The Big Fat Advertisement Cost of Swiggy & Zomato
The marketing cost/revenue ratio of both the companies is rising. This means that technically the product offering is still in the nascent stage of its life cycle. It could also mean that the deeper they penetrate into the market, the tougher it gets to raise the number of orders per day (concerning).
As per Unomer, Zomato's app is installed in 12% of all Indian smartphones while Swiggy's app is in 10% of the smartphones. (This in itself is evidence enough to show that the majority of the market is still untapped.
Zomato’s marketing cost and the ratio shot up significantly in 2018 as it raised significant money in the year, most probably with the objective of blitz scaling and also because it entered the last mile delivery segment in the same year.
Swiggy’s ratio is significantly lesser also because as per Data Labs, it enjoys the most positive brand sentiment of consumers vis-à-vis its peers.
This article is a part of the July'20 edition of our Startup Newsletter. Here's the complete publication: