India’s two leading online food delivery platforms Zomato and Swiggy are locked in a fierce battle to emerge at the top in the food delivery ecosystem. Over the past couple of months, both the food delivery aggregator have amped up their cash burn with various new ventures and boosting their operations.
Zomato is spending over ₹125 crores ($20 million) every month, while Swiggy is spending around ₹110-125 crores ($16-18 million) as of June. As per sources, both Zomato and Swiggy have increased their cash burn from around $3 million and $4 million for the month of March for both the aggregators respectively.
“A large part of Zomato’s spends are happening across Hyderabad and Bengaluru where the firm is looking to capture significant market share since Swiggy has a strong footing there. Swiggy is doing the same in New Delhi and Gurgaon because that market is dominated by Zomato. Swiggy is spending a lot to fight the exclusivity battle in the NCR region where Zomato has made a significant dent as far as exclusive partnerships with restaurants is concerned,” said one of the sources.
A part of the recent cash burn is attributed to the increase in the salary of delivery executives and all the delivery aggregators are involved in hiring more delivery executives to strengthen their operations.
Scaling up of operations is important for Swiggy as it looks to venture into hyperlocal delivery, while Zomato is also crossing new milestones as it receives a record 1.3 crore orders during FIFA World Cup 2018.
Comparing the order volumes, Swiggy caters to about 14 million orders in a month, while Zomato is slightly behind with around 11 million orders in a month. Other food delivery aggregators UberEATS, and Foodpanda fulfil around 1.8 million and 1.2 million monthly orders, respectively, as per industry estimates.
As Zomato looks to cut its operational cash burn by reducing its digital marketing spendings, while Swiggy has launched its subscription-based service Swiggy Super, that lets users order their food without any delivery charges for a fixed subscription cost.
Although, it is yet to be seen how successful both the players are to gain a stronghold in each others territory. Zomato and Swiggy are looking to control their cash burn as they battle for the top spot. Other food delivery aggregators like UberEATS and Foodpanda have a long way ahead of them to give competition to the other two.