Food delivery companies lean on existing users for growth

economictimes.indiatimes.com:

Zomato and Swiggy working towards making existing customers order more frequently to drive growth.

In fiscal 2024, Zomato’s average monthly transacting user base grew 8% year-on-year to 18.4 million. The pace of growth was 16% in the previous fiscal year.

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While Swiggy’s numbers are not publicly available, analysts said the IPO-bound company has also witnessed a similar rate of slowdown in user growth.

In the first six months of 2023, Swiggy recorded 17% on-year growth in gross merchandise value (GMV) for food delivery, compared with 40% growth in the same period of 2022, as per data released by its largest investor, Prosus.

A senior Zomato executive said the company is focusing on pushing order frequencies, instead targeting the “more expensive” new customer acquisition.


“Growth in food delivery is primarily driven by either increasing average order value (AOV) or higher order frequency. Average order frequency is still two to three … there is still a long way to go in terms of addressable market but that’s a long-term play,” the executive said.

Over the last few quarters, Zomato has introduced a multitude of new features and use-cases for food delivery. These include the controversial vegetarian-only mode, larger orders, healthy ordering options,