Comparative Analysis of

Zomato Swiggy Basedon

Consumer Perception
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INTRODUCTION
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INTRODUCTION

Online food delivery system is the process of ordering food through the Internet. In India, online
food ordering is growing day by day. Usually a customer search for a favourite restaurant or type
of dish and choose from the available items. A wide variety of food makes the user buy online.
Online food ordering system, users can give orders at any place and pay cash on delivery. The
system deals with ordering, processing and delivering food products. It is a simple and convenient
way for customers to buy food online without having to go to any restaurant. It is the internet that
connects the restaurant or the food company and the customer. This system of online food delivery
is safe and it is the most popular method nowadays. This method is developed to help restaurants
to simplify their daily operational and managerial task as well as improve the dining experience of
customers and also helps restaurants develop healthy relationship with customers. The format of
home delivery or the takeaways has gained a lot more customers in locations such as malls, offices
and big-party orders for residential complexes. People missing breakfast on the way to work,
order-in. People, who desire a better choice of corporate lunch or party, order in too. Everyone
seems to be in awe of the online food order and delivery option for the convenience and
immediate source of food at home. Besides, the convenience of ordering groceries from your
mobile app or web browser has certainly taken away some market share from the trusted ‘Kirana’
or the mom-and-pop stores. India is the 6th largest grocery market in the world, but the organized
sector as run by some of the online businesses mentioned above makes up only 5-8% market share
of the grocery business. The vast majority is still owned by these local markets and mom-and-pop
stores. This has some obvious impacts on the brick-and-mortar formats of in-dining restaurants as
more people prefer to have restaurant-style cuisines right in the privacy of their homes or
workplaces, but the impact is not so much as it may appear to be. The fast food business in India is
only about 2 decades old and remains largely unorganized. Given the rate at which the organized
sector is rapidly growing, it is only a matter of time and a much larger chunk of global investments
before a really big impact is made on ongoing restaurant businesses that may not have a delivery-
focused format of their own.

In today's digital age, the food delivery industry has witnessed an unprecedented boom,
transforming the way people order food. Two prominent players that have revolutionized the food

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delivery landscape are Swiggy and Zomato. With their extensive reach, user-friendly platforms,
and enticing marketing strategies, Swiggy and Zomato have become the go-to choices for millions
of customers seeking convenient and delicious meals. This comparative study aims to delve into
the marketing strategies employed by both companies and analyze their effectiveness in capturing
and retaining customers.

The rapid growth of the food delivery industry has revolutionized the way people dine, providing
convenience and accessibility like never before. Swiggy and Zomato, two prominent players in
this market, have emerged as leaders, capturing a significant market share. Both companies
employ extensive marketing strategies to attract and retain customers, which makes studying their
marketing approaches essential for understanding their success.

The dramatic increase in the number of internet users in India along with a strong framework for
doing ease of business has eventually resulted in the emergence of new business sectors in the
country and therefore the focus of this paper will be on one such flourishing market inside the
Indian startup space i.e., the online food delivery business. Online food delivery is a service that
allows clients to order food online and have it delivered to their door. It involves technology that
helps restaurants to accept and manage online orders. While surfing the website from the comfort
of their own homes, Indian customers can choose from a vast choice of cuisines offered by various
eateries.

Online food delivery businesses have emerged as a result of urban consumers' evolving buying
habits (Chai and Yat, 2019). Due to the rise in the working population and the time-constrained
work-life culture in metro areas, the idea of food delivery is swiftly growing (Das and Ghose,
2019). In addition to this, the convenience the online food delivery businesses offer to their
customers is an important driving factor of growth for this industry as customers get all their food
delivered with a tap of a button within nearly 30 minutes.

The Indian online food delivery space is currently undergoing a revolution due to the heavy
investments that this industry has attracted in recent years. According to an article
(ResearchAndMarkets.Com, 2021), the Indian online food delivery industry will grow at a
stunning 28.94 per cent CAGR from 2020 to 2026, hitting a market size of US $21.41 billion in

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2026, up from US $4.66 billion in 2020. This staggering growth in the online food delivery space
in the coming years will transform the way this business is done currently and thus bring a lot of
innovations in the industry. With more investments in this field, there will be new players who
would want to enter this market space and thus it is important to understand the factors critical to
success in the Indian market.

In India, currently, there are only two online food delivery companies namely Zomato and Swiggy
which dominate 95% of the market. Although these companies fundamentally provide the same
service to their customers, their app services differ in terms of features offered and customer value
systems (Raina et al.,2019). These differences in terms of app services and customer value
systems become a deciding factor for the customers to choose either of the delivery services.
Therefore, the current companies need to understand the factors that are critical to success in the
Indian market and thus improve their services accordingly to offer a better customer experience.

