Happy Tuesday! With user growth stagnating, Zomato and Swiggy are prodding existing customers to order more. This and more in today’s ETtech Morning Dispatch. Also in the letter: ■ Myntra CEO Nandita Sinha interview ■ ETtech Done Deals ■ Nykaa’s new independent director Food delivery companies lean on existing users for growth Online food delivery platforms Zomato and Swiggy are trying to increase order frequency among their existing customer base to offset a drop in the number of new users.
Driving the news: A senior Zomato executive said the company is focusing on pushing order frequencies, instead of targeting the “more expensive” new customer acquisition. In fiscal 2024, Zomato’s average monthly transacting user base grew 8% on year, half of that seen in the previous year. While Swiggy’s numbers are not public, analysts said the IPO-bound company has also witnessed a similar rate of slowdown in user growth.
Tell me more: Erosion in margins from discounts and free deliveries under the Zomato Gold subscription programme is being offset by increase in advertising revenue and platform fees that the company levies, the executive added. Both Zomato and Swiggy levy a platform fee of Rs 5 per order on food delivery users. Luring new customers: Over the last few quarters, Zomato has introduced a multitude of new features and use-cases for food delivery.
These include the company’s recent controversial vegetarian-only mode, larger orders, healthy ordering option.
