 "Quick commerce")
Swiggy’s food delivery business grew 17 per cent to deliver a gross merchandise value (GMV) of $1.43 billion in the first half of Financial Year 2023-24 (H1 FY24), said Prosus, the company’s largest investor, on Wednesday.
Swiggy was helped by a rise in transacting users that drove double-digit order growth and inflation in average order value, said Prosus in its annual financial report. The Netherlands-listed international assets arm of South African group Naspers has a 32.7 per cent stake in Swiggy.
Swiggy was behind Gurugram-based rival, Zomato, which reported a GMV of around $1.84 billion in H1 FY24 in its financial results.
Swiggy’s GMV growth “remains strong” at 28 per cent as its operating metrics are improving. The food delivery platform’s trading loss reduced to $208 million in H1 FY24, compared to $321 million in the same period a year ago.
“Core food-delivery EBITDA losses in 1H24 shrunk 89 per cent, led by improvements in contribution margin and operating leverage. In combination, this reflects customer willingness to pay for convenience and restaurant willingness to advertise for growth,” said Prosus, referring to earnings before interest, taxes, depreciation and amortisation.
Instamart, Swiggy’s quick commerce business in 25 Indian cities, made “rapid strides” as customers drove growth in orders. “Basket sizes grew well ahead of inflation. Instamart’s store count ended June 2023 19 per cent higher, contributing to its GMV growth of 63 per cent.”
Instamart’s losses in H1 FY24 fell by 75 per cent as it gained scale and improved profitability. “Broader product selection, densification of the store network and faster delivery times have continued to aid customer acquisition and retention,” said Prosus.
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Sriharsha Majety, chief executive officer of Swiggy, said earlier this year the food delivery business had turned profitable in the March quarter, after considering corporate costs and excluding employee stock options.
In October, US-based fund manager Invesco marked up the valuation of the Bengaluru-based firm to $7.85 billion, (about Rs 65,000 crore), after slashing it twice in four months in 2023, becoming the second investor to do so this year. This was an almost 43 per cent mark-up from the $5.5 billion valuation that Invesco had given to the platform as of July 31.
In August, US-headquartered asset management firm Baron Capital had also marked up the food aggregator’s valuation by 33.9 per cent to $8.54 billion.
Meanwhile, Zomato posted its maiden profits of Rs 2 crore in Q1 FY24. The company has since reported its second consecutive quarter of consolidated profit after tax at Rs 36 crore in Q2 FY24.
