Zomato holds a 57% market share in food delivery, surpassing Swiggy. Goldman Sachs reports Zomato's growth outpaced Swiggy's with a 22% YoY GOV increase. Zomato's profitability strengthens its position in the market.
Goldman Sachs revealed on June 25 that Zomato now commands a 56-57% market share in the food delivery sector. This marks a 200 basis point increase from previous periods. Swiggy, in comparison, saw a 14% year-on-year (YoY) growth in Gross Order Value (GOV) for the second half of 2023, lagging behind Zomato’s 22% YoY GOV growth in FY23-24. Zomato’s share in the Indian food delivery market had previously been around 54%.
Swiggy’s core food delivery business reported a 26% YoY increase in GOV in 2023, as per Prosus’ 2024 annual report. Despite this growth, Zomato’s scale is about 50% larger than its nearest competitor. JM Financial noted that Zomato outperformed Swiggy in growth and profitability in 2023. “Zomato’s market share expansion is driven by its superior growth and profitability,” stated Goldman Sachs.
In 2023, Swiggy's GOV growth was 17% YoY for the first half and 14% for the second half. Zomato, however, reported an 18% GOV growth between H1 and H2 of 2023. Zomato’s FY24-27 CAGR is projected at 31%, making it the fastest-growing food delivery company within Goldman Sachs' global coverage. Additionally, Zomato turned profitable in 2023, while Swiggy's adjusted EBITDA loss remains higher.
Goldman Sachs and other brokerages, including Kotak Institutional Equities, Emkay, and CLSA, are bullish on Zomato. They emphasize Zomato’s faster growth and higher margins compared to Swiggy. Zomato’s shares rose 3% on the BSE, ending 2% higher at INR 202.85. “Zomato’s lead in profitability and market share provides an opportunity for further gains,” said JM Financial. Swiggy’s upcoming IPO hinges on demonstrating a clear path to EBITDA break-even and stabilizing market share.
Do you think Zomato's lead over Swiggy will continue?
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