Indian foodtech players have transitioned beyond simple food deliveries. From groceries to fast delivery of essentials, companies like Zomato and Swiggy
have evolved to cater to the growing demand for instant gratification in accessing everyday necessities.
Last year marked a significant milestone in Swiggy’s journey. Following the footsteps of its rival Zomato, which had gone public in July 2021, Swiggy made its long-anticipated market debut with a blockbuster $1.3 Bn IPO — one of the largest public listings by a new-age tech company in India.
While Swiggy remained loss-making according to its last financial statement, it achieved profitability in its core food delivery business on the back of measures such as the introduction of a platform fee.
In addition, the company also increased its focus on growth avenues such as Dineout and other revenue streams, to further solidify its position. Though Swiggy paused experimenting with new verticals before its IPO, the company has resumed diversifying after its listing.
In December 2024, the company expanded its Dineout vertical by introducing Swiggy Scenes, a new feature enabling users to book parties, events, and live music experiences at partner restaurants. This move also underpinned Swiggy’s intent to not only deliver convenience but also curate experiences, further strengthening its position as a comprehensive lifestyle platform.
However, what’s interesting is that Swiggy Scenes took shape after Zomato announced the launch of District, a dedicated app for the ‘going-out’ business, in July. The app was finally launched in November last year after Zomato completed the acquisition of Paytm Insider in August.
While Zomato launched District as a separate app, Scenes is currently available on the main Swiggy platform and is only limited to a few locations, including Bengaluru and Delhi.
Notably, Zomato’s District app allows users to book tickets and make reservations for dining, movies, sports, and live performances, Swiggy Scenes is right now only available for booking tickets for comedy shows, live music and events at Swiggy partner restaurants.
This raises many questions — Why has the company launched a feature when it still feels like a work in progress? Is Swiggy Scenes the byproduct of any kind of FOMO? And finally, how does Swiggy plan to capitalise on and scale this offering?
A Move To Protect Itself Against Zomato?
Speaking with Inc42, an analyst at a stock broking firm said that one of the simplest reasons for the rushed launch of Scenes could be to keep pace with Zomato.
According to the analyst, Swiggy is already under pressure from its competitors in other verticals and cannot afford to lose ground in yet another segment. From a market capitalisation and profitability perspective, Swiggy significantly lags behind Zomato, making this move even more desperate.
“It is not clear what Swiggy’s strategy is for Scenes. I don’t think it’s a competitor to the District app at this point. Zomato’s District is a fairly evolved business, especially after acquiring Insider, considering the number of events listed, the cities covered, and the types and scale of events featured. The difference is like chalk and cheese,” Shreyas Srinivasan, the former chief product officer of Paytm and founder of Insider.in said.
She added that how Swiggy is functioning right now feels like it is trying to protect itself from Zomato’s growing influence. “However, the company will have to do more than just showcase to its customers that it is on par with Zomato. For them to compete, they’ll need to expand their scope to include concerts, comedy shows, and more,” Srinivasan, who quit Paytm last year, said.
Echoing the sentiment, Nishant Kini, the founder of Bengaluru-based branding and events agency The Nishé & Co, said that Swiggy’s entry into the events segment has only been prompted by its rival Zomato but the loss-making Swiggy has played it smartly by avoiding the acquisition route, staying clear of any kind of additional strain on its cash flow.
Swiggy Needs To Play To Its Core Strengths
While industry experts are not quite confident about Swiggy making any dent of sorts in the short term with Scenes, they have also not denied its capability to create new opportunities in the segment, despite it being late to the party.
However, at a time when many experts see Swiggy getting innovative with pricing, striking lucrative partnership deals and entering unclaimed zones, Srinivasan does not see much room for expansion.
“If you look at the “going-out” segment, BookMyShow initially spearheaded it, focussing primarily on movies, followed by events. Paytm followed a similar approach by offering movies and events, directly competing with BookMyShow. Zomato expanded this concept with Dineout, bundling dining, movies, and events into a single offering, as they viewed dining as a significant category,” he said, adding that it’s hard to identify a category that Swiggy can leverage to fundamentally alter the “going-out” experience
However, he said, there still lie opportunities in creating a highly innovative membership programme, offering better access and competitive pricing — something Zomato hasn’t yet integrated across its offerings. Zomato’s apps for dining, movies, and events operate independently, with separate reward cycles and memberships.
According to Kini, Swiggy’s strength also lies in its loyal customer base, which would give it a significant advantage as it expands into the events space. While BookMyShow is an established player, there are several smaller event listing platforms that Swiggy could effectively compete with.
Swiggy’s strength lies in its rich database of existing customers and its ability to seamlessly integrate new offerings into its platform. This will help Swiggy tap into its existing user base and offer a unified experience, positioning itself as a convenient and comprehensive lifestyle platform.
For instance, when users log in to order food on Swiggy, a well-timed pop-up or notification about exclusive events and ticket sales could immediately capture attention, he added.
“Besides, Swiggy already has an established presence across A, B, and C-category towns in India. This presents a unique opportunity for curating events tailored to these segments. In A-category cities, events and live performances are already thriving, while B-category cities are seeing growth but primarily on a smaller scale compared to A-level cities. The potential for growth in C-category towns—neither fully urban nor rural—is significant,” Kini said.
If Swiggy can penetrate these areas effectively, it could unlock a wealth of opportunities in the events segment. To capitalise on this, Swiggy will have to focus more on expanding its offerings in B and C-category towns, where untapped demands await.
What’s Next For Swiggy?
While it is difficult to foresee how Swiggy Scenes will shape up going ahead, what’s definite is that the company will require a significant investment in its pursuance to fully establish itself in the realm of entertainment and “going-out” segments.
In addition, the company will have to spend time and resources to build a hefty pipeline of exclusive event rights as events and movies are often exclusive, unlike restaurants that can list across multiple platforms.
“Most major events are listed on just one platform, and large movie chains like PVR often have contracts with only one or two providers. Building a robust supply chain in this sector takes significant time and effort, which is likely why Zomato opted for an acquisition strategy over building from scratch,” he added.
However, the only grace is that customer acquisition cost is lower in this segment. The advantage of a category with exclusive supply is that the supply itself drives traffic. For instance, if someone wants to watch a specific show, they will go to whichever platform offers the tickets, regardless of whether it’s Zomato, Swiggy, or another competitor. In such cases, the priority isn’t about generating traffic first but about securing the supply, the former Paytm COO said.
All in all, Swiggy is currently on a diversification drive, and it is trying to achieve profitability by adding more revenue streams. Earlier this month, it entered the services marketplace with the launch of a new app, Pyng Professional, and introduced SNACC, an app focussed on delivering food within 15 minutes.
Imperative to mention that the foodtech major trimmed its consolidated net loss by 4.78% YoY to INR 625.53 Cr in the second quarter (Q2) of the financial year 2024-25 (FY25). Meanwhile, operating revenue zoomed 30% year-on-year (YoY) to INR 3,601.45 Cr during the quarter under review.
Its out-of-home business, which comprises exclusive events and experiences business Swiggy SteppinOut and restaurant reservations and booking platform Dineout, is close to achieving adjusted EBITDA profitability. Swiggy made INR 60 Cr in revenue from the Out of Home Consumption vertical in Q2 FY25, up 71% from INR 35 Cr in the year-ago period. Its loss declined 79% YoY to INR 9.26 Cr.
With prospects looking promising, it will be interesting to see whether Swiggy’s aggressive expansion succeeds or ends up joining Minis, the free no-code website builder platform, in the graveyard of forgotten ventures.
