SWIGGY

VS
ZOMATO
J.D.BIRLA INSTITUTE
PREPARED BY:
AAKANKSHA BAHETY
ROLL NO: 182
B. COM (HONS.), SEMESTER: VI
SESSION: 2014-17

1
 ACKNOWLEDGEMENT

I would like to take this opportunity to express my sincere appreciation to the following that
helped me to complete this research project. I am deeply grateful to J.D.BIRLA INSTITUTE,
Kolkata for providing me with the opportunity to be a part of this dissertation.

I would like to thank all the people who have been involved directly and indirectly in the
creation of this project.

My love and appreciation to all my friends who gave their valuable feedback and to all those
who helped me in making market analysis and collecting data for the project.

However, I accept the sole responsibility for any possible errors in the report and would be
extremely grateful to the readers of this project report if they bring such mistakes to my
notice.

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TABLE OF CONTENTS
SL. NO. TOPIC PAGE NO.

1 EXECUTIVE SUMMARY 4

2 INTRODUCTION 5

3 AIMS AND OBJECTIVES 6

4 LITERATURE REVIEW 7

5 RESEARCH METHODOLGY 10

6 ANALYSIS AND INTERPRETATION 11

7 CONCLUSION AND 24
RECOMMENDATION
8 REFERENCES 26

9 27
ANNEXURE

3
EXECUTIVE SUMMARY

Swiggy VS Zomato

In this report I have attempted to compare Swiggy with Zomato.

Swiggy was founded by Sriharsha Majety, Rahul Jaimini and Nandan Reddy in
December, 2013 in Bangalore and became operational in FY 2014-15. The
online food-ordering and delivery start-up is owned and operated by Bundl
Technologies Private Limited.

Zomato was founded in 2008 by Deepinder Goyal and is one of India’s largest
restaurant guides, listing over 42,000 restaurants across 12 cities in the country
Only in April 2015, the company ventured into food delivering in NCR and in a
month unbundled the feature and launched a separate app- Zomato Order.

The report consist of the aims and objectives behind preparing it. A literature
review of Swiggy and Zomato has been given in order to understand the
companies and their respective financial positions better.

Then, questionnaires were distributed to 40 people aged 14 and above divided

into different age groups. They takes and opinions on both the companies were
taken and analysis was done on it, followed by interpretation. I have also done a
SWOT analysis on both the companies.

Finally, a conclusion has been given regarding how both the companies have
fared up till 2016, their integrations with other companies, and their plans for
future and which company has been leading the charts till now.

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INTRODUCTION

Swiggy

Swiggy is a food ordering and delivery company based out of Bangalore, India.
Swiggy was inspired by the thought of providing a complete food ordering and
delivery solution from the best neighbourhood restaurants to the urban foodie. It
came forth into the bustling 21st century world to grant every foodie within its
reach, a seamless dining experience, while adding the luxury of indulging from
the comfort of one’s couch. It has its own exclusive fleet of delivery personnel
to pickup orders from restaurants and deliver it to customers . Having its own
fleet gives them the flexibility to offer customers a no minimum order policy on
any restaurant and accept online payments for all partner restaurants that it
works with. Their delivery personnel carry one order at a time which ensures
that customers get reliable and fast deliveries.

Swiggy was co-founded by Rahul Jaimini (IIT-KGP alumnus and chief

technical officer), Sriharsha Majety (IIM Calcutta & BITS Pilani alumnus, with
a vision to revolutionize the restaurant industry in India, by familiarizing the
general public with the comfort of home-delivered food) and Nandan Reddy
(MSc Physics Hons. from BITS Pilani with a penchant for great food and
operational efficiency.)

Zomato

Zomato is a restaurant search and discovery and food ordering and delivery
service founded in 2008. It currently operates in 23 countries, including India.
The service began as "Foodiebay". In November 2010, Foodiebay was renamed
as Zomato. Its parent company is Info Edge. It provides information and
reviews on restaurants, including images of menus where the restaurant does not
have its own website. Their mission is to ensure that nobody has a bad meal.
They do it by helping people discover great places around them. Its team
gathers information from every restaurant on a regular basis to ensure our data
is fresh. Another factor is to build amazing experiences around dining. And
lastly by enabling restaurants to create amazing experiences, to spend more time
focusing on food itself, which translates directly to better dining experiences
with dedicated engagement and management tools. Zomato was founded by
Deepinder Goyal (IIT- Delhi Alumni) and Pankaj Chaddah (IIT- Delhi Alumni).

