Swiggy vs Zomato: Super-app or separate apps? A clash of strategies for market dominance

The much-awaited initial public offering (IPO) of food delivery giant Swiggy is finally open for subscription today. After Zomato, this is the second IPO from the hyperlocal (direct-to-consumer) commerce segment.

Both companies offer these services using cutting-edge technology and advanced mobile apps. However, these companies have distinct approach to target customer base, especially their mobile app strategy differ from each other.

Bangalore-based Swiggy offers its customers a super-app in which different services such as food delivery, quick commerce (Instamart), and eating out (Dineout) and payments are bundled together on the same mobile application. Meanwhile, Zomato runs a separate app for food delivery (Zomato), quick commerce (Blinkit) and plans to launch its third app (District) soon for restaurant table and event booking.

Swiggy super-app advantage

• According to experts, Swiggy’s super-app business strategy has certain benefits, such as the convenience of offering different services within one app.
• Swiggy's super-app concept is more common in the Chinese e-commerce market with super apps like WeChat, Grab, and Alipay.
• The super-app model helps lower customer acquisition costs and allows the upselling of different services to customers without leaving the app.
• However, in the case of Zomato, the company may have to spend twice to acquire the same customer for the food delivery and grocery business as both are separate apps.

Potential downsides of super-app model

• As super apps integrate multiple offerings under one roof, it can create a cumbersome and complex user interface. Multiple tabs and notifications can spoil the user experience.
• Also, below-par service from one segment, such as a poor food delivery experience, can deter users from buying groceries and other services.

Swiggy vs Zomato: Numbers tell different story

Although the app strategies for both companies are different, there is no right or wrong business approach here. On paper, the Swiggy super-app model may look like a well-thought-out strategy, but financial numbers tell a different story.

In FY24, Zomato reported total sales of ₹12,114 crore and net profit of ₹351 crore. Meanwhile, Swiggy is yet to turn profitable. Swiggy reported total sales of ₹11,634 crore and net loss of ₹2,350 crore.

Comparison of key financial metrics based based on Q1FY25

Swiggy IPO details

Meanwhile, the public issue of the food delivery giant Swiggy opens for subscription on Wednesday, November 6, and closes on Friday, November 8. The company will finalise share allotment on November 11 and initiate refunds on November 12. The tentative listing date for the IPO is November 13.

Swiggy IPO price band has been fixed at ₹371 to ₹390 per share. The ₹11,327-crore mainboard issue comprises a fresh issuance of 11.54 crore shares, aggregating ₹4,499 crore, and an offer-for-sale (OFS) of 17.51 crore shares worth ₹6,828 crore.

Ahead of the IPO launch, Swiggy mobilised ₹5,100 crore from anchor investors at ₹390 per piece, the upper end of the IPO price band.

The company plans to use the IPO proceeds to repay or prepay loans to its material subsidiary, Scootsy. It will also invest a portion in expanding Scootsy and opening more dark stores under the quick commerce segment. The company will also deploy funds for technology upgrades and cloud infrastructure.