India’s leading food delivery platforms, Swiggy and Zomato, are facing challenges in maintaining their growth momentum as the industry experiences a slowdown. Analysts suggest that both companies are struggling to onboard new customers and expand beyond the top eight cities, leading to stagnation in total order volumes. The post-pandemic surge in online food ordering appears to be stabilizing, forcing these platforms to rethink their growth strategies.
One of the key hurdles for Swiggy and Zomato is market saturation in metro cities, where most of their business comes from. While these cities continue to generate consistent revenue, the platforms have found it difficult to drive further growth. Expansion into smaller cities and towns has also proven challenging due to lower demand, logistical issues, and price-sensitive consumers who prefer dining out or ordering directly from local restaurants.
Moreover, changing consumer behavior is playing a significant role in the slowdown. With rising inflation and economic uncertainties, customers are becoming more selective about ordering food online. Many are cutting back on discretionary spending, opting for home-cooked meals instead. Additionally, restaurants are increasingly promoting direct orders to avoid commission fees, further impacting the platforms’ profitability.
Despite these challenges, both Swiggy and Zomato are exploring new avenues to sustain their business. Zomato has diversified into the quick commerce segment with Blinkit, while Swiggy is focusing on its Instamart grocery delivery service. However, analysts caution that these ventures may take time to contribute significantly to their overall revenue, especially as competition in the instant delivery space intensifies.
The coming months will be crucial for Swiggy and Zomato as they navigate the evolving food delivery landscape. To revive growth, they may need to invest in customer acquisition, improve loyalty programs, and optimize their pricing strategies. Whether these efforts will help them regain momentum remains to be seen, but for now, the once-booming food delivery sector is showing signs of a slowdown.
