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Is Zomato outshining DoorDash? Homegrown food delivery platform surpasses US major
Indian food delivery platform Zomato has outperformed its US-based counterpart DoorDash, defying expectations in the competitive arena of food delivery services.
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Indian food delivery leader, Zomato, outperforms US giant DoorDash in revenue growth
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Both platforms emphasize customer loyalty, but Zomato's agility in the Indian market sets it apart
The food delivery market in India has grown dramatically in recent years, accelerated by the COVID-19 pandemic, which has kept people indoors. According to Statista, the online food delivery market in India is expected to generate USD 43.78 billion in revenue by 2024, indicating the sector's strong growth as per livemint.
Interestingly, amidst this growth, Indian food delivery platform Zomato has outperformed its US-based counterpart DoorDash, defying expectations in the competitive food delivery services market.
Revenue growth: Zomato takes the lead
Elara Securities' data reveals some compelling statistics. Zomato's adjusted revenue increased by 29.4% year on year to ₹20.3 billion in Q4 CY23, surpassing DoorDash's 27% YoY growth to USD 2.3 billion. This performance demonstrates Zomato's dominance in the Indian market, where it has thrived despite fierce competition.
DoorDash and Zomato are strategically aligned in their efforts to build a loyal customer base and foster long-term growth. The brokerage firm's report emphasizes their shared focus on acquiring repeat customers through subscription programs like DashPass and Zomato GOLD. These initiatives are designed to reduce customer acquisition costs while increasing margins and overall profitability.
Financial performance: A closer look
While DoorDash's profitability has improved across all business verticals, with revenue up 31.2% YoY in CY23, Zomato's contribution margin increased impressively by 200 basis points YoY to 7.1% in Q4FY24. Despite DoorDash's higher market capitalization of USD 46.20 billion versus Zomato's USD 16.84 billion, the latter has shown resilience and agility in the fiercely competitive food delivery landscape. 
Looking ahead, DoorDash expects its gross order value (GOV) to reach USD 76 billion, with adjusted EBITDA margins expected to increase by 150 basis points YoY to 2.2% in CY24.
In contrast, Zomato anticipates a robust topline growth of 50% over the next few years, with the food delivery business's adjusted EBITDA margin expected to reach 5% during the same period. These projections demonstrate both companies' confidence in their future prospects and strategies for continued growth and profitability.
Zomato's outstanding performance against its US-based counterpart DoorDash in terms of revenue growth, strategic emphasis on customer loyalty, and financial resilience demonstrates its strength and dominance in the Indian food delivery market. Despite being a homegrown platform, Zomato has proven its mettle against global behemoths, indicating a bright future for the Indian tech ecosystem and its ability to compete on a global scale in the field of food delivery services.
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