Zomato and Swiggy's IPL Impact: Meager 7% Growth in Food-Delivery Business, Says Report
Zomato and Swiggy's IPL Impact: Meager 7% Growth in Food-Delivery Business, Says Report

A recent report from consulting firm Redseer revealed that online food-delivery companies witnessed a moderate 7% growth in their business during the recently concluded Indian Premier League (IPL) 2023.

The growth was attributed to their cautious approach towards marketing campaigns and advertisements, resulting in limited expenditure.

Due to the focus on attaining profitability, online food delivery platforms such as Zomato and Swiggy reduced their marketing expenditures during the latest edition of the IPL, according to the report.

This approach aligns with the overall trend among consumer internet companies to prioritize cost efficiency and profitability over aggressive marketing strategies.

According to the Redseer report, instead of relying on extravagant and attention-grabbing advertisements, food delivery companies adopted subtle and understated strategies, leading to a 7% increase in their business.

The report highlights the effectiveness of these more subdued approaches in driving growth for these platforms during the IPL.

Kushal Bhatnagar, an associate partner at Redseer Strategy Consultants, highlighted the shift in approach by online food delivery giants during the IPL seasons from 2017 to 2020.

During this period, these companies made a significant presence on prime-time television with attention-grabbing advertisements and offered attractive discounts of 50% to 60% at various restaurants, resulting in a more than 50% surge in business during the IPL 2020 season.

However, in the IPL 2023 season, there was a noticeable change in strategy and approach.

In previous seasons, food-delivery platforms effectively collaborated with over-the-top (OTT) platforms and developed tailored advertisements to maximize their impact.

This integration, along with customized marketing campaigns, played a significant role in driving the increase in business during those seasons.

In the IPL 2023 season, JioCinema, owned by Viacom18, served as the digital broadcaster for the tournament, whereas Disney Hotstar held the broadcasting rights for previous editions of the IPL.

As per the report, food delivery companies experienced consistent growth in their business from 2018 to 2020, with the percentage increasing from 43% to 52% during this period.

However, a significant decline occurred in 2020 when the IPL was postponed due to the Covid-19 pandemic.

Despite a slight recovery in 2021 and 2022 with growth rates of 6% and 7% respectively, the figures are still far below the levels observed before the pandemic.

Additionally, food delivery witnessed a growth of nearly 2.5 times among customers residing in tier-2 cities and beyond, in comparison to more established markets.

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