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AIMS AND OBJECTIVES

This report has been made with the following objectives:

 To look into the companies Swiggy and Zomato and prepare a report on
it.
 To compare their financials and business models via literature review.
 To find out the public opinion about Swiggy and Zomato through data
research and analyse their results.
 To give a suitable conclusion as to which company is leading the market.

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LITERATURE REVIEW

The online food ordering culture is booming in India, bringing variations in the
way traditional restaurants worked. According to a recent sectoral report
published by IBEF (Indian Brand Equity Foundation), food has been one of the
largest segments in India’s retail sector, valued at $490 billion in 2013. The
Indian food retail market is expected to reach Rs 61 lakh crore ($894.98 billion)
by 2020.

Owing to fierce competition and vast market, the space is coming up with a lot
of innovation catering to customer convenience, satisfaction and retention.
Swiggy and Zomato are among the top rated food apps. We take a closer look at
the financials reported by these companies in FY 14-15.

Funds raised (millions)

40
37
35
35

30

25

20 Swiggy
16.5
Zomato
15

10
10
7

5 3.5
2 2.5

0
Series A Series B Series C Series D

Above is a quick snapshot of the funds raised by various food ordering

companies till date.

Swiggy reported sales of Rs 7.41 lakh in the first year of operation and Rs 4.18
lakh as other income (income from non-business activities). Employee costs is
the largest cost to the company at Rs125.62 lakh, which is 57 percent of the
total cost of sales. Company is maintaining a high net worth at Rs 386.25 lakh,
which gives it a bandwidth to take further exposure to debt, without weakening

7
the leverage ratios. In line with the business model, debtors are minimal and
payables stand at Rs 6.21 lakh. The company maintains a good cash reserve at
Rs 345.14 lakh despite having a negative working capital gap. Thus, the
working capital cycle looks sustainable, which is a positive indicator for a start-
up business. It is too soon to comment on the overall financial performance of
the company, without looking at the trend in FY 15-16. A growth in turnover
and improvement in margins while maintaining the working capital cycle is
definitely what we will be looking for.

Zomato has been showing a growing trend in revenues and grew by 83 percent
to Rs 7,883.57 lakh in FY 2014-15 from Rs 3,060.28 lakh in the previous year.
This does not include the other income of Rs 1,614.66 lakh, which comprises
interest from FD and current investment of Rs 139.18 lakh and gain on sale of
current investments of Rs 1,468.34 lakh.

The graph above shows revenues including other income. Cost of sales stood at
Rs 16,049 lakh, exponentially higher than previous year at Rs 7,097.75 lakh.
Major cost is employee cost, which stood at Rs 9,788.43 lakh, which was 61
percent of the total cost of sales. Major components of the other expenses,
which stood at Rs 6,260.58 lakh, included rent expenses of Rs 990.55 lakh,
Repairs to building of Rs 207.21 lakh, conveyance cost of Rs 1,105.50 lakh, and
advertisement expenses of Rs 1,802.05 lakh. Losses of Rs 7185.54 Lakh were
booked for the year. Reserves and surplus are at Rs 66,172.54 lakh, giving a
sound financial cushion to the company. Short-term borrowings include Rs 2.65

8
lakh is unsecured borrowing from bank at interest rate of three percent per
month and bank OD with current balance of Rs 1,115.

In conclusion, a lot has been happening in the online food ordering space where
increased competition is making survival tough for various players. We keep
coming across stories like Dazos and Eatlo shutting shop, SpoonJoy snapped up
by grocery shopping app Grofers, Tiny Owl struggling for survival and so on.
The survivors are striving to manage cost, fight competition and reduce burn
rate to break even and hit profitability fast. This analysis is based on FY 2014-
15 financials and as expected from the vibrant start-up world, we wait to see
what’s out with the old and in with the new in the coming years.

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RESEARCH METHODOLOGY

I have used primary source of data for my research methodology.

I have used questionnaires. They were distributed to 40 people of age 14
onwards divided into different age groups and their answers were recorded. The
Questionnaire is enclosed in Annexure - 1.

I have also done a SWOT analysis of Swiggy and Zomato.

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ANALYSIS AND INTERPRETATION

ANALYSIS

This is an analysis of the answers from the questionnaire which are summarised
below.

Gender:

Age group:

It is observed that there were 20 males and 20 females who's answers were
recorded in the questionnaire, out of which 12 people were in the age group 14-
20, 25 people were in the age group 21-29 and only 3 people were in the age
group 30+.

