Swiggy’s food delivery and quick commerce expansion drive strong growth in Q3 FY25

Swiggy Limited (NSE: SWIGGY / BSE: 544285), India‘s leading on-demand convenience platform, has reported strong financial performance for the third quarter (Q3) and nine months ended December 31, 2024. The company’s gross order value surged 38% year-over-year to INR 12,165 crore, reflecting continued food delivery growth and aggressive quick commerce expansion through its Instamart service. While the company continues to invest heavily in infrastructure and customer acquisition, it has managed to reduce its consolidated adjusted EBITDA loss by 2% year-over-year to INR 490 crore. However, the loss widened sequentially by INR 149 crore due to increased spending on dark store rollouts and marketing efforts in the highly competitive quick commerce space.

Swiggy’s ability to maintain high growth across multiple verticals demonstrates its strong market positioning in India’s rapidly evolving digital commerce landscape. With growing consumer adoption, innovations such as Bolt‘s 10-minute restaurant food delivery, and a strategic push into the grocery and essentials category, Swiggy is reinforcing its dominance in the on-demand economy.

What is driving Swiggy’s food delivery growth?

Swiggy’s food delivery growth remained one of the key highlights of its quarterly performance. The company recorded a 19.2% year-over-year increase in gross order value, reaching INR 7,436 crore. The segment’s adjusted EBITDA grew 63.7% quarter-over-quarter to INR 184 crore, improving its margin to 2.5% of gross order value, up from just 0.3% a year ago.

The growth in food delivery has been driven by an expanding user base, innovative service offerings, and improved restaurant partnerships. Swiggy’s monthly transacting users (MTUs) grew 25.3% year-over-year, reaching 17.8 million. Nearly one-third of Swiggy’s active users now engage with more than one service on the platform, highlighting the effectiveness of its cross-service ecosystem. The introduction of Bolt in October 2024 has significantly contributed to this momentum, with the 10-minute food delivery service already accounting for 9% of total food orders. The company’s continued focus on efficiency, speed, and an improved user experience has helped strengthen its position against competitors like Zomato, which continues to battle for market share in the highly competitive food delivery space.

How is Swiggy scaling its quick commerce expansion through Instamart?

Swiggy’s quick commerce expansion through Instamart continues to gain momentum, with gross order value soaring 88.1% year-over-year to INR 3,907 crore. The platform has witnessed strong demand for ultra-fast grocery and essential deliveries, driven by increased product variety, greater availability, and a rise in consumer preference for rapid delivery services. The average order value on Instamart grew 14% year-over-year to INR 534, reflecting higher-value purchases and deeper consumer engagement.

To support this expansion, Swiggy has been aggressively increasing its dark store network, adding 96 new active locations in Q3 alone—almost double the number added in the previous quarter. Instamart now operates in 84 cities, with the company aiming to scale its active dark store space to 4 million square feet by March 2025. However, the rapid growth of Instamart has led to short-term profitability challenges, with its contribution margin declining from -1.9% in Q2FY25 to -4.6% in Q3FY25. The increased investments in supply chain infrastructure, marketing, and user activation efforts have put temporary pressure on margins, but Swiggy remains committed to long-term profitability through economies of scale and operational efficiency.

What role does diversification play in Swiggy’s strategy?

Swiggy is actively diversifying beyond food delivery growth, expanding into adjacent segments to strengthen its business model. The out-of-home consumption segment has seen a 68% year-over-year increase in gross order value, reflecting growing demand for ready-to-eat meals and on-the-go food solutions. Swiggy Dineout, its restaurant reservations and discovery service, achieved break-even for the first time in December 2024, demonstrating the potential of its high-margin dining business.

To enhance customer retention and loyalty, Swiggy launched One BLCK, a premium tier of its Swiggy One subscription program, offering exclusive benefits to frequent users. Additionally, the company introduced Swiggy Scenes, an event-based restaurant reservation service that expands its presence in the lifestyle and entertainment space. These initiatives reflect Swiggy’s strategic shift toward a multi-service platform, offering a seamless ecosystem that integrates food delivery, grocery shopping, dining experiences, and premium memberships under one umbrella.

How does Swiggy compare to competitors like Zomato and Blinkit?

Swiggy’s quick commerce expansion faces intense competition, particularly from Zomato’s Blinkit and Reliance-backed JioMart. While Blinkit has maintained an early-mover advantage in ultra-fast grocery delivery, Swiggy Instamart’s aggressive expansion strategy, broader city coverage, and deep investment in infrastructure position it as a formidable competitor.

In food delivery, Swiggy continues to lead in gross order value, driven by service innovations such as Bolt, an expanded restaurant network, and a focus on high-quality user experiences. Zomato, however, remains a key competitor with its own set of growth strategies, particularly in quick commerce, where it has been increasing its focus on operational efficiency. Swiggy’s ability to leverage a multi-service approach—offering food delivery, quick commerce, and dining experiences—gives it a significant advantage over competitors that primarily operate in individual verticals.

What’s next for Swiggy?

Swiggy’s continued focus on food delivery growth and quick commerce expansion highlights its long-term vision of becoming the dominant player in India’s digital convenience economy. While it faces challenges in achieving profitability, its strategic investments in infrastructure, technology, and customer acquisition are expected to yield long-term gains.

One of the key challenges Swiggy must navigate is balancing growth with profitability. While its food delivery segment has seen margin improvements, quick commerce remains capital-intensive. Increased competition from Blinkit and JioMart will require Swiggy to maintain an edge through service differentiation and operational efficiency. Additionally, the evolving regulatory landscape in India could introduce new compliance requirements for food delivery and e-commerce platforms, further influencing Swiggy’s strategic direction.

Despite these challenges, Swiggy remains well-positioned for sustained growth. Its ability to innovate, expand its ecosystem, and tap into new consumer trends will continue to drive its leadership in the on-demand economy. With a strong emphasis on user experience, service expansion, and digital transformation, Swiggy is poised to maintain its momentum in 2025 and beyond.