Swiggy has shut down its cloud kitchen brand The Bowl Company in Delhi-NCR as losses continue to mount for the food and grocery delivery major.
In a statement, a Swiggy spokesperson said the expansion was an experiment.
“This experiment has led to its due learnings, even as we focus on operational excellence for the brand. We will continue to invest and grow The Bowl Company in cities like Bengaluru, Chennai, and Hyderabad where the brand is well-loved and growing,” the spokesperson said.
Apart from Bowl Company, Swiggy operates brands such as Breakfast Express and Homely.
Last week, Swiggy investor Prosus, which holds a 33 percent stake in the company, said the firm saw significant growth in sales and order volume in the first half of 2022.
According to Prosus’ earnings report, the food delivery business grew 38 percent and gross merchandise value (GMV) 40 percent during the first six months of the year.
As per the report, the GMV of food delivery was $1.3 billion, and quick commerce was $257 million.
Prosus said that its share of Swiggy’s revenue grew by 72 percent to $150 million, reflecting higher average order values and increased revenue from delivery fees and ad sales.
Prosus had said its share of Swiggy’s trading loss was at $105 million due to investment in food delivery and in grocery delivery business Instamart.
“Our share of Swiggy’s trading loss increased to $105 million, driven by investment in both the core restaurant food delivery business to increase growth and in Instamart to expand its footprint,” said Prosus.
According to a note by Jefferies, Swiggy’s losses during the first half of the year are at over $315 million, which it said was much higher than Zomato and Blinkit’s losses during the same period at around $170 million.
The Jefferies note said that the Prosus report points to Zomato taking the lead and Swiggy losing market share.
“This appears to be highest market share for Zomato, in our view and is despite aggression from Swiggy, which has been offering higher discounts and continuing with its flagship 'Swiggy One' (Zomato discontinued Pro). This partially explains a much higher loss in case of Swiggy,” the note said.
Jefferies’ analysts said they see a strong case for Swiggy dropping its aggressive stance on food delivery to reduce losses, and if it does not, Zomato may have to increase aggression.
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