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Do you order food online?

From which company do you prefer ordering food?

Here we see that almost 90% of the target group order food online while just
10% of them don't. Further, we also see that almost 45% of the people prefer
Zomato to Swiggy, which is at 42%. The rest prefer other companies to order
their food online.

Do you have the Swiggy application downloaded?

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Do you have the Zomato application downloaded?

Only 64% of the target group has the Swiggy application downloaded and 77%
of the group has the Zomato app downloaded, irrespective of whether it is their
preferred delivery service or not.

How did you get to know about your preferred delivery service?

It is seen that 52% of the people got to know about their preferred delivery
service via the Internet, 29% via friends or family and just 18% via
advertisements on TV and hoardings.

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How often do you order food online?

We see that 35% people order food online monthly, 30% order weekly, 15%
order every alternate week, 7% order daily while 10% don't order online at all.

How do you prefer to order food?

81% of the people prefer ordering food online via mobile applications, 15%
prefer ordering on call while the rest prefer ordering through websites.

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Which one of the two is more expensive?

Which mobile application is more user-friendly?

Which one of the two delivers better quality of food?

61% of the target group are of the opinion that Zomato is more expensive than
Swiggy, while 39% believe the opposite.
54% of the target group are of the opinion that Zomato is both more user-
friendly and serves better quality of food than Swiggy, while the rest 46% opine
the same about Swiggy.

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Does Swiggy make timely deliveries?

Does Zomato make timely deliveries?

It is seen that 79% of the people claim that Swiggy makes timely deliveries
while 21% don't. It is also seen that 66% of the people claim that Zomato makes
timely deliveries while 34% don't. These opinions are irrespective of their
preferred delivery choice.

Have you ever faced any problems while using the Swiggy application or
ordering via Swiggy?

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Have you ever faced any problems while using the Zomato application or
ordering via Zomato?

68% of the people have never faced any problems while using Swiggy or while
ordering via Swiggy, while 32% have. 78% of the people have never faced any
problems while using Zomato or while ordering via Zomato, while 22% have.

On a scale of 1-5 how satisfied are you with your experience at Swiggy?

On a scale of 1-5 how satisfied are you with your experience at Zomato?

17
According to the ratings, 36% of the people rate their experience with Swiggy a
4, which is 'good'. 21% rate Swiggy a 5, which is 'very good'. 16% rate their
experience a 3, which is 'satisfactory'. While the rest equally divide their votes
between a 1 and 2, which is 'very bad' and 'bad' respectively.

According to the ratings, 32% of the people rate their experience at Zomato a 5,
which is 'very good'. Another 32% rate their experience at Zomato a 4, which is
'good'. 24% rate Zomato a 3, which is 'satisfactory'. 10% rate Zomato a 2 while
2% rate it a 1, which is 'very bad'.

Which one of the two would you recommend to your friends and family?

Finally, we see that 61% of the people would recommend Zomato to their
friends and family, while the rest of the 39% would recommend Swiggy.

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INTERPRETATION

According to the analysis of the questionnaire, 40 people recorded their answers

out of which 20 were male and 20 female. They were divided into age groups of
14-20, 21-29 and 30+.

It is observed that almost 90% of the people who took part in the survey order
food online, while just 10% don't. It shows us that in this new era of online food
delivery, people are actively taking part in it. We also see that 45% of the
people prefer Zomato while 42% prefer Swiggy. Just 13% prefer other
companies. Thus we can see that Swiggy and Zomato are among the top choices
of people.

64% of the target group have the Swiggy application downloaded, and 77%
have Zomato downloaded. Many of them have both the applications
downloaded, which shows that many of them use both Swiggy and Zomato.

When questioned about how did they get to know about their preferred delivery
service, it was seen that a majority of the people (52%) got to know about it via
the Internet. 29% of the people got to know about it via friends and family and
18% via advertisements of TV and hoardings. Thus we can interpret that both
the companies have to work more on their marketing skills to create more brand
awareness via advertisements, be it on TV or radio or hoardings. They should
also take out schemes so that the public is more inclined to use their apps. A
little more marketing on the internet would also be beneficial for both, as the
internet now is the most successful and easiest way to spread brand awareness.

