From Zomato To Paytm: Inside India's Digital Revolution

Zomato, Naukri and Cartrade were some apps that saw strong traffic momentum in June 2024, according to Citi Research. While, Delhivery's traffic remained low, indicating e-commerce traffic trends remain tepid, Paytm's UPI gross merchandise value market share loss may have bottomed out in May-June, it said.

Beauty and personal care sector saw steady growth led by Nykaa, the research note said.

The study was based on average daily active users on Android and iOS apps, along with mobile and desktop website traffic trends and downloads data.

Zomato’s app was thriving, with daily active users growing 11% year-on-year on Android in June 2024, and 6% quarter-on-quarter in the first quarter. Its quick commerce arm, Blinkit, showed a remarkable >120% YoY growth and an 18% QoQ increase, cementing its market leadership, Citi said.

It estimates a 7% QoQ growth in Gross Order Value for Zomato’s food delivery and a substantial 21% QoQ increase for Blinkit.

In the e-commerce sector, growth was moderated. Citi's e-commerce index reported less than 10% YoY growth, with a three-month moving average of 11% YoY, highlighting a slowdown particularly in fashion apps and Flipkart. However, Meesho maintained a high growth rate.

Delhivery’s app traffic performance in e-commerce parcels remained sluggish, with expected volumes growing only 2% YoY and 5% QoQ.

Classifieds platforms Naukri and Cartrade exhibited strong traffic momentum. However, Naukri’s Jobspeak index showed signs of a bottoming out and slow recovery, with a 2% QoQ increase in the overall jobs index and flat growth in the IT sector for June.

Carwale and Bikewale led their segments, while 99acres outperformed competitors in June.

Paytm’s performance in the payments sector indicates a potential recovery. Although DAUs have stabilised, the company is poised for a recovery in downloads as it prepares to resume new customer acquisitions.

Paytm’s UPI GMVs showed a modest 2% month-on-month growth, suggesting that the decline in UPI GMV may have bottomed out in May-June 2024, Citi said.

The Unified Payments Interface sector remained robust, with a 36% YoY growth in GMV in June, the note said. The top three UPI apps accounted for 92% of the market share in May, down slightly from 94% in January. Paytm held a 6.1% market share in May, showing a slight decrease from 6.2% in April.

Nykaa's BPC segment demonstrated a steady 6% YoY growth in Android traffic, with 8% YoY increase over a three-month period. Citi forecasted a 24% YoY increase in BPC GMV for Nykaa in Q1 FY25. However, Nykaa’s fashion segment faced challenges, with a 17% YoY decline in Android traffic, translating to an 8% YoY decrease over a three-month period.

Despite this, Citi projects a 15% and 20% growth in GMV and Net Sales Value respectively for Nykaa Fashion in Q1 FY25.

Leisure travel data indicated potential peaks in Average Daily Rates, with May 2024 showing a 1% YoY increase in ADRs and lower occupancy rates. MakeMyTrip is projected to see 19% YoY growth in hotels and packages Gross Booking Value.

The digital economy in India continues to evolve with significant growth in food delivery and quick commerce and stabilisation in UPI market share. As consumer behavior shifts and new trends emerge, companies like Zomato Ltd., Blinkit, and Paytm are positioned to navigate these changes and capitalise on growth opportunities.