Zomato commanded an average market share of 55% in the food-delivery segment during the period, clocking a gross merchandise value (GMV) of $1.6 billion, compared to a GMV of $1.3 billion for Swiggy.
“This appears to be highest market share for Zomato in our view, and is despite aggression from Swiggy, which has been offering higher discounts and continuing with its flagship ‘Swiggy One’,” Jefferies said.
The report comes a day after Prosus, the Dutch-listed arm of South African technology investor Naspers,
reported half-yearly results that showed strong growth in its food-delivery business in India through Swiggy. Prosus owns a 33% stake in Swiggy.
Prosus said Swiggy’s core food-delivery business clocked order growth and GMV growth of 38% and 40%, respectively, for the first six months of calendar year 2022.
Jefferies said Swiggy’s losses during the January-June period were “much higher at over $315 million”, compared to approximately $50 million in losses for Zomato on a standalone basis, and nearly $170 million, inclusive of losses at quick commerce unit Blinkit.
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“Of course, Zomato has since then further improved its performance with recent quarter loss at just less than $25 million at a consolidated level,” it said.
For the July-September quarter,
Zomato nearly halved its losses to Rs 250.8 crore, compared to Rs 434.9 crore in the same period last year.
The restaurant discovery platform also saw revenue from operations expand by 62% year-on-year to Rs 1,661.3 crore during the three-month period.
“…in general, Swiggy was offering more discounts in most cases compared to Zomato. This probably partially explains the reason for higher losses than Zomato, in our view,” the brokerage firm added.
On the quick-commerce businesses of both the companies, Jefferies pointed out that Swiggy’s Instamart business continued to gain traction and grew 15 times year on year, clocking a GMV of $257 million. This compares to $270 million in GMV recorded by Zomato-owned Blinkit.
Going forward, Jefferies said it sees a strong case for Swiggy dropping its “aggressive stance in food delivery to reduce its losses”.
“…and in case that does not happen, Zomato may be induced to increase its aggression to drive growth,” it added.
“With aggression continuing from Swiggy on discounting and its flagship program, Swiggy One, Zomato may come up with Pro membership in some form,” according to the report.
Zomato recently discontinued its Pro and Pro Plus membership schemes and is working on a new “loyalty programme” for food delivery, itss chief financial officer Akshant Goyal said earlier this month.