We see that 35% people order food online monthly, 30% order weekly, 15%
order every alternate week, 7% order daily while 10% don't order online at all.
81% of the people prefer ordering food online via mobile applications, 15%
prefer ordering on call while the rest prefer ordering through websites.
So, a fair suggestion to both Swiggy and Zomato would be to offer more
discounts or combo meals to increase their number of orders like 'buy one get
one free', or 'get 15% off on minimum order price of Rs 150' and other similar
schemes. Another way to increase the number of orders would be to offer
discounts only while ordering via the application, so that their app number of
downloads is increased and people are inclined to order more.

19
61% of the target group are of the opinion that Zomato is more expensive than
Swiggy, while 39% believe the opposite. 54% of the target group are of the
opinion that Zomato is both more user-friendly and serves better quality of food
than Swiggy, while the rest 46% opine the same about Swiggy.
Here we see that Swiggy beats Zomato in pricing. But, it also seen that a
majority of the people believe that the Zomato application is more user-friendly
and it serves better quality food. Thus it can be safely said that Swiggy should
give more emphasis on taking public feedback about its application and work on
improving their app via surveys, online forms or questionnaires. Swiggy should
also work on improving their packaging.

It is seen that 79% of the people claim that Swiggy makes timely deliveries
while 21% don't. It is also seen that 66% of the people claim that Zomato makes
timely deliveries while 34% don't. These opinions are irrespective of their
preferred delivery choice.
Swiggy is well known for its own fleet delivery men who are trained to deliver
food on time. However we see a very small percentage claiming that Swiggy
doesn't always deliver food on time. Zomato should too focus on delivering
food in a timely manner.

68% of the people have never faced any problems while using Swiggy or while
ordering via Swiggy, while 32% have. 78% of the people have never faced any
problems while using Zomato or while ordering via Zomato, while 22% have.
Thus Swiggy and Zomato both should focus on removing the problems and
kinks and give emphasis on using newer technologies to make their respective
applications better.

In the next question we have asked the public about their overall experience and
asked them to rate it from 1-5. Where,
1 - Very bad.
2 - Bad
3 - Satisfactory
4 - Good
5 - Very good.

According to the ratings, a majority of the people (36%) rate their experience
with Swiggy a 4, which is 'good'. 21% rate Swiggy a 5, which is 'very good'.
16% rate their experience a 3, which is 'satisfactory'. While the rest equally
divide their votes between a 1 and 2, which is 'very bad' and 'bad' respectively.

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Thus Swiggy should focus on improving public relations and try more to
improve their services and mobile-application.

According to the ratings, a majority of the people (32%) rate their experience at
Zomato a 5, which is 'very good'. Another 32% rate their experience at Zomato
a 4, which is 'good'. 24% rate Zomato a 3, which is 'satisfactory'. 10% rate
Zomato a 2 while 2% rate it a 1, which is 'very bad'.
Zomato takes the lead when it comes to public experience. Here we see that a
majority of the public rates Zomato a 5, which is very good. Hence Zomato
should focus on keeping their ratings constant and keep their customers and
users happy.

Finally, we see that 61% of the people would recommend Zomato to their
friends and family, while the rest of the 39% would recommend Swiggy. Hence
it can be concluded that Zomato takes the lead, and people prefer Zomato to
Swiggy.

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SWOT ANALYSIS

STRENGTHS

 Swiggy offers a wide range of restaurants for maximum customer

satisfaction with a variety of foods and beverages.
 Swiggy has ensured quick delivery for its orders with the help of its
exclusive fleet of delivery personnel who are specially trained for timely
deliveries.
 It has a good brand image.
 Excellent customer support.
 Free delivery in some cities.

WEAKNESSES

 One can order from Swiggy only from restaurants within one's vicinity.
 Low awareness of Brand/ low marketing.
 Delivery charges in some cities.
 Price differences in menu and app prices.
 Technical problems in application.

OPPORTUNITIES

 Swiggy is a pioneer is Food Delivery Business.

 It has a growing market for potential customers.
 Swiggy does not have much competition in the industry as compared to
other sectors.
 It is cost effective and provides good quality of food delivery options
which are lacking in the market.

THREATS

 Present customer base is not very high.

 Increasing health consciousness
 Number of competitors are increasing; namely Zomato, FoodPanda, etc.
 Since the number of competitors is less, Swiggy is negligent towards their
growing numbers.

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Zomato

STRENGTHS

 Users perceive Zomato as ‘Specialty product’ (Focused only on foods &

restaurants)
 High awareness
 Global presence - 25 countries
 Superior technology and strong workforce.
 Simple and user-friendly interface
 Strong brand recognition and has won several accolades and awards.
 Asset less business model
 High financial leverage due to its business model
 Aggressive and Innovative marketing strategy.

