Introduction

In the bustling battlefield of food delivery supremacy, the clash between Zomato and Swiggy has been nothing short of legendary. Both giants have locked horns not only in the core food-delivery business but also in the emerging quick-commerce sector through Swiggy Instamart and Zomato-owned Blinkit. In the midst of this intense competition, Swiggy has emerged as a beacon of remarkable performance in the first half of the financial year 2023-24 (H1 FY24).

A Closer Look at the Numbers

Prosus, a major stakeholder in Swiggy, announced a 28% growth in Swiggy’s overall gross merchandise value (GMV). The core food business grew by 17%, reaching a GMV of $1.43 billion, while Instamart, Swiggy’s quick-commerce venture, saw a 63% GMV growth. In comparison, Zomato reported a gross order value (GOV) of $1.84 billion for its food-delivery business in the first two quarters of FY24. In recent turn of events, US-based investment company Invesco increased Swiggy’s valuation to a staggering $7.85 billion, adding another layer of intrigue to the unfolding narrative.

Key Drivers of Swiggy’s Success

• Rise in Transacting Users: Swiggy experienced a surge in transacting users, propelling double-digit order growth. This increase in user engagement played a pivotal role in the platform’s overall performance.
• Inflation in Average Order Value: The inflation in average order value further contributed to Swiggy’s growth. The convenience offered by the platform entices customers to spend more.

Financial Metrics:

• Strong GMV Growth: Swiggy’s overall GMV growth stands at a stellar 28%, with the core food business growing by 17%, with Instamart witnessing 63% growth. Instamart’s store count ending 19% higher in June contributed significantly to this growth.
• Reduced Trading Loss: Trading loss decreased to $208 mn in H1 FY24, a significant improvement from $321 mn in the same period from the previous year, reflecting enhanced operating efficiency.

3.Core Food-Delivery EBITDA Losses: Swiggy witnessed an 89% reduction in core food-delivery EBITDA losses in 1H24 owing to improvements in contribution margin and operating leverage. Overall, the loss narrowed by 35% YoY to $208 million.

Instamart’s Success Story

Swiggy’s quick-commerce gem, Instamart, achieved significant progress in 25 Indian cities. Factors such as increased basket sizes, expanded store network, and faster delivery times contributed to Instamart’s success. Moreover, Instamart’s losses in H1 FY24 decreased by 75%, showcasing the positive impact of scaling and improved profitability. Broader product selection and densely populated store network played a pivotal role in enhancing customer acquisition and retention.

Future Outlook

Swiggy’s outstanding performance in H1 FY24 showcases its resilience and adaptability in a fiercely competitive market. With a strategic focus on profitability, reduced losses, and the resounding success of Instamart, Swiggy seems poised for continued triumph in the evolving landscape of food delivery platforms. With a steadfast dedication to customer satisfaction and operational efficiency, the company is poised to revolutionize the food delivery industry, offering an exciting glimpse into Swiggy’s future

Read Further:

• Economic Times
• Zee Business
• Yourstory
• Business Standard
• BW Disrupt

Written by: Gajjar Vandan D