Zomato vs Swiggy: Pretty packaging on Rotten food?

“Suno, don’t work on an empty stomach na?” vs “Order from us and get 50% off!”
No, it is not about being treated right by a perfect imaginary boyfriend. And no, it is not about food at half its price. The first one seems more like a personal message from a courter and the second one is the usual beg-to-buy notification, and you know as well as I do, which of these is going to make us click.
The secret to this seduction lies in the copy. 

Don’t tell our copywriter we told you this, but she uses Zomato’s copy for inspiration and competes with them parallelly. The first copy, obviously, is of Zomato and the second of Swiggy. While both these brands together hold 90-95% of the market share, they both compete with each other for a 44% vs 43% market share; Swiggy taking the lead here. Who would have thought? If Zomato’s copy is better, why is Swiggy leading the market? This is not going how you thought it would, is it?

A copy is an art of selling through written words. Writing a good copy is what Zomato does. It uses the right words, spiced up with a few emotions and targetted at the right time, and finally garnished with a touch of sass, for example:

Why is Swiggy leading, then?

Who is Where?

Both Zomato and Swiggy are food aggregators. Swiggy has a market valuation of US$ 3.3 billion, whereas Zomato is valued at US$ 3 billion. Food delivery, after all, is a number’s game. With an average delivery order of Rs. 500 or below, millions of food takeout parcels must be delivered before the food delivery companies can show both positive cash flow and profitability. After all, food tech companies make substantial technological investments and payments to their courier and restaurant partners.

Their marketing strategies are a combo of attractive discounts, using quirky, zany humour in their copywriting style to catch the customer's attention and connect with them. These apps bombard the customer with discounts. The most happening events, popular T.V. shows, and computer games easily prey on their copywriting team. After all, the food delivery business is a cutthroat world. With new apps and delivery companies springing up daily, they must do something to survive, even reinvent the wheel. 

After the national elections, this is what Zomato sent:

Food ordering itself has increased tremendously in the post-pandemic world. According to Rakuten Insight’s survey, 45% of the orders ranged between Rs. 200 to Rs. 400 per order, and more than 79% of the customers ordered food where the bill was more than ₹200. 

Zomato’s sales mix and marketing revenue streams

Zomato has multiple sources to earn its sales revenue, including advertising sales, ticket sales to events, delivery charges and commission, subscription programs like Zomato Gold and consulting. Swiggy also has similar revenue streams. It markets to both the B2B as well as the B2C segments.  

Key similarities and differences between Zomato’s and Swiggy’s marketing strategies

• Demographic: Both market to the key demographic with the age groups between 18-55 years
• Sales revenues: In 2020, Swiggy’s total revenue was INR 27.76 billion, and Zomato’s total revenue was INR 24.86 billion.
• Number of daily orders processed: Swiggy processes 1.5 million orders compared to Zomato’s 1.2 million per day.
• SEO Strategies: In SEO, Zomato uses restaurant names and phrases and links its advertising strategies to trending events. Swiggy’s SEO strategies involve more keywords such as food and online.
• Dominance on social media platforms:  Zomato prevails on Instagram, whereas Swiggy's favourite advertising ground is YouTube.
• Different brand positioning: Zomato’s shows follow restaurant ratings and reviews, whereas Swiggy positions itself as eco-friendly.
• Differing USP: Zomato has a much more comprehensive database, more significant users and more restaurants on their website. Zomato relies on restaurant logistics and third-party services. Swiggy, however, promises speedier delivery with their promise of delivery on time.
• User Interface: Swiggy users find their U.I. interface easy to use in terms of usability of content, accessibility of restaurants and search fields.

Content selling vs Content marketing

 Zomato’s graphic designer Akshar Pathak is a household name in the food delivery industry for their zany, slap-stick humour. He and his colleagues Pranav Sapra and Vivek Chaudhary also trend on social media for their smashing puns. Some of their samples are shown below:

Swiggy also has been revamping its brand strategy and is producing creative content. Using relatability and twisted humour is a hallmark of Swiggy’s new brand strategy.

After all, it is a battle for a billion rupee market. Moreover, everything is fair in love, war and food, and these companies use all the digital marketing tools in their arsenal. Brand, social media, and influencer marketing are all taken to their outer limits to the extent that even webpages like Social Samosa and Mad Over Marketing mention them in their feed.

Even after all this, Zomato’s market share went from 72% in January 2019 to 41% in December 2021, with Swiggy holding the rest 59% of it. Where did it all go wrong, Zomato bro?

Rotten tomato(s) on Zomato

Zomato is like the hare in the food delivery race, flamboyant, overt and supremely confident of being super-fast and engaging. Swiggy is more like the tortoise, a plodding, slow, and uninteresting player to watch in the race. Alas, the hare, along with being fast and over-confident, is also super lazy and decides that the race is already in his pocket and takes a nap. You already know what happens next!

Here is how the hare lost the game:

The Takeover of Blinkit

Zomato’s acquisition of Blinkit, the instant grocery delivery app, will likely give it indigestion.😂
The business model for the grocery delivery business is expensive and has to compete against the friendly neighbourhood Kirana store, which also promises home delivery and credit facilities. The cost of products ordered through instant delivery is also high compared to the perceived advantage. Instant delivery apps like Instamart and Blinkit are viewed as a marketing gimmick with the biked riders riding dangerously to meet the deadline. After UberEats, whether Blinkit will be another disastrous acquisition for Zomato remains to be seen.

Management Misconduct:  

Deep discounting, favouritism and monopolistic trade practices have created rifts between food delivery apps and restaurants. Zomato started the Zomato Gold scheme, for which Deepinder Goyal has been accused of sourcing money from restaurant owners and changing the contract terms. Deepinder Goyal has been accused of altering the terms of the agreement that were unilaterally changed to his benefit and the detriment of the restaurant owners. Zomato Gold is a “Buy One Get One Free” offer at select participating restaurants. 

Zomato showcases such restaurants better on its platform, and restaurants use the service to increase footfall. Moreover, the startup has been unfairly using collated customer data to start their dark kitchens to serve thems. 

Rebranding the Zomato app as Eternal: 

There have been claims that Zomato would rename its company Eternal. These allegations have been refuted by Deepinder Goyal, who said that there were internal discussions to rebrand the different businesses under a common name but that, at this stage, it was a mere speculation.

Here is the whole story and how Zomato started!

Ahhh... Finish!

Due to their convenience and the Covid-19 pandemic, food delivery apps have changed how we eat. Eating out is usually an occasion to dress up and dine in style in the aesthetic ambience of a restaurant. Food delivery apps have made us bigger couch potatoes. We order food and eat in front of the OTT channels on T.V. The convenience of not cooking and taking a day off from the kitchen cannot be decried, but the old-world charm of eating in a restaurant “en famille”, celebrating has a charm of its own.

With two-member working families, ordering food over a delivery app like Zomato and Swiggy is now a part of our lifestyle. The relatively cheap cost of food ordered on these apps doesn’t pinch our pockets. It may take some time for Zomato and Swiggy to achieve sufficient mass for generating positive cash flows and turn their balance sheets to black. It cannot, however, be denied that they are here to stay. 

Also Read:

• Zomato IPO: Was it worth the hype?
• Swiggy IPO: Should you invest?