Although there have been researches which have identified the factors critical for success in the
food delivery business and also have made a comparison between players like Zomato and
Swiggy. But, none of the previously done research has focussed on the Indian market as a whole
and therefore there is limited literature about the Indian market. This paper will identify the factors
that are essential while operating for players in the online food industry and then shortlist the
factors that are most important to an Indian customer and should be a focus of new businesses
entering the industry with less capital and manpower. In addition, the paper will also identify the
best player in this industry by comparing the two companies Zomato and Swiggy based on the
same set of factors. This comparison will be done from an Indian consumer perspective by asking
the opinion of different consumers belonging to different cities.

1.1 DETAILS OF THE ORGANISATIONS UNDER STUDY

ZOMATO is an online food delivery and restaurant discovery platform. It was founded in 2008
by Deepinder Goyal and Pankaj Chaddah. Originally launched as Foodiebay, it was later
rebranded to Zomato in 2010. Zomato provides a platform for users to search for restaurants,
browse menus, read reviews, and place food orders for delivery or pickup.

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Users can access Zomato through its website or mobile app, which is available on iOS and
Android devices. The platform operates in numerous countries around the world and has a vast
database of restaurants and food establishments.

Zomato offers various features to enhance the user experience, including filters to search for
specific cuisines, locations, or restaurant types. Users can also view photos, menus, ratings, and
reviews from other customers to help them make informed decisions about where to dine or order
food from.

In addition to its food delivery and restaurant discovery services, Zomato has expanded its
offerings to include table reservations, online ordering for groceries and other essentials, and even
Zomato Gold, a subscription-based program that provides exclusive discounts and offers at partner
restaurants.

Zomato has grown significantly over the years and has become one of the leading players in the
online food delivery industry. It has expanded its services through acquisitions and partnerships,
further strengthening its presence in different markets

SWIGGY is an online food ordering and delivery platform based in India. It allows users to order
food from a wide range of restaurants and delivers it to their doorstep. Swiggy was founded in
2014 and has since grown to become one of the leading food delivery platforms in India.

Using the Swiggy app or website, customers can browse through various restaurants in their
locality, explore menus, and place food orders. Swiggy offers a convenient and user-friendly
interface that allows customers to customize their orders, apply filters, and track their deliveries in
real time.

Swiggy partners with numerous restaurants, cafes, and eateries to offer a diverse range of cuisine
options to its customers. It operates in several cities across India and has a vast network of
delivery executives who ensure timely and efficient delivery of orders.

In addition to food delivery, Swiggy also offers other services such as Swiggy POP (curated
single-serve meals at affordable prices), Swiggy SUPER (a subscription program that offers free

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deliveries and other benefits), and Swiggy Daily (a subscription-based service for homestyle
meals).

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MARKET ANALYSIS OF SWIGGY

Market Presence:
Swiggy operates in the highly competitive online food delivery industry in India. It competes with
other major players like Zomato and Uber Eats as well as smaller regional players. Swiggy has
established a significant presence in several Indian cities and has been expanding its operations to
capture a larger market share.

Business Model:
Swiggy operates on an asset-light business model, acting as an intermediary between customers
and restaurants. It earns revenue through commissions charged to restaurants for every order
placed through the platform. In addition, Swiggy may charge delivery fees to customers

Competitive Landscape:
The online food delivery market in India is highly competitive, with multiple players vying for
market share. Swiggy faces tough competition from Zomato, which is its main rival. Other
competitors include Uber Eats , Foodpanda, and regional players like Dunzo and Box8. The
competition is driven by factors such as delivery speed, restaurant partnerships, customer
experience, and marketing efforts.

Market Growth and Opportunities:

The online food delivery market in India has witnessed significant growth in recent years, driven
by factors such as increasing smartphone penetration, convenience, and changing consumer
preferences. Swiggy has capitalized on this growth and expanded its operations to capture a larger
market share. The company has also ventured into new segments like grocery and essential
deliveries to diversify its revenue streams.

Challenges and Risks:

While there are growth opportunities, the online food delivery market also poses challenges and
risks for Swiggy. Some of the key challenges include maintaining profitability in a highly
competitive market, managing logistics and delivery operations efficiently, ensuring consistent
quality across a wide range of partner restaurants, and managing customer expectations regarding
delivery time and order accuracy.

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1.4 COMPARISON BETWEEN MARKET ANALYSIS OF SWIGGY &

ZOMATO

Market analysis involves studying the market dynamics, trends, and competition to understand
the potential opportunities and challenges for a company. Here's a comparison of the market
analysis for Swiggy and Zomato:

 Market Size and Growth:

Swiggy: Swiggy operates in the online food delivery market, which has experienced significant
growth in recent years. With a large customer base and a strong presence in major Indian cities,
Swiggy has captured a substantial share of the market.

Zomato: Zomato also operates in the online food delivery market and has been a key player
alongside Swiggy. It has a significant presence in major Indian cities and has expanded its
services to other countries as well. Zomato has been experiencing steady growth in terms of user
base and market reach.

 Competitive Landscape:
Swiggy: Swiggy faces intense competition in the online food delivery space. Apart from Zomato,
it competes with other players like Uber Eats, Foodpanda, and regional players. Swiggy has
focused on building a strong delivery network and technology-driven solutions to differentiate
itself from competitors.

