Swiggy vs Zomato: A Business Case Study on Tech, Strategy & Profitability!
Have you ever craved biryani at midnight, opened your favorite food delivery app, and placed an order with just a few taps? It seems so simple from the customer’s perspective, but behind the scenes, these platforms operate as highly complex, high-performance systems.
Swiggy and Zomato are the two dominant food delivery platforms in India. While they may look similar on the surface, their technical architectures and strategic decisions set them apart in how they scale, manage costs, and drive profitability. But here’s the surprising part—Zomato is more profitable than Swiggy, even though Swiggy has a superior tech architecture.
How does that happen? Let’s break it down.
The Fundamental Architectural Difference: Multi-Tenant vs. Modular Monolith
Swiggy’s Multi-Tenant Super App
Swiggy is a super app, meaning it integrates multiple services within a single platform, including:
- Food delivery
- Instamart (grocery delivery)
- Swiggy Genie (parcel delivery)
Swiggy follows a multi-tenant system, meaning all these services share a common backend infrastructure. This allows for cross-service efficiencies, such as:
- Lower customer acquisition costs (a user acquired for food delivery is also a potential grocery or parcel customer)
- Easier feature adoption (new services can be added without requiring new app downloads)
- Operational cost savings (shared backend resources reduce infrastructure costs)
Zomato’s Modular Monolithic Architecture
In contrast, Zomato follows a modular monolithic model, where:
- Food delivery is a separate standalone application.
- Blinkit (quick commerce) is a different app.
- District is another independent vertical.
This means Zomato lacks the cross-service efficiencies of Swiggy but benefits from better logical isolation, lower service complexity, and easier financial tracking across its different verticals.
Breaking Down Business Success: The Issue Tree Approach
At the core of every company’s success is profitability, which comes down to:
Profitability=Revenue−Cost
Swiggy and Zomato have different approaches to maximizing revenue and minimizing costs. Let’s analyse how their technical architecture impacts their business performance.
Revenue Side: How Technology Influences Orders & AOV
1. Number of Orders
Revenue is largely driven by order volume. More orders = higher revenue.
- Swiggy: Uses AI-driven recommendations, real-time load balancing, and dynamic pricing to enhance the user experience, increasing repeat customers.
- Zomato: Leverages strong brand positioning and Zomato Gold/Pro memberships to encourage repeat usage.
Zomato’s first-mover advantage (launched in 2008 vs. Swiggy in 2014) also means stronger customer loyalty.
2. Average Order Value (AOV)
AOV = Number of Items per Order × Item Price
While platforms can’t control item pricing (restaurants set those), they can influence the number of items per order through cross-selling and upselling.
- Swiggy’s Advantage:
- Zomato’s Challenge:
However, Zomato’s subscription-based discounts (Zomato Gold/Pro) encourage users to spend more per order, balancing out Swiggy’s AI-driven cross-selling advantage.
Cost Side: How Technology Reduces or Increases Expenses
1. Marketing & Customer Acquisition Costs (CAC)
Swiggy benefits from a lower CAC due to its multi-tenant system. Once a user is acquired, they can be monetized across Instamart, Genie, and food delivery. Zomato, however, has to market its different services separately, increasing CAC.
2. Infrastructure & Operational Costs
- Swiggy: Uses microservices architecture (400+ microservices), Kubernetes-based auto-scaling, and AI-driven load balancing to optimize infrastructure usage.
- Zomato: Relies more on horizontal scaling (adding more servers as traffic increases) rather than microservices-based independent scaling.
This makes Swiggy more technically scalable, but it also means higher engineering and maintenance costs compared to Zomato’s simpler architecture.
3. Delivery & Supply Chain Costs
- Zomato: Uses a traditional point-to-point delivery model—one rider picks up from a restaurant and delivers to the customer.
- Swiggy: Uses an AI-optimized hub-and-spoke model & delivery fission, where:
Swiggy’s delivery system is more cost-efficient, but it requires high coordination and AI optimization.
So Why is Zomato More Profitable?
Despite Swiggy’s tech superiority, Zomato is winning in market share and profitability due to:
- First-mover advantage & brand trust – Launched in 2008, it had a head start in building customer loyalty.
- Faster expansion into Tier-2 & Tier-3 cities – Zomato operates in 750+ cities vs. Swiggy’s 580+ cities.
- More aggressive business acquisitions – Acquired Blinkit instead of building a quick-commerce arm from scratch.
- Better financial discipline – As a public company, Zomato had to prioritize profitability, while Swiggy, still VC-backed, focused on growth.
- Consumer behaviour – Indian consumers prefer specialized apps over super apps, making Zomato’s standalone model more aligned with local habits.
Swiggy’s technical architecture is more advanced, but Zomato’s market strategy, financial discipline, and understanding of consumer behaviour have given it the edge in profitability and market share.
This case study proves a critical business lesson—superior technology alone doesn’t guarantee success; business strategy, financial decisions, and market positioning matter just as much.