Swiggy has been dealt a blow with a doubling of its losses to Rs 3,628.90 crore in FY22 from Rs 1,617 crore in the previous year.
The numbers
Analysts say it’s because of the company’s efforts to grow the gross revenue from operations, which rose 124% to Rs 5,705 crore from Rs 2,547 crore in FY21.
Cash outflows from operations stood at Rs 3,900 crore during the last fiscal
In comparison, rival Zomato reported operating revenues of Rs 4,192 crore in FY22.
This is up 110% over the previous year, even as it posted losses of Rs 1,203 crore, up 46%.
GMV
In late November, analysts at Jefferies had observed that Zomato may be gaining an edge over Swiggy despite the latter’s more attractive discounts to customers.
The company made $1.6 billion, or around Rs 13,000 crore in gross merchandise value (GMV).
Swiggy’s GMV stood at $1.3 billion, or roughly Rs 10,500 crore.
Too many discounts behind downfall?
However, Swiggy might have one asset on its side- its flagship ‘Swiggy One’ scheme which it still runs.
On the flipside Zomato has closed its “Pro” membership program.
The analysts said that this “partially explains a much higher loss for Swiggy.”
Q-commerce to the rescue
However, Swiggy has seen good growth in quick commerce.
Instamart has now become one of Swiggy’s biggest assets- accounting for about 35% of revenues.
Not to mention, the quick-commerce arm, which competes with Zepto, Dunzo and Zomato’s Blinkit, gained momentum in the year gone by.
While Zomato’s attempt to launch its own service, it eventually shut it down due to challenges in inventory and gaps in order fulfillment.
However it is not far behind, having finalised its strategy of grocery delivery play via the Blinkit acquisition in Q2FY23.
How Swiggy still has a chance
It also has an edge over Zomato. How?
It is privately held unlike Zomato, which gives a twofold advantage.
First, it allows it to consider strategic moves and their outcomes without the glare of the media.
Second, while Zomato is chasing profitability and growth options in the full glare of the outside world and its pressures, Swiggy can take it easy.
It gets the opportunity to pick and choose where it follows its competitor’s moves.
This is valuable because the history of both these firms has been to act first and then evaluate impact, a hasty approach.
