Bengaluru: Swiggy Ltd and Eternal Ltd—India's two listed food delivery companies—acknowledge that the next phase of growth will hinge on adding new users rather than driving higher order frequency among existing customers. However, their latest shareholder letters reveal sharply divergent strategies to achieve this.
Swiggy is banking on affordability through its dedicated, standalone meals app Toing to attract price-sensitive consumers, using its existing restaurant and delivery ecosystem. Zomato's parent Eternal, however, emphasises that lower-priced meals cannot be sustained by simply reducing commissions and delivery fees. Instead, it is investing in Bistro by Blinkit, a separate vertically integrated food business that redesigns kitchen operations and supply chains to prepare low-priced meals.
The divergence comes even as both companies continue to report steady growth in their core food delivery businesses. Swiggy’s food delivery gross order value (GOV), or the total value of orders placed, rose 17.4% to ₹9,490 crore in the June quarter. Zomato’s net order value (NOV), which excludes customer discounts and certain charges, grew more than 20% to ₹10,769 crore, its fourth straight quarter of accelerating growth.
Swiggy’s food delivery business served an average 19.2 million monthly transacting users during the quarter, compared with Zomato's 27 million, indicating that both companies are now looking for incremental growth.
This underscores a broader shift in how India’s food delivery leaders are thinking about expansion. Rather than repositioning their flagship apps around cheaper meals, both have opted to build separate propositions aimed at new consumption occasions while preserving the positioning of their core brands.
This comes as competition in food delivery intensifies. Rapido has entered the market with its zero-commission platform Ownly in Bengaluru, while Flipkart is preparing its own launch later this year. Meanwhile, Swish raised $38 million in funding from Hara Global and Bain Capital Ventures to expand its kitchen setup in March this year.
At 11:24 am on Monday, Swiggy shares were trading flat at ₹285.55 on the BSE, while Eternal rose 1.5% to ₹307.
Contrasting playbooks
Swiggy has positioned Toing as a vehicle to expand the food delivery market rather than merely redistribute existing demand. The company said in its June quarter shareholders’ letter that two out of every three new Toing users are either new to Swiggy or previously dormant customers, while restaurants are already seeing meaningful incremental volumes from the platform. It has expanded Toing to about 50 cities and said the app runs on Swiggy’s existing logistics network, limiting the need for significant incremental infrastructure.
“We have been able to launch Toing without any significant incremental fixed costs (unlike new competition who will have to build the entire stack from the ground up) by leveraging our existing tech and execution capabilities. The initial investment in Toing is largely on new user acquisition, which is discretionary in nature and can be quickly scaled or cut-back depending on the progress,” Swiggy said in its letter.
The Bengaluru-based company has also been careful to distinguish Toing from Bolt, its quick-preparation food offering sitting in the main Swiggy app. While Bolt is designed around speed and convenience for existing users, Toing operates as a separate app focused on lower-priced meals and attracting more value-conscious consumers.
The affordability push also follows Swiggy’s decision earlier this year to shut down Snacc, its standalone 15-minute food delivery app, after finding the rapid-delivery model difficult to scale profitably.
Eternal, however, believes affordability alone is not enough. Responding to investor questions on Toing and Rapido-backed Ownly, founder Deepinder Goyal said such platforms have had limited impact so far because they rely on lower commissions and delivery fees to offer cheaper prices without fundamentally changing how food is produced or delivered.
“What we are spending energy on is Bistro—which is our answer to the question these platforms are pretending to solve. If you want to make food delivery work at ₹50-150 price points, you can’t do it without supply chain innovation,” Goyal wrote in the shareholder letter.
Unlike Toing, Bistro is built around company-operated kitchens, specialised equipment and standardised workflows intended to improve efficiency at lower price points. Eternal has described it as a different segment and a “genuinely new market” rather than an extension of its existing marketplace business.
The growth debate
For analysts, the contrasting strategies reflect a broader shift in the food delivery market. With customer acquisition becoming more expensive and ordering frequency among existing households stabilising, platforms are increasingly looking for new ways to bring consumers back rather than relying on discounts alone.
“It’s not that food delivery isn’t growing, 20% year-on-year growth is still healthy. The challenge now is figuring out what’s new that gets customers to order more,” said Satish Meena, advisor at research firm Datum Intelligence.
According to Meena, Swiggy and Eternal are attempting to solve the same problem through different business models. Swiggy is trying to make restaurant food more affordable within its existing marketplace, while Eternal is attempting to lower the cost of preparing food itself through vertically integrated kitchens.
“On the looks of it, it looks like Zomato is trying to do something different which can be sustained in the long term,” he said, adding that it still remains too early to determine which model will prevail because both still need to demonstrate they can scale profitably.