- Food Aggregators such as Swiggy, Zomato & Uber Eats are planning to slash down the discount and focus on making more profits.
- Talking of cash burn, though, the histories of Zomato and Swiggy are not quite the same but due to discount, they have lost.
As we know it has been a difficult time for food aggregators such as Swiggy and Zomato, particularly since the #Logout campaign began, where a large number of hotels and restaurants from all over the country were logged out of such platforms to collectively reflect the heavy losses they suffered through such platforms.
Nonetheless, while all this was happening freshly, Zomato released its Gold delivery service, which provides customers benefits such as 1+ 1 on food orders, with a total discount being limited to? 300. Swiggy himself was not very docile. It has continuously spent a large sum in launching more of its cloud kitchens.
Today, however, we would like to make it known that the food supply market is beginning to show signs of a slowdown. It has shown enormous exponential growth in the number of orders for 18 months. This has led Swiggy, Zomato and Uber Eats, the top three competitors in this field, to cut discounts as the market is growing stagnant.
It was found that monthly growth dropped between August and October across the respective market, mainly due to a decline in consumer spending.
For Zomato, Swiggy and Uber Eats, the average daily orders are 1.82 million at the beginning of this year in January. This figure shot up to approximately 3 million in June. Since then, however, the numbers have not fluctuated greatly towards the higher side and in October the number of orders flattened between 3.2 million and 3.4 million.
Zomato delivers a daily order of 1.25 million. The numbers of Swiggy range from 1.4 to 1.6 million, while UberEats range from 0.4-0.6 million per day. Swiggy reported in May that it was attempting to increase repeat orders from India’s top 50 million users. However, this came at the risk of removing the order from others and not growing the market.
Commenting on this sluggish situation of orders on the food aggregator market, it is observed that order fluctuations were primarily influenced by increased weekend orders, discounts, city launches and growth led by exclusive tie-ups. A big factor also depends on changes in the season.
For example, due to festivals like Navratri, Dussehra, and Diwali, October reported a 1-2 percent increase in order numbers. All three players are expecting an increase in orders during the Christmas and New Year period, followed by a weak opening in January.
A Swiggy spokesman said the company has grown to more than 500 cities in 40 cities over the past year.
The main focus at these firms is to reduce mounting losses and improve monetization, even if that comes at the cost of declining orders. Swiggy reported about 700,000 orders a day until September 2018, heroically doubling this figure in October to around 1.5 million orders a day. Around the same time, Zomato spent heavily on advertising and branding, while increasing around an equally aggressive rate in the same period, doubling the number of orders from 500,000 per day to 1,25 million per day.
Talking of cash burn, though, the histories of Zomato and Swiggy are not quite the same.
Zomato has cut its cash burn by more than half to less than $20 million a month from $45 million in March As for Swiggy, its cash burn in the food delivery business is about $30-35 million, even though it is trying its best to bring this number down.