Zomato and Swiggy Shares Plunge Amid Intensifying Quick-Commerce Competition
Key Points:
* Zomato Ltd. (ZOMATO.BO) and Swiggy Ltd. (SWIGGY.BO) shares significantly declined on Tuesday.
* Zomato reported a 57% quarterly profit drop and warned of further losses in its sub-10-minute delivery business.
* Swiggy's shares fell by a record 8% due to the disappointing Zomato earnings.
* Rapid commerce companies have intensified competition in categories beyond daily essentials, including electronics and apparel.
* Zomato's Blinkit unit and competitors Swiggy and Zepto have increased delivery store openings, eroding margins.
* Analyst Nathan Naidu predicts a prolonged path to break-even for the quick commerce segment.
* Zomato's shares have fallen over 20% this year, despite a previous surge.
* The company remains committed to 20% annual growth in its food delivery business but forecasts challenges in the near term.