INDIA – Food delivery startup Swiggy has seen an upward swing in revenue, recorded at US$60.2 million compared to US$18.1 million last year, reflecting its continued geographic expansion in the country.
Total expenses more than doubled to US$117.8 million as compared to US$47.7 million last year while operational revenue saw significant growth, according to ET Retail.
However, the firm recorded an increase in expenses attributed to its expansion strategy to more cities and efforts to widen its fleet to 90,000 delivery executives.
Employee expenses rose 113% to US$25.9 million, advertising and promotional expenses increased almost three times to US$20.9 million while it incurred an expense of US$3.54 million toward discounting in FY18, compared with US$1.49 million last year.
“In FY18, we remained focused on delivering exceptional value to our users, while making significant investments for the future and improving our operational efficiencies as we start hitting scale.
This has resulted in the operating revenue increase outpacing the cost increase, further strengthening our leadership position as India’s largest food ordering and delivery platform.
We will continue to double down on this growth as we expand to more cities and experiment with innovative ways to bring more convenience to the lives of consumers,” said a spokesperson for Swiggy.
During the period, Swiggy embarked on discounting to boost volumes and sales against rivals such as Zomato.
Swiggy’s current monthly discounts and incentives are pegged at over US$16 million, while Zomato spends about US$17-18 million per month.
Zomato reported US$63.5 million in revenues in the year 2018, driven by food delivery, advertising and subscription-based Gold businesses.
It claimed to have reached market leadership in India’s food delivery landscape in September, having hit the 21 million monthly order run rate.
Swiggy expanded its operations to 12 cities from 7 in March 2017, doubling its volume in the last four months alone.
The firm is looking to expand its delivery services across the entire hyperlocal delivery market starting with a pilot program in Delhi-NCR, Bengaluru and Mumbai by November this year.
It diversified into delivering medicine and grocery to boost volumes on its platform.
Such developments are expected to grow its business to about 15-20% of their revenues over the next two years.
It plans to make significant investments in its cloud kitchen business by expanding to up to 40 cities over the next 2 years.
Swiggy ended September with more than 21 million orders, according to the company.