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SWIGGY

VS

ZOMATO

J.D.BIRLA INSTITUTE

PREPARED BY:

AAKANKSHA BAHETY

ROLL NO: 182

B. COM (HONS.), SEMESTER: VI

SESSION: 2014- 17

ACKNOWLEDGEMENT

I would like to take this opportunity to express my sincere appreciation to the following that helped me to complete this research project. I am deeply grateful to J.D.BIRLA INSTITUTE, Kolkata for providing me with the opportunity to be a part of this dissertation. I would like to thank all the people who have been involved directly and indirectly in the creation of this project. My love and appreciation to all my friends who gave their valuable feedback and to all those who helped me in making market analysis and collecting data for the project. However, I accept the sole responsibility for any possible errors in the report and would be extremely grateful to the readers of this project report if they bring such mistakes to my notice.

EXECUTIVE SUMMARY

Swiggy VS Zomato In this report I have attempted to compare Swiggy with Zomato. Swiggy was founded by Sriharsha Majety, Rahul Jaimini and Nandan Reddy in December, 2013 in Bangalore and became operational in FY 2014-15. The online food-ordering and delivery start-up is owned and operated by Bundl Technologies Private Limited. Zomato was founded in 2008 by Deepinder Goyal and is one of India’s largest restaurant guides, listing over 42,000 restaurants across 12 cities in the country Only in April 2015, the company ventured into food delivering in NCR and in a month unbundled the feature and launched a separate app- Zomato Order. The report consist of the aims and objectives behind preparing it. A literature review of Swiggy and Zomato has been given in order to understand the companies and their respective financial positions better. Then, questionnaires were distributed to 40 people aged 14 and above divided into different age groups. They takes and opinions on both the companies were taken and analysis was done on it, followed by interpretation. I have also done a SWOT analysis on both the companies. Finally, a conclusion has been given regarding how both the companies have fared up till 2016, their integrations with other companies, and their plans for future and which company has been leading the charts till now.

INTRODUCTION

Swiggy Swiggy is a food ordering and delivery company based out of Bangalore, India. Swiggy was inspired by the thought of providing a complete food ordering and delivery solution from the best neighbourhood restaurants to the urban foodie. It came forth into the bustling 21st century world to grant every foodie within its reach, a seamless dining experience, while adding the luxury of indulging from the comfort of one’s couch. It has its own exclusive fleet of delivery personnel to pickup orders from restaurants and deliver it to customers. Having its own fleet gives them the flexibility to offer customers a no minimum order policy on any restaurant and accept online payments for all partner restaurants that it works with. Their delivery personnel carry one order at a time which ensures that customers get reliable and fast deliveries. Swiggy was co-founded by Rahul Jaimini (IIT-KGP alumnus and chief technical officer), Sriharsha Majety (IIM Calcutta & BITS Pilani alumnus, with a vision to revolutionize the restaurant industry in India, by familiarizing the general public with the comfort of home-delivered food) and Nandan Reddy (MSc Physics Hons. from BITS Pilani with a penchant for great food and operational efficiency.) Zomato Zomato is a restaurant search and discovery and food ordering and delivery service founded in 2008. It currently operates in 23 countries, including India. The service began as "Foodiebay". In November 2010, Foodiebay was renamed as Zomato. Its parent company is Info Edge. It provides information and reviews on restaurants, including images of menus where the restaurant does not have its own website. Their mission is to ensure that nobody has a bad meal. They do it by helping people discover great places around them. Its team gathers information from every restaurant on a regular basis to ensure our data is fresh. Another factor is to build amazing experiences around dining. And lastly by enabling restaurants to create amazing experiences, to spend more time focusing on food itself, which translates directly to better dining experiences with dedicated engagement and management tools. Zomato was founded by Deepinder Goyal (IIT- Delhi Alumni) and Pankaj Chaddah (IIT- Delhi Alumni).

