Zomato vs DoorDash: Homegrown Food Delivery Platform Performs Better Than US Major
In a surprising turn of events, India’s very own Zomato has outperformed the United States-based food delivery giant, DoorDash, in terms of revenue growth. Analysis from Elara Securities reveals that while DoorDash experienced a 27% year-on-year (YoY) increase in revenue, reaching $2.3bn in the fourth quarter of the fiscal year 2023, Zomato saw a more substantial growth of 29.4% YoY, with its adjusted revenue climbing to ₹20.3 billion in the same period.
Furthermore, Zomato also led in gross order value (GOV) growth with a 27% increase, surpassing DoorDash’s 22% YoY growth. The growth in DoorDash’s GOV and revenue has been attributed to a significant 23% YoY increase in total orders, an expansion of its customer base to 37 million, improvements in average order frequency, and enhanced advertisement revenue.
Looking ahead, DoorDash has outlined aggressive investment plans for the coming year, with a particular focus on new verticals like grocery delivery and expanding into global markets. Both companies share a strategic goal of developing a loyal customer base and achieving sustainable growth. Essential to this strategy is the acquisition of repeat customers through subscription programs—DashPass and Zomato GOLD—which aim to lower customer acquisition costs while simultaneously improving margins and overall profitability.
Moreover, the report highlights both platforms’ efforts to boost monthly active users, increase order frequency, and raise the average order value (AOV). DoorDash has seen improvements in profitability across its various business verticals, with a notable 31.2 percent increase in revenue YoY in 2023. Its adjusted EBITDA as a percentage of GOV also rose by 115 basis points YoY to 1.8%. Meanwhile, Zomato’s contribution margin saw a significant boost, increasing by 200 basis points YoY to 7.1% in the fourth quarter of the fiscal year 2024.
In the burgeoning grocery delivery sector, DoorDash has made notable strides by partnering with 0.1 million grocery stores across North America over the past three years. Similarly, Zomato’s grocery delivery service, Blinkit, has experienced impressive growth with a 103% increase in GOV YoY in the third quarter of the fiscal year 2024, buoyed by a 74.1% rise in the number of transacting customers and a 14.8% increase in AOV during the same period.
As for future growth prospects, DoorDash anticipates its GOV will reach $76 billion, marking a 13.8% YoY growth, with an expected adjusted EBITDA margin expanding by 150 basis points YoY to 2.2% in 2024. Conversely, Zomato projects a 50% growth in its topline over the next few years with the adjusted EBITDA margin of its food delivery business aiming to hit 5% during the same timeframe, as per the insights from the Elara Securities report.
Despite DoorDash boasting a substantial market capitalisation of $46.20 billion as a NASDAQ-listed entity, Zomato’s market value stands at $16.84 billion, reflecting the burgeoning potential of homegrown platforms in competing on the global stage. This performance comparison not only highlights the competitive dynamics of the food delivery industry but also sheds light on the robust growth and resilience of regional players like Zomato in the face of international competition.
