Zomato vs Swiggy

Published: 18-Feb-2020

Zomato and Swiggy have been fighting for a share of our stomachs for a few years now. While there have been others like FoodPanda, UberEats and TinyOwl, we can comfortably say Zomato and Swiggy are the last remaining giants in this battle.

But while they both are fighting the food delivery battle, are they fighting the same war?

As consumers, we tend to slot them into the same bucket. However, the reality is that while Zomato and Swiggy compete in food delivery, the rivalry stops there. When you look at the larger picture, they are companies with very different DNA chasing different end goals.

Zomato - Everything Food

Zomato wants to be the brand that represents food in your mind. Through restaurant listings, ratings, and original video content, it wants to be the go-to place when you think about food (mind-share). Through food delivery, Gold membership and Zomaland events, it is trying to capture a share of your food expenses (wallet-share).

Zomato is also trying to capture restaurants' wallet share by offering services that restaurants generally need in the course of business - SneakPeak (branding & advertising expense), HyperPure (ingredients expense), Cloud Kitchens (rental expense), and Hygiene Audits (quality control expense).

Swiggy - Anything Delivery

Swiggy wants to be your concierge who will deliver anything you want, right to your doorstep. It started with food (original app) and expanded into other verticals like groceries and medicines through Swiggy Stores. With Swiggy Go (pick-up & drop), it can practically deliver anything (legal :P) to you.

Being a customer-obsessed company, Swiggy has launched multiple features/initiatives under each vertical to improve the customer experience or fill a gap.

Under the food vertical, it offers Super (a delivery subscription), Pop (single person meals) and Daily (tiffin meals subscription) to consumers. It also runs private-label, delivery-only brands like 'The Bowl Company' and 'Homely' to fill gaps it has identified in the food assortment.

Under the same vertical, it also provides cloud kitchens (Swiggy Access) in high-demand areas to restaurants and recently launched BrandWorks to help restaurants with un-utilized kitchen space to create delivery-only brands based on Swiggy's data insights around unmet customer needs.

Under the groceries vertical, it added daily delivery subscription with the acquisition of SuprDaily.

Too Many Cooks

Given the difference in strategies, the potential competitors for each player change.

Zomato's 'everything food' approach makes it a unique company. While Swiggy is a strong competition, it is only in the delivery vertical. Zomato faces either weak or no competition in all its other verticals. The corporate vertical is an exception with Hungerbox ahead of food@work but I'd argue that B2B is not Zomato's priority right now (food@work is mentioned as a side note in their H1 2020 report).

Meanwhile, Swiggy's fight for our doorstep puts it in a very heated space. It is directly in competition with Dunzo across all verticals, with Zomato in the food vertical, with 1mg, Pharmeasy (and a dozen other e-pharmacies) in the medicines vertical, and with Amazon, BigBasket & Milkbasket in the groceries vertical. With Amazon's planned entry into food delivery, Swiggy's competition is only set to increase.

Who Takes The Cake?

It is clear that among the two, Swiggy has a tougher battle ahead, facing strong competition in every vertical. Also, Swiggy's primary revenue stream is delivery, which by nature is a low margin business. Zomato, on the other hand, has margin generating verticals like Gold and HyperPure. I bet on Zomato to reach profitability earlier.

Food For Thought

With each company chasing different end goals, why are they bleeding themselves out in food delivery? Especially since it is already well-known that food delivery will always be a low-to-no margin business.

I have a hypothesis for this but that's a different post for another day :)