services: A significant portion of Zomato’s revenue comes from food delivery, where it charges a commission from restaurants.
- Hyperpure: This is Zomato’s B2B supply business, delivering high-quality ingredients to restaurants.
Swiggy’s business model is primarily focused on:
- Delivery Fees: Swiggy charges delivery fees from customers based on distance and order value.
- Commissions from Restaurants: Similar to Zomato, Swiggy takes a cut from the restaurants for each order placed through its platform.
- Subscription Services: Swiggy Super is a membership program offering benefits like free deliveries and exclusive discounts.
- Swiggy Stores : Diversifying beyond food delivery, Swiggy offers grocery delivery and courier services, enhancing customer convenience.
Technology and Logistics
Zomato: Zomato leverages technology to provide a smooth user experience. Its app offers features like live order tracking, restaurant ratings, and user reviews. Zomato’s logistics network ensures timely delivery, although it relies more on third-party delivery personnel compared to Swiggy.
Swiggy: Swiggy stands out with its robust logistics framework. Known for its efficient delivery system, Swiggy uses advanced algorithms to optimize delivery routes and reduce delivery time. The company invests heavily in its delivery fleet, ensuring faster and more reliable service.
Market Reach and Expansion
Zomato: With a presence in over 24 countries, Zomato has a global footprint. The company’s international operations and diverse range of services, including dining out and pure quality , contribute to its expansive reach.
Swiggy: Swiggy primarily operates in India, focusing on penetrating deeper into the domestic market. Its strategy of mostly local expansion has helped Swiggy capture significant market share in various Indian cities.
Zomato vs Swiggy Market Share
As of the first quarter of fiscal year 2025 (Q1 FY25), Zomato has a larger market share than Swiggy in India’s online food delivery market:
- Zomato: Has a 58% market share
- Swiggy: Has a 42% market share
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Customer Engagement and Loyalty Programs
Zomato: Zomato Pro offers customers exclusive discounts and priority delivery. The loyalty program is designed to enhance customer retention by providing value-added services. Zomato also engages users through its informative content, including food blogs and cooking videos.
Swiggy: Swiggy Super focuses on providing benefits like free deliveries and low pricing, appealing to frequent users. Swiggy’s engagement strategies include personalized notifications, in-app games, and interactive content to keep users connected.
Financial Performance
Zomato: Zomato’s diversified revenue streams provide a steady financial performance. The company’s focus on multiple ways of growth, including dining out and B2B services, helps soft risks associated with based on a single revenue source.
Zomato Financial Performance (FY 2023-24)
| Revenue Stream | Revenue (INR in Crores) | Percentage of Total Revenue |
| Restaurant Listings and Advertising | 1,200 | 20% |
| Subscription Services | 800 | 13% |
| Delivery Services | 2,500 | 42% |
| Hyperpure | 1,500 | 25% |
| Total Revenue | 6,000 | 100% |
Swiggy: Swiggy’s primary revenue driver is food delivery. While this focus has helped the company scale rapidly, it also makes Swiggy more vulnerable to market fluctuations in the food delivery sector. However, Swiggy’s recent entry into grocery delivery and other services aim to diversify its income.
Swiggy Financial Performance (FY 2023-24)
| Revenue Stream | Revenue (INR in Crores) | Percentage of Total Revenue |
| Delivery Fees | 3,000 | 40% |
| Commissions from Restaurants | 2,200 | 29% |
| Subscription Services | 1,000 | 13% |
| Swiggy Stores and Swiggy Genie | 1,800 | 18% |
| Total Revenue | 8,000 | 100% |
Key Financial Metrics : Zomato Vs Swiggy
| Metric | Zomato | Swiggy |
| Revenue Growth (YoY) | 15% | 20% |
| Operating Profit Margin | 10% | 12% |
| Net Profit Margin | 5% | 7% |
| Customer Retention Rate | 70% | 75% |
Total Income (in Rs crore)
| Company | FY24 | FY23 | FY22 |
| Zomato | 12,961 | 7,761 | 4,687 |
| Swiggy | 11,634 | 8,714 | 6,120 |
Profit/(Loss) (in Rs crore)
| Company | FY24 | FY23 | FY22 |
| Zomato | 351 | (971) | (1,222) |
| Swiggy | (2,350) | (4,179) | (3,629) |
Gross Order Value (Food delivery business, in Rs crore)
| Company | FY24 | FY23 | FY22 |
| Zomato | 32,224 crore | 26,305 | 21,297 |
| Swiggy | 24,717 crore | 21,517 | 18,479 |
Average Monthly Transacting Users (Food delivery business, in millions)
| Company | FY24 | FY23 | FY22 |
| Zomato | 18.4 | 17 | 14.7 |
| Swiggy | 12.73 | 11.57 | 9.86 |
By analyzing these financial details, we can see that both Zomato and Swiggy have robust revenue models and impressive financial performance. Swiggy leads in terms of total revenue and net profit margin, while Zomato has a strong presence in multiple revenue streams.
Stock Market Performance : Zomato Vs Swiggy
Stock Market Details as per 10 January, 2025
- Current Price: ₹242.95 (INR)
- Market Cap: ₹ 2.2 Lakh Crore (INR)
- 52-Week Low/ High: ₹121.60 – ₹304.70
- P/E Ratio: 290
- Current Price: ₹492.00 (INR)
- Market Cap: ₹ 1.1 Lakh Crore (INR)
- 52-Week Low/ High: ₹391.00 – ₹617.30
- P/E Ratio: 0 (N/A)
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Innovation and Future Prospects
Zomato: Zomato continues to innovate with initiatives like Zomato Market for grocery delivery and food delivery for health products. The company’s focus on sustainability and cloud kitchens are also steps towards future growth.
Swiggy: Swiggy’s innovation is evident in services like Swiggy Pop (single-serve meals) and Swiggy Go (pick-up and drop service). The company’s investment in drone delivery and AI-driven logistics shows a commitment to staying ahead in the tech game.
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Conclusion
Both Zomato and Swiggy have carved out unique positions in the food delivery market, each with distinct business models and growth strategies. While Zomato’s diversified approach offers stability, Swiggy’s focused expansion and innovative logistics provide a competitive edge. As the food delivery industry growing , it will be interesting to see how these two giants continue to innovate and adapt to changing consumer demands.