Swiggy's Market Debut Drives Growth in India's Food & Quick-Commerce Sector

From its humble beginnings as a food delivery service in 2014, Swiggy has developed into one of India's most valued businesses in the online food delivery sector. Swiggy has leveraged technology and other growth strategies to strategize and scale its services to millions across India over the past decade and positioned itself as the market leader in hyperlocal commerce in India.

Swiggy's business model prioritizes hyperlocal commerce through technology and logistics networks, supported by its gig-based workforce of delivery partners. Fast and reliable delivery is made possible by Swiggy's "dark stores," which are warehouses positioned in close proximity to residential and business areas. With over 112 million users and partnerships with more than 196,000 restaurants, Swiggy has firmly established itself in 653 cities across India.

Swiggy's business success is built on continuously expanding its service offerings. With the launch of Instamart, a fast-commerce platform that provides deliveries for groceries and necessities, the business has expanded since 2020. Instamart currently serves customers' increasing needs for speed and convenience by operating in 27 locations and providing a large assortment of 17,000 stock-keeping units (SKUs) in 523 dark stores.

Financial growth and stock market debut

Swiggy's financial history shows both remarkable expansion and market challenges. Swiggy's net revenues showed notable fluctuations between the fiscal years 2019 and 2024. Starting from Rs. 12,973 crore in 2019, Swiggy's net sales saw a strong 187.4% year-on-year increase in 2020, reaching Rs. 37,277 crore. However, Swiggy's 2020-21 performance was impacted by the COVID-19 pandemic, which resulted in a 28.2% drop in net sales to Rs. 26,759 crore. Swiggy rapidly recovered from the loss, with net sales reaching to Rs. 61,198 crore in 2022. The company experienced consistent growth, achieving a 42.4% increase during 2022-2023, followed by a 33.5% rise in 2023-2024, ultimately reaching a revenue of Rs. 116,343 crore.

Swiggy marked a major milestone with its recent IPO, which opened for bids on November 6, 2024, and closed on November 8. Priced between Rs. 371 and Rs. 390 per share, the IPO was oversubscribed by 3.59 times. Shares were listed on the NSE at Rs. 420, a 7.7% premium to the IPO price, and closed at Rs. 456, yielding a market capitalization of over Rs. 1.03 lakh crore. Moreover, early investors Prosus, Accel, Elevation Capital, and SoftBank received substantial returns from the IPO, ranging from 3x to 35x.

The cash generated from the IPO proceeds will, among other things, assist Swiggy in meeting its expansion plans, covering the costs of brand marketing, and developing technology infrastructure. Acquisitions, including Scootsy, a subsidiary of Swiggy.

Competition and user engagement

Swiggy's primary competitor, Zomato, currently holds a larger market share, accounting for 57% of the online food delivery market in India, compared to Swiggy's 43%. In the same period, Zomato reported achieving up to 35% growth in sales, whereas Swiggy's sales growth was slower in previous years, achieving only 24% growth in FY24. Nonetheless, Swiggy continues to dominate the industry with a 436 average order value (AOV), slightly higher than Zomato's 425 and a higher average of 3.7 orders in a month compared to Zomato's 3.6.

Furthermore, the size of Swiggy's user base shows how popular it is with Indian customers. The platform handled more than 1.5 million food orders daily in 2024, with Instamart contributing an extra 500,000 orders every day. Interestingly, 60% of all meal orders placed on Swiggy in 2024 were vegetarian. On the other hand, biryani emerged as the most popular food on the platform, with 2.5 orders being placed every second in 2023. For every 5.5 chicken biryanis ordered, one veg biryani was also placed, showing a diverse range of food preferences among Indian consumers. This dish was searched on the platform over 4 million times.

During Durga Puja in 2023, Swiggy saw an impressive 7.7 million orders for gulab jamun, outshining traditional Bengali desserts like roshogolla. Additionally, the success of Swiggy depends on a committed workforce and a technology-driven strategy. Swiggy claimed an average of 457,249 active monthly delivery partners in June 2024, which was 30% more than the previous year. With approximately 231 million options issued as of September 2024, based on an IPO upper price band of Rs. 390 per share, Swiggy's Employee Stock Options Scheme (ESOP) is a key component of its engagement strategy.

Swiggy's IPO ultimately puts the company on a growth path, enabling it to continue investing in cloud infrastructure, technology, and brand promotion. This path of determination and adaptability is necessary for success in India's rapidly evolving digital economy, and the company's IPO marks both an achievement and a shift in the direction of becoming a major force in the nation's food and quick-commerce industry.