The food delivery market in India has grown astronomically in the past few years. With the market becoming saturated with more and more players every year, companies are burning through resources to stay in the game. One of the key players, Swiggy has reported that it’s losses inflated to ₹2,363 crores (~$333 Million) in the financial year ending in March 2019.
On the revenues front, the company reported that their operating revenues almost tripled, clocking in at ₹1,128 crores, in their filings to the Ministry of Corporate Affairs.
Since it’s commemoration in August 2014, Swiggy has been burning through money for expansion. Last year, Swiggy reported an operating revenue of Rs 418 crores and losses of Rs 397 crores. Swiggy’s losses swelled up to more than 5 times, accounting up to Rs 2,363 crores in FY19. The company has been spending massive chunks of money to expand into new geographies and widen it’s base of operations. The food delivery platform is currently operating in 500 cities and processes 1.4 million orders everyday, according to an estimate.
Swiggy made it’s costs public as follows:
- Delivery costs- ₹1,593 crores.
- Salaries and wages- ₹423 crores.
- Marketing and advertising expenses- ₹778 crores.
- Cancellation expenses- ₹13 crores.
“FY 18-19 has been another strong year of execution for Swiggy as we continued to grow our dominant market leadership position. We saw a 4.2x increase in order volumes and a 2.7x increase in operating revenue despite a higher baseline, underscoring our ability to grow in a sustainable manner over the long-term. During the year, we made many strategic bets and investments in technology, brand, and supply creation that have been the drivers of category growth in Indian food delivery and will bear fruit in Swiggy’s vision,” the company said in a statement.
Swiggy is burning $40-50 million every month to compete with it’s main competitor Zomato. The two companies are competing for a multi billion Indian food delivery market, which also has several other players, including one floated by Uber. Swiggy and Zomato are both raising fresh funds and are in talks to mop up around $500-$600 million.
