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September 22, 2025
Christina Moniz, Financial Express
22 September 2025
It is already the largest player among organised fumiture makers with over 15% of the market. With 1,000 stores, it has the widest retail store footprint among organised players. The 102-year-old brand is also the second-largest revenue con-tributor to the parent enterprise.
So why is Interio tinkering with its name, logo and colour attributes?
“We want to move away from being viewed as a functional brand to more of a design-led lifestyle one. We have a wider range of offerings that are more modular and aesthetic,” says Reshu Saraf, head of marketing communications at Interio by Godrej.
As a first step, it has a new logo and name change – from Godrej Interio to Interio by Godrej. The brand has earmarked ₹50 crore towards an integrated campaign across TV, digital, outdoor and in-store branding to promote its new proposition over the next year. Overall, it will invest ₹300 crore in expansion and technology with the goal to more than double revenues to ₹10,000 crore by FY29.
Younger consumers don’t see furniture as utility but as lifestyle, observes Puneet Pandey, strategy head and managing partner, OPEN Strategy & Design. “By moving from ‘solid and sturdy’ to ‘stylish and aesthetic’, the brand earns the right to play at higher price points as well. Design-led positioning will also unlock repeat purchase since people no longer wait a decade to change their furniture based on utility; they want constant upgrades to refresh their living spaces as their tastes evolve,” he notes, adding that Interio needs to make the marketing leap from “catalogue to culture”.
Saraf says the brand is also building differentiation with its customer experience. “We’re using digital tools for store walkthroughs and visualisers to help visualise our products in the home. Our product portfolio, which is deeply personalised ane tailored for Indian sensibilities, it is a major differentiator that few other brands offer,” she points out.
E-commerce is also a focus area with the brand looking to increase the revenue share from 15% to 20-22% by 2029. The company is leveraging Al to improve the search functionand sharpen personalisation. Saraf adds the that offline too, the brand will have large format experience centres to help people envision what their rooms could look like, along with mid-size and small-format stores.
Interio also plans to widen its retail store footprint from 1,000 to 1,500 by 2029.
As per industry estimates, the Indian furniture market is set to grow at 11% annually to reach $64.1 billion by 2032 from $30.6 billion in 2025. It is this growth momentum that Interio is looking to cash in on.
Built-in differentiation
Although a significant chunk of Interio’s business comes from its home remodelling services, within the furniture category, it competes with global players like IKEA and digital-first brands like Pepperfry. The challenge for Interio in this market is to embed the design-led positioning in its productsandcus-tomer experience, says Nisha Sam-path, managing partner at Bright Angles Consulting.
One of its biggest advantages is the Godrej brand. “The Godrej brand stands for many values prized in interiors such as quality, trust, reliability and durability with a ‘Made in India’ tag. However, the brand has not been so successful in building an image of cutting-edge design and innovation. These are new values that can make the brand more contemporary,” she remarks.
Devangshu Dutta, CEO of Third Eyesight concurs, pointing out aside from nimble competition, Interio’s key challenges also come from the dual pressures of increasing consumer expectations for rapid delivery and customisation on the one hand, with aggressive price competition on the other.
(Published in Financial Express – Brandwagon)
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August 6, 2025
Naini Thaker, Forbes India
Aug 06, 2025
It’s a known fact that of the thousands of startups founded each year, only a small fraction survive—and even fewer scale to become unicorns. Rarer still are those unicorns which, after reaching dizzying heights, come crashing down. The Good Glamm Group is one such cautionary tale.
Once celebrated as a unicorn that cracked the code on content-to-commerce, the company’s meteoric rise was matched only by the speed of its unravelling. At the heart of its downfall lies a critical misstep: The relentless pursuit of growth through acquisitions and brand launches, even as cracks in its house-of-brands model began to show. Instead of pausing to consolidate and build sustainably, Good Glamm doubled down—prioritising valuation over viability.
That strategy came to a head on July 23 when founder and CEO Darpan Sanghvi announced the dissolution of the group’s house-of-brands structure. In a LinkedIn post, Sanghvi confirmed that lenders would now oversee the sale of individual brands, effectively ending the company’s vision of building a digital-first FMCG conglomerate.
