For the majority of industries, the COVID-19 pandemic has been a crisis period. However, a few sectors thrived during the period. One among them is the foodtech industry. As people remained inside their homes to contain the spread of the coronavirus, food delivery riders delivered orders to customers at their homes taking a huge risk. This has eventually resulted in the growth of the industry. In India, the two major players were Swiggy and Zomato. Their order numbers hit a record level. Still, the industry had to face some challenges. One of the problems was achieving the smart margins. Low AOVs, high delivery costs and deep discounts adversely affected the brands. They could not reach margin growth beyond a certain point. This gradually fuelled competition between the two giants.
Right now, there is a stiff competition going on between Swiggy and Zomato. They could not incentivise all three segments of the food delivery ecosystem—customers, riders and restaurants. This has urged them to play outside food delivery. And, both have tried their luck in grocery delivery, and restaurant discovery. These are the two areas where Swiggy and Zomato are now clashing with each other. They both want to mark their signature and derive profit from the sectors.
Zomato’s stronghold is the restaurant ecosystem. However, after a few failed attempts, it is venturing once again into grocery delivery with Blinkit, which was earlier known as Grofers. In the grocery delivery scenario, Zomato’s opponent is Swiggy’s Instamart grocery service. Swiggy, on the other hand, is getting into restaurant bookings through the table booking app Dineout.
Interestingly, both are also planning pay-later services, which would allow customers to clear bills at the end of the month. Surely, the coming days will see a war between Zomato and Swiggy.