LITERATURE REVIEW

The online food ordering culture is booming in India, bringing variations in the way traditional restaurants worked. According to a recent sectoral report published by IBEF (Indian Brand Equity Foundation), food has been one of the largest segments in India’s retail sector, valued at $490 billion in 2013. The Indian food retail market is expected to reach Rs 61 lakh crore ($894.98 billion) by 2020. Owing to fierce competition and vast market, the space is coming up with a lot of innovation catering to customer convenience, satisfaction and retention. Swiggy and Zomato are among the top rated food apps. We take a closer look at the financials reported by these companies in FY 14- 15. Funds raised (millions) Above is a quick snapshot of the funds raised by various food ordering companies till date. Swiggy reported sales of Rs 7.41 lakh in the first year of operation and Rs 4. lakh as other income (income from non-business activities). Employee costs is the largest cost to the company at Rs125.62 lakh, which is 57 percent of the total cost of sales. Company is maintaining a high net worth at Rs 386.25 lakh, which gives it a bandwidth to take further exposure to debt, without weakening 2

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10 37 0 5 10 15 20 25 30 35 40 Series A Series B Series C Series D Swiggy Zomato

the leverage ratios. In line with the business model, debtors are minimal and payables stand at Rs 6.21 lakh. The company maintains a good cash reserve at Rs 345.14 lakh despite having a negative working capital gap. Thus, the working capital cycle looks sustainable, which is a positive indicator for a start- up business. It is too soon to comment on the overall financial performance of the company, without looking at the trend in FY 15-16. A growth in turnover and improvement in margins while maintaining the working capital cycle is definitely what we will be looking for. Zomato has been showing a growing trend in revenues and grew by 83 percent to Rs 7,883.57 lakh in FY 2014-15 from Rs 3,060.28 lakh in the previous year. This does not include the other income of Rs 1,614.66 lakh, which comprises interest from FD and current investment of Rs 139.18 lakh and gain on sale of current investments of Rs 1,468.34 lakh. The graph above shows revenues including other income. Cost of sales stood at Rs 16,049 lakh, exponentially higher than previous year at Rs 7,097.75 lakh. Major cost is employee cost, which stood at Rs 9,788.43 lakh, which was 61 percent of the total cost of sales. Major components of the other expenses, which stood at Rs 6,260.58 lakh, included rent expenses of Rs 990.55 lakh, Repairs to building of Rs 207.21 lakh, conveyance cost of Rs 1,105.50 lakh, and advertisement expenses of Rs 1,802.05 lakh. Losses of Rs 7185.54 Lakh were booked for the year. Reserves and surplus are at Rs 66,172.54 lakh, giving a sound financial cushion to the company. Short-term borrowings include Rs 2.

RESEARCH METHODOLOGY

I have used primary source of data for my research methodology. I have used questionnaires. They were distributed to 40 people of age 14 onwards divided into different age groups and their answers were recorded. The Questionnaire is enclosed in Annexure - 1. I have also done a SWOT analysis of Swiggy and Zomato.

ANALYSIS AND INTERPRETATION

ANALYSIS

This is an analysis of the answers from the questionnaire which are summarised below. Gender: Age group: It is observed that there were 20 males and 20 females who's answers were recorded in the questionnaire, out of which 12 people were in the age group 14- 20, 25 people were in the age group 21-29 and only 3 people were in the age group 30+.

Do you have the Zomato application downloaded? Only 64% of the target group has the Swiggy application downloaded and 77% of the group has the Zomato app downloaded, irrespective of whether it is their preferred delivery service or not. How did you get to know about your preferred delivery service? It is seen that 52% of the people got to know about their preferred delivery service via the Internet, 29% via friends or family and just 18% via advertisements on TV and hoardings.

How often do you order food online? We see that 35% people order food online monthly, 30% order weekly, 15% order every alternate week, 7% order daily while 10% don't order online at all. How do you prefer to order food? 81% of the people prefer ordering food online via mobile applications, 15% prefer ordering on call while the rest prefer ordering through websites.

Does Swiggy make timely deliveries? Does Zomato make timely deliveries? It is seen that 79% of the people claim that Swiggy makes timely deliveries while 21% don't. It is also seen that 66% of the people claim that Zomato makes timely deliveries while 34% don't. These opinions are irrespective of their preferred delivery choice. Have you ever faced any problems while using the Swiggy application or ordering via Swiggy?

