At a time when food delivery has slowed down and the two major players look to make incremental market share gains, Zomato now lets users build multiple carts at the same time. With this, the Gurugram-based food delivery startup takes a leaf out of PhonePe-owned Pincode’s playbook, which also allows users to build carts from across categories.
Introduced as part of its latest app update, Zomato’s users can now build carts from up to four restaurants and eventually order from the eatery of their choice. Further, after checking out one cart, users can come back and complete orders from the remaining carts as well, similar to what Pincode, PhonePe’s dedicated app for the Open Network for Digital Commerce (ONDC), offers.
The multi-cart feature was even highlighted when Pincode was launched, with PhonePe CEO Sameer Nigam stating that it betters the shopping experience, thereby resulting in higher sales.
Similarly, if such a move helps make purchase decisions faster, it could help Zomato snatch more market share from its competitor.
"At Zomato, we aim to constantly innovate and evolve for better customer experience. With this feature, customers can create multiple carts without back and forth across different menus," a Zomato spokesperson told Moneycontrol.
Tug of war
Both Swiggy and Zomato have been constantly trying to one-up each other as they attempt to increase their market share in the food delivery market, which is valued at around $5 billion.
Currently, Swiggy has a market share of around 45 percent, and is smaller than Zomato which is the leader with a 55 percent share.
That was a shift from 2020 when Swiggy was the leader with more than 52 percent market share, which declined to around 47 percent in 2021, and then further dropped to about 45 percent this year, indicating three years of constant declines for the Bengaluru-based startup, according to Jefferies.
That was despite Prosus — which owns 33 percent of Swiggy and is the largest shareholder of the food delivery giant — stating in its annual report that Swiggy’s revenues grew from over $600 million to around $900 million in financial year (FY) 2023.
Swiggy’s topline of around $900 million compares with Zomato’s revenues of about $885 million.
Despite the two giants having a roughly similar topline, Swiggy’s losses of around $545 million were significantly higher than Zomato’s roughly $110 million during the same period.
“Swiggy’s inability to capitalise on the opportunity to gain market share in the food delivery business in 2HCY22 confounds us,” the analysts at JM Financial said in a note.
In the near-term, the market shares are unlikely to move significantly as both Swiggy and Zomato now prioritise profitable growth over just acquiring new users.
“Swiggy, on a consolidated basis, has been reporting significantly higher absolute loss. This leads us to believe that Zomato has been far superior in execution versus Swiggy,” JM Financial’s analysts added.
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