According to a recent report from Kotak Institutional Equities, Zomato, the online food delivery platform, retained its dominant position in the food delivery market by capturing 55 percent of the market share in the calendar year ending on December 31, 2022 (CY22). In comparison, its competitor Swiggy accounted for 45 percent of the market share. This data indicates Zomato’s continued success and its ability to maintain its lead over Swiggy. The report was released on Thursday.
Zomato witnessed a significant growth in its gross merchandise value (GMV) for its food delivery business, reaching $3.2 billion. This represents a YoY increase of 26 percent, highlighting the company’s continued expansion and success in the food delivery sector.
Zomato’s food delivery business has witnessed substantial growth in its gross merchandise value (GMV), reaching an impressive $3.2 billion. This represents a noteworthy year-on-year increase of 26 percent, showcasing the company’s continued expansion and success within the food delivery sector.
Additionally, Zomato experienced a remarkable 30 percent year-on-year growth in food delivery orders, surpassing its 26 percent GMV growth. This indicates that there was no decline in either the average order value (AOV) or take rates, which refers to the commission charged by the platform (such as Swiggy or Zomato) for facilitating transactions.
“This suggests a GMV share of 55:45 in favour of Zomato, reflecting strong execution and customer stickiness, despite discounts coming off on the platform. Further, Zomato seems to have maintained its market share lead in CY2022, which is an added positive,” analysts at Kotak said.
During the release of its annual report this week, Prosus, the largest investor in Swiggy holding approximately 33 percent stake in the company, revealed that Swiggy’s losses surged by 80 percent year-on-year from January 1 to December 31, 2022. However, during the same period, the gross merchandise value (GMV) for Swiggy’s food delivery business witnessed a growth of 26 percent.
Read More: Foodtech giant Swiggy witnesses significant jump in losses, reaching $545 Million in 2022
“Our share of Swiggy’s trading loss increased to $180m (FY22: $100m), driven by investment in Instamart, which peaked during the year,” Prosus had said.
This translates to an overall loss of approximately $545 million for the food aggregator during the year.
“We believe both Zomato and Swiggy are currently annualising GMV of over $1 bn. Swiggy posted YoY growth of 459 per cent in quick commerce GMV, and we believe future growth in it would be more calibrated, given a higher profitability focus. Zomato’s losses appear lower over the same period. However, we note that the Blinkit acquisition was completed only in August 2022, and hence the comparison is not like-for-like,” said Kotak analysts.
According to Kotak analysts, the recent announcement by Swiggy CEO Sriharsha Majety regarding the achievement of Ebitda profitability in the food delivery business is seen as a positive development. The analysts also noted that the competitive intensity in the sector has become more rational compared to the past.