WEAKNESSES

 Competition from search engines & other similar apps means limited
growth.
 Drastic growth means susceptible to bad content.
 High staff turnover
 Work Inefficiency
 Not customized for each target market.

OPPORTUNITIES

 Opportunity to expand to further more countries.

 Increasing internet penetration & number of smartphone users.
 Rapid technology development.
 Newer technology can help Zomato expand and increase efficiency.

THREATS

 Intense competition, like Swiggy, FoodPanda, Burrp!, JustEat, etc.

 Lack of clear rules and regulations - Changes in government policy can
easily affect the business model.
 Business model can be easily imitated by other players.

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CONSLUSION

The online food ordering trend is sort of on a high in India, and with all that
people would love and want food delivered right to their doorstep, it sure is a
delicious venture. Although the online platforms providing the services are still
in their budding stage but that does not keep them from competing with each
other. Swiggy and Zomato, came out to be the top online food service platforms
in 2016. The online food ordering business in India is in its nascent stage, but
witnessing exponential growth. The organised food business in India is worth
$48 billion, of which food delivery is valued at $15 billion.

Zomato was a ‘restaurant search and discovery app’ business and recently
ventured into food delivery. The company ventured into food delivering in NCR
and in a month unbundled the feature and launched a separate app- Zomato
Order. It is said that the company will invest $40 million in food-ordering to
capture a dominant share of the market in India and the UAE. There seems to be
no bounds shown by this venture in regard of its growth in the country.

But, Swiggy is surely making news adapting new ways to lead up to the charts.
The net worth of the company is Rs 3,86,34,590 with a turnover of Rs 7,41,702.
It is also planning to set up kitchens jointly with restaurants as it looks for
higher revenues. These kitchens will function as production units without dine-
in facilities and cater to demand generated on Swiggy from surrounding
localities.

The new combinations of different ventures marks to be very profitable and

convenient at the same time. Like, Google continues to integrate third-party
apps on its search pages, in an effort to make it user-friendly. The latest
integration is the Zomato and Swiggy that will enable the people to place the
order for food without leaving the search. Zomato plans to integrate with Uber
and Instagram so customers can each order an Uber by way of the Zomato app
to take them to their vacation spot and add photographs from Instagram to
Zomato.

With the ongoing scheme and action approach shown by both the platforms,
Zomato comes to lead the charts in 2016 owing to its already vast approaching
food platform. Swiggy is coming to terms of the newly found race and is pacing
up with various new strategies which sure come as a benefit to food lovers. The
upcoming year will definitely witness some more propositions put forward by
both the ventures in its investment sector as well as growth via different new
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methods. Even with that these two ventures will continue to grow to satisfy our
taste buds in the perfect way, this will only be possible when they put up the
best features for their position to be on the top, all of which 2017 is yet to show.

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REFERENCES

I have referred to the following websites while preparing this report:

 www.swiggy.com
 www.zomato.com
 www.slideshare.net
 www.quora.com
 www.financialexpress.com
 www.weblistr.com
 www.mbaskool.com

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ANNEXURE - 1

Questionnaire:

Gender: Male/Female

Age group:

o 14-20
o 21-29
o 30+

Do you order food online: Yes/No

From which company do you prefer?

o Swiggy
o Zomato
o Others

Do you have the Swiggy application downloaded: Yes/No

Do you have the Zomato application downloaded: Yes/No

How did you get to know about your preferred Delivery service?

o Advertisements on TV & hoardings

o Internet
o Friends or family

How often do you order food online?

o Daily
o Weekly
o Every alternate week
o Monthly
o Never

How do you prefer to order food?

o Mobile Application
o Website
o On call

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Which one of the two is more expensive?

o Swiggy
o Zomato

Which mobile-application is more user-friendly?

o Swiggy
o Zomato

Which one of the two delivers better quality of food?

o Swiggy
o Zomato

Does Swiggy make timely deliveries: Yes/No

Does Zomato make timely deliveries: Yes/No

Have you ever faced any problems while using the Swiggy application or while
ordering via Swiggy: Yes/No

Have you ever faced any problems while using the Zomato application or while
ordering via Zomato: Yes/No

On a scale of 1-5 how satisfied are you with your experience at Swiggy:

o 1
o 2
o 3
o 4
o 5

On a scale of 1-5 how satisfied are you with your experience at Zomato:

o 1
o 2
o 3
o 4
o 5

Which one of the two would you recommend to your friends and family?
o Swiggy
o Zomato
28