Have you ever faced any problems while using the Zomato application or ordering via Zomato? 68% of the people have never faced any problems while using Swiggy or while ordering via Swiggy, while 32% have. 78% of the people have never faced any problems while using Zomato or while ordering via Zomato, while 22% have. On a scale of 1-5 how satisfied are you with your experience at Swiggy? On a scale of 1-5 how satisfied are you with your experience at Zomato?

INTERPRETATION

According to the analysis of the questionnaire, 40 people recorded their answers out of which 20 were male and 20 female. They were divided into age groups of 14 - 20, 21-29 and 30+. It is observed that almost 90% of the people who took part in the survey order food online, while just 10% don't. It shows us that in this new era of online food delivery, people are actively taking part in it. We also see that 45% of the people prefer Zomato while 42% prefer Swiggy. Just 13% prefer other companies. Thus we can see that Swiggy and Zomato are among the top choices of people. 64% of the target group have the Swiggy application downloaded, and 77% have Zomato downloaded. Many of them have both the applications downloaded, which shows that many of them use both Swiggy and Zomato. When questioned about how did they get to know about their preferred delivery service, it was seen that a majority of the people (52%) got to know about it via the Internet. 29% of the people got to know about it via friends and family and 18% via advertisements of TV and hoardings. Thus we can interpret that both the companies have to work more on their marketing skills to create more brand awareness via advertisements, be it on TV or radio or hoardings. They should also take out schemes so that the public is more inclined to use their apps. A little more marketing on the internet would also be beneficial for both, as the internet now is the most successful and easiest way to spread brand awareness. We see that 35% people order food online monthly, 30% order weekly, 15% order every alternate week, 7% order daily while 10% don't order online at all. 81% of the people prefer ordering food online via mobile applications, 15% prefer ordering on call while the rest prefer ordering through websites. So, a fair suggestion to both Swiggy and Zomato would be to offer more discounts or combo meals to increase their number of orders like 'buy one get one free', or 'get 15% off on minimum order price of Rs 150' and other similar schemes. Another way to increase the number of orders would be to offer discounts only while ordering via the application, so that their app number of downloads is increased and people are inclined to order more.

61% of the target group are of the opinion that Zomato is more expensive than Swiggy, while 39% believe the opposite. 54% of the target group are of the opinion that Zomato is both more user-friendly and serves better quality of food than Swiggy, while the rest 46% opine the same about Swiggy. Here we see that Swiggy beats Zomato in pricing. But, it also seen that a majority of the people believe that the Zomato application is more user-friendly and it serves better quality food. Thus it can be safely said that Swiggy should give more emphasis on taking public feedback about its application and work on improving their app via surveys, online forms or questionnaires. Swiggy should also work on improving their packaging. It is seen that 79% of the people claim that Swiggy makes timely deliveries while 21% don't. It is also seen that 66% of the people claim that Zomato makes timely deliveries while 34% don't. These opinions are irrespective of their preferred delivery choice. Swiggy is well known for its own fleet delivery men who are trained to deliver food on time. However we see a very small percentage claiming that Swiggy doesn't always deliver food on time. Zomato should too focus on delivering food in a timely manner. 68% of the people have never faced any problems while using Swiggy or while ordering via Swiggy, while 32% have. 78% of the people have never faced any problems while using Zomato or while ordering via Zomato, while 22% have. Thus Swiggy and Zomato both should focus on removing the problems and kinks and give emphasis on using newer technologies to make their respective applications better. In the next question we have asked the public about their overall experience and asked them to rate it from 1-5. Where, 1 - Very bad. 2 - Bad 3 - Satisfactory 4 - Good 5 - Very good. According to the ratings, a majority of the people (36%) rate their experience with Swiggy a 4, which is 'good'. 21% rate Swiggy a 5, which is 'very good'. 16% rate their experience a 3, which is 'satisfactory'. While the rest equally divide their votes between a 1 and 2, which is 'very bad' and 'bad' respectively.