Food Delivery Growth Sees Revival For Swiggy, Zomato, And Magicpin

India’s leading food delivery platforms, Swiggy, Zomato and Magicpin, reported a rebound in growth during the October–December quarter after a period of slower expansion.

The turnaround was influenced by robust demand over the festivals, increased order quantities, and increasing use of value-based products.

The advantage of an increased number of users and ongoing investments in marketing, product features and affordability-led programmes to boost the frequency of orders was also beneficial to companies.

What Do The Key Numbers Show?

Swiggy has recorded the highest growth in gross order value (GOV) of 20.5% annually to achieve ₹8,959 crore, the fastest growth in three years. Its average monthly transacting users rose 22% to 24.3 million, while total orders increased to 294 million, up from 234 million a year earlier.

Zomato also recorded improving momentum. Its net order value grew 16.6% year-on-year to ₹9,846 crore in the December quarter. The gross order value increased 21.3%. The company’s average monthly transacting users rose 21% to 24.9 million.

Meanwhile, Magicpin said its unit economics per order improved by more than 60%, reflecting stronger efficiency and monetisation. The company also reported over 40% growth in gross order value in major urban markets such as Bengaluru, Hyderabad and Mumbai.

What Is Driving The Growth?

One of the trends that favours growth is consumption due to affordability. Platforms are now working towards lower-ticket orders, usually within the ₹150-300 bracket. They are also pushing customers to order more often.

Another point that the executives have made is that tier-II and tier-III cities are emerging as key engines of growth, since value-orientated propositions are highly appealing to consumers beyond the biggest metro areas.

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What Does This Mean For Investors?

With the recovery in order growth, the food delivery business in India might be approaching a more stable period of growth following the recent gentling. An increase in user activity, growth in smaller cities, and better unit economics might help Swiggy and Zomato scale in the long term.

For investors, the key factors to watch will be sustained order growth, profitability improvements, and competitive intensity. This is very necessary as businesses are still spending on pricing, marketing, and innovation of products to gain market share.

Sources:

Hindu Business Line

Business World