Zomato: Zomato operates in a highly competitive market similar to Swiggy. It faces competition
from Swiggy, Uber Eats, and other local players. Zomato has positioned itself as a
comprehensive food discovery platform, which sets it apart from some of its competitors.

 User Base and Engagement:

Swiggy: Swiggy has a significant user base and a strong customer engagement model. It has
focused on providing a seamless user experience, quick deliveries, and a wide range of restaurant
options. Swiggy's loyalty program, Swiggy Super, has helped in retaining customers and driving
repeat orders.

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Zomato: Zomato also has a large user base and has built a strong community of food enthusiasts.
Its platform offers extensive restaurant listings, user reviews, and recommendations, which
enhances user engagement. Zomato's loyalty program, Zomato Pro, has been instrumental in
retaining customers and encouraging repeat orders.

 Expansion and Diversification:

Swiggy: Swiggy has expanded its services beyond food delivery. It has ventured into grocery
delivery (Swiggy Stores), medicine delivery (Swiggy Genie), and other hyperlocal services. This
diversification strategy allows Swiggy to tap into new market segments and increase its revenue
streams.

Zomato: Zomato has also expanded its services beyond food delivery. It has ventured into
grocery delivery, cloud kitchens, and dining-out experiences. Zomato's diversification strategy
aims to position itself as a comprehensive food services platform.

 Technology and Innovation:

Swiggy: Swiggy has heavily relied on technology to streamline its operations and enhance the
user experience. It has invested in developing its delivery fleet management system, AI-based
recommendations, and real-time order tracking features.

Zomato: Zomato has also leveraged technology to improve its platform. It has introduced
features like augmented reality (AR) menus, online table reservations, and chatbot-based
customer support to enhance the overall user experience.

1.5 RATIONALE

Zomato and Swiggy both have a collective market share of 95% in this sector, similar research
about comparative analysis of various food delivery companies based on consumer perspective
have been done for particular cities like Ludhiana, Pune and Rajkot. The results of these revealed
that Zomato was the leader in this market in the respective cities. To generalise the findings for a
larger population and determine whether Zomato continues to be the best for a wider range of
populations or not, I wanted to examine both Zomato and Swiggy in this study without limiting
the sample to a single city or state. Secondly, although there have been studies about determining
the essential factors to consumers in this industry, there is limited literature about this in India.

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Hence, my study will contribute to the literature by identifying the factors that are most crucial to
an Indian consumer while choosing a particular delivery service. This will help the upcoming
businesses to capture the market with less capital and manpower as they would be required to just
focus on these crucial factors in the beginning.

1.6 OBJECTIVES OF THE PROJECT

1. To determine the best company among Zomato & Swiggy in the Indian food delivery industry
through the 8 decision influencing factors from a customer standpoint.

2. To determine the most important decision-influencing factors for Indian Consumers when they
choose an online delivery service.

3 To determine whether there is any relationship between the degree of importance of these most
important factors and the type of city the customer belongs to.

1.7 STATEMENT OF PROBLEM

The Indian online food delivery business has been majorly dominated by two companies Zomato
and Swiggy. This oligopoly in the industry leaves the customers with limited options to choose
from and thus are forced to avail the services of only the two available businesses. In addition, this
domination by only two companies also reduces the number of innovations in the industry, thus
once again affecting consumer choice. Therefore, to battle this, the food delivery business space
needs more competitors who can give tough competition to the existing two companies and thus
offer customers choices and innovations. With this paper, we aim to take a step to provide a
solution to this problem by conducting a comparative analysis of the current two market leaders
through the 8 decision-influencing factors from a consumer point of view and determine the best
company in the space. This will help companies such as Zomato & Swiggy to know about the
areas among the 8 factors where the customer feels they lack and thus improve upon those. In
addition to this, I will also highlight the factors that Indian Consumers regard as most important in
influencing their decision to choose a particular service. This information will serve the upcoming
businesses in the online food delivery industry as they will know exactly what to focus on when
they start. Since new businesses often don't have the capital and manpower to focus on everything,

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my findings will help them target a few factors to focus on and thus create a mark for themselves
by capturing the market while also keeping the customers satisfied. Lastly, I will also check
whether the degree of importance of these most important factors identified changes with the types
of the city the consumer resides in.

1.6 SCOPE OF THE STUDY

The scope of this study is that it will be limited to the sample age group of 18-60 and would be
distributed to people via email and other social media platforms. The total number of responses
targeted is just 147 from varied cities thus limiting the representation from each city. The factors
that have been chosen to put to test are the 8 decision influencing factors that are discussed in the
paper. The factors chosen are not an exhaustive list, however, the paper will continue with these 8
as they are very common and among the essential ones that have also been used in other research
papers outside India. The study focuses mainly on the businesses not having their food preparation
process or product but provides delivery services of food from restaurants to homes and offices
according to customers’ choice such as Zomato and Swiggy

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CHAPTER 2
LITERATURE REVIEW

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