Zomato continues to dominate the food delivery segment with a 58% market share in the June quarter of FY2024-25, according to a report by Motilal Oswal.
Swiggy captures 42% of food delivery market
Its rival Swiggy, which recently made its stock market debut, trails behind with a 42% share.
The food tech giant’s stronger execution has enabled it to gain market share from Swiggy between FY22 and Q1 FY25, increasing its share from 54% to 58% in terms of gross order value (GOV). Analysts at Motilal Oswal attribute this growth to Zomato’s effective strategies.
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In the quick commerce segment, Blinkit leads with a 46% market share in Q1 FY25, followed by Zepto at 29% and Swiggy Instamart at 25%. However, Motilal Oswal notes that Swiggy can regain lost ground in both segments with tighter execution and better utilisation of its unified app approach.
Zomato expects 30% growth rate in 5 years
However, Zomato expects its food delivery business to grow at an annual rate of 30% over the next five years. Despite intensified competition and surging sales in quick commerce, food delivery remains a lucrative business for Zomato and Swiggy.
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In Q1 FY25, Zomato’s food delivery business reported a GOV of INR 9,264 crore, up 27% year-over-year (YoY). In comparison, Swiggy’s food delivery business reported a GOV of INR 6,808.3 crore, up from INR 5,958.7 crore in the same quarter last year.
Brokerage firm Morgan Stanley has reaffirmed its ‘overweight’ rating on Zomato and increased its price target to INR 355 from INR 278, implying an upside potential of over 31%. Zomato’s shares traded 0.24% higher at INR 271.35 apiece on the BSE.
