Food delivery majors Zomato and Swiggy both reported their earnings for the fiscal year 2021, with both companies reporting a net reduction in their losses. Food delivery companies have been criticised by many as loss-driving ventures with narrow margins and even global names in the segment like DoorDash and UberEats continue to operate without making any profits.

But as these companies begin to consolidate their hold over the food delivery ecosystem, smaller discounts, the number of food orders and other factors are leading to an increase in revenue.

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Zomato

Zomato’s filings revealed that the company’s consolidated net loss reduced to Rs 67 crore in Q4FY21, a reduction from Rs 352.6 crore in the same quarter last year. The company’s revenue from operations jumped to Rs 1,112 crore, an increase of 82.47 percent year-on-year. However, Zomato’s narrower loss margin was attributed to the sale of its Rs 315.8-crore stake in sports platform Fitso.

Gross order value (GOV), the total value of all food deliveries, including delivery charges and taxes but excluding discounts and tips, increased by 84.5 percent YoY and 1.7 percent QoQ. Though at the same time, average order value declined by 3 percent QoQ. The total number of orders also saw a huge jump by 93 percent YoY and 5 percent QoQ.

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“We are very bullish on the product-market fit, unit economics, as well as the growth trajectory of the quick commerce category. It reminds us of the food delivery category a few years ago when many platforms competed over a large and growing market but ultimately only the few who delivered exceptional experience to their customers survived," Deepinder Goyal, Founder and Chief Executive of Zomato, said in a statement.

Despite the encouraging numbers, investors remained unimpressed, as Zomato shares were down by 5.98 percent over the past day.

Also read: App-based gig workers' earnings declined in 2021: Report

Swiggy

Swiggy’s consolidated losses shrunk to Rs 1,616 crore, a reduction of nearly 59 percent for the financial year ending March 2021, according to regulatory filings, reported ET. However, the company’s consolidated revenue from operations took a beating as it dropped 26.6 percent year-on-year to Rs 2,547 crore.

Also read: Swiggy raises $700 million led by Invesco, turns decacorn

(Edited by : Shoma Bhattacharjee)