📈 Zomato’s Market Share Expands
Zomato now commands 57% of India’s food delivery market, up 200 basis points from earlier, according to Goldman Sachs. In FY24, Zomato reported a 22% YoY growth in gross order value (GOV), outpacing Swiggy’s 14%. Analysts expect Zomato’s growth to continue, driven by its profitability and strong market presence. Earlier, Zomato held 54% of the market. The company also boasts a 31% CAGR projection for FY24-27, the fastest among global peers.
📊 Swiggy’s Slower Growth
Swiggy’s GOV grew 26% YoY in 2023 but lagged Zomato’s 34% growth. Goldman Sachs estimates Swiggy’s food delivery GOV growth at 17% in the first half of 2023, slowing to 14% in the second half. Despite narrowing its EBITDA loss, Swiggy trails Zomato in both growth and profitability. Analysts believe Swiggy's IPO success depends on arresting market share declines and demonstrating a clear path to profitability.
💡 Zomato’s Strategic Edge
Brokerages, including JM Financial and Kotak, highlight Zomato’s superior performance across food delivery and B2C businesses. Zomato turned profitable in 2023, leveraging its strong margin profile. It achieved 42% YoY growth in H2 2023, surpassing Swiggy’s 22%. Zomato’s scale is also 50% larger than its closest competitor in quick commerce, indicating potential for further dominance.
📈 Rising Investor Confidence
Indian brokerages have become more bullish on Zomato. Shares rose 3% on Tuesday, closing at INR 202.85. Analysts from Goldman Sachs, Emkay, and CLSA maintain ‘buy’ ratings for Zomato, citing its robust growth, profitability, and market leadership. Swiggy’s pre-DRHP filing has added pressure, as investors demand a clear break-even strategy before its IPO. Meanwhile, Zomato's consistent gains make it a favorite for long-term growth in India's food delivery market.
Who will dominate India's food delivery next year?
