Swiggy: Swiggy trailed Zomato in first half of 2022 despite offering bigger discounts: Jefferies report


India’s food-delivery race saw Gurugram-based Zomato gaining market share over its Bengaluru-based rival Swiggy in January-June 2022 even though Swiggy has been offering bigger discounts, according to a research note published by Jefferies on Thursday.

Zomato commanded an average market share of 55% in the food-delivery segment during the period, clocking a gross merchandise value (GMV) of $1.6 billion compared to $1.3 billion for Swiggy.

“This appears to be the highest market share for Zomato in our view, and is despite aggression from Swiggy, which has been offering higher discounts and continuing with its flagship ‘Swiggy One’,” Jefferies noted.

The report comes a day after Prosus, the Dutch-listed arm of South African technology investor Naspers, reported its half-yearly results, saying Swiggy, its food-delivery business in India, recorded strong growth in the first half of the calendar year.


Prosus said Swiggy’s food-delivery business clocked order growth and gross merchandise value (GMV) growth of 38% and 40%, respectively in January-June 2022.

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Jefferies said Swiggy’s losses during the January-June period were “much higher at over $315 million”, compared to approximately $50 million in losses for Zomato on a standalone basis, and nearly $170 million with Blinkit’s losses included.

“Of course, Zomato has since then further improved its performance with a recent quarterly loss of just less than $25 million at consolidated level,” it said.

In the July-September quarter, Zomato nearly halved its losses to Rs 250.8 crore from Rs 434.9 crore in the same period last year. The company also saw its revenue from operations increase 62% year-on-year to Rs 1661.3 crore during the three-month period.

“…in general, Swiggy was offering more discounts in most cases compared to Zomato. This probably partially explains the reason for higher losses than Zomato, in our view,” the brokerage firm added.

On the quick-commerce businesses of both companies, Jefferies pointed out that Swiggy’s Instamart business continued to gain traction and grew 15-fold year-on-year, clocking GMV of $257 million. This compares to $270 million in GMV recorded by Zomato-owned Blinkit.

Going ahead, Jefferies said it sees a strong case for Swiggy dropping its “aggressive stance in food delivery to reduce its losses”. It added, “In case that does not happen, Zomato may be induced to increase its aggression to drive growth.”

“With aggression continuing from Swiggy on discounting and its flagship programme, Swiggy One, Zomato may come up with Pro membership in some form,” the report noted.

Zomato recently discontinued its Pro and Pro Plus subscription schemes, and is working on a new “loyalty programme” for food delivery, the company’s chief financial officer Akshant Goyal said earlier this month.

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