Zomato Welcomes Swiggy On Dalal Street; Swiggy Terms Duo As 'Jai & Veeru'
Swiggy's IPO listed on the NSE with a 7.7% premium.
As Swiggy Ltd. lists on Indian the bourses with a nearly 8% premium on the National Stock Exchange and 5.6% on the BSE, its main competitor and peer in the food delivery business, Zomato, has welcomed the company with a warm tweet on micro-blogging platform X.
"You and I... In this beautiful world," tweeted the company, tagging Swiggy's social handle. The words borrowed from the popular Vodafone (then Hutch) jingle which came out in the '90s.
"It's giving Jai and Veeru," tweeted the newly listed company in response.
The country's second largest food delivery and quick commerce player's IPO was subscribed 3.59 times on its final day of bidding led by institutional buyers.
Founded in 2014, Swiggy offers an all-in-one app for food delivery, grocery shopping, and household essentials—all accessible through its extensive on-demand network.
Swiggy's operations span four main areas:
Food delivery: Ordering and delivery of restaurant food.
Out-of-home consumption: Dining reservations and events.
Quick commerce: On-demand delivery of groceries and household goods through Instamart.
B2B supply chain and distribution: Logistics and warehousing solutions for wholesalers and retailers.
The company also experiments with innovations on its platform, with initiatives such as Swiggy Genie, Dineout, and more.
Swiggy lags behind Zomato by four to six quarters, according to Macquarie, with key metrics in food delivery and quick commerce showing Zomato taking the lead.
While Swiggy boasts a monthly transacting user base of 14 million, Zomato surpasses it with 20 million active users. However, both platforms exhibit similar order frequency, with Swiggy's average order value slightly ahead of Zomato's. Despite these similarities, Swiggy's contribution margin remains lower, primarily due to higher discounting strategies compared to Zomato.
On the other hand, Motilal Oswal takes a more optimistic view on Swiggy's potential, suggesting that while Zomato is currently the dominant player in food delivery, the competition for urban, affluent consumers is still in its early stages. The brokerage points out that Swiggy's customer cohorts appear to be more mature and sticky, with a stronger hold on user engagement when measured by gross order value and monthly active users.