Despite raising $30 million in 2024 and undergoing multiple rounds of restructuring, the group failed to integrate its acquisitions or generate sustainable profitability. With key investors such as Accel and Bessemer Venture Partners exiting the board and leadership turnover accelerating, the company’s ambitious empire—built on rapid expansion and aggressive brand aggregation—has now been reduced to a lender-led breakup.
In the aftermath of the announcement, Sanghvi offered a candid reflection on what went wrong. “In hindsight, it wasn’t one decision, one market force, or one acquisition. It was three levers we pulled, which together, turned Momentum into a Trap,” he wrote in a LinkedIn post. According to Sanghvi, the group’s downfall stemmed from doing “too much, too fast and too big”.
He elaborated: “At first, Momentum feels like your greatest ally. Every headline, every funding round, every big launch is a shot of adrenaline. And you start believing you can do more and more and more. But momentum has a dark side. If you stop steering and go in a hundred different directions, it doesn’t just carry you forward, it drags you faster and faster until you can’t breathe.”
Where The Model Broke?
In October 2017, Sanghvi launched direct-to-consumer (DTC) beauty brand MyGlamm. Most brands at the time were big on selling on marketplaces such as Amazon or Nykaa. However, Sanghvi believed, “We wanted to be truly DTC and not just digitally enabled. We believed that to own the customer, the transaction needs to happen on our own platform.”
But the biggest challenge with being a DTC brand is its customer acquisition cost (CAC). Towards the end of 2019, the company was spending about $15 (over ₹1,000) to acquire a customer to transact on their website. “Around the same time, our revenue run rate was ₹100 crore. We were spending about $0.5 million to acquire 30,000 customers a month. That’s when we realised it was time to solve the CAC problem,” Sanghvi told Forbes India in 2022. In an attempt to find a solution, Sanghvi turned to the content-to-commerce model.
And then, started the acquisition spree. According to Sanghvi, with a single brand in a single category one can’t build scale. He told Forbes India, “The most you can scale it is ₹1,000 crore, if you want a company that’s doing ₹8,000 or ₹10,000 crore in revenue, it has to be multiple brands across multiple categories.” In hindsight, this perspective might be debatable.
As Devangshu Dutta, founder of consultancy Third Eyesight, points out, the “house of brands” model is essentially a modern-day consumer-facing business conglomerate—and its success hinges on multiple factors working in harmony. While there are examples globally and in India of such models thriving, both privately and publicly, the reality is far more nuanced. “Brands take time to grow, and organisations take time to mature,” Dutta notes, emphasising that rapid aggregation of founder-led businesses under a single ownership umbrella is no guarantee of success.
In recent years, Dutta feels the influx of capital into early-stage startups and copycat models—often seen as lower risk due to their success in other geographies—has shortened business lifecycles and inflated expectations. The hope is that synergies across the portfolio will unlock outsized value, but that rarely plays out as planned. “It is well-documented that more than 70 percent of mergers and acquisitions fail,” he adds, citing reasons such as weak brand fundamentals, lack of synergy, inadequate capital, limited management bandwidth, and internal misalignment.
In the case of Good Glamm, these fault lines became increasingly visible as the group expanded faster than it could integrate or stabilise.
Scaling Without Steering
In FY21, the company had losses of ₹43.63 crore, which rose to ₹362.5 crore in FY22 and went up to ₹917 crore in FY23. Despite the mounting losses, Good Glamm marked its entry into the US market, in a joint venture with tennis player Serena Williams to launch a new brand—Wyn Beauty by Serena Williams. The launch was in partnership with US-based beauty retailer Ulta Beauty.
For its international expansion, it invested close to ₹250 crore over three years. “We anticipate that the international business will account for 25 to 35 percent of our total group revenues by the end of next year. This strategic focus on international expansion is pivotal as we prepare for our IPO in October 2025,” he told Forbes India in April 2024.
Clearly, things didn’t pan out as expected. As Sanghvi rightly points out, it was indeed a momentum trap. “You tell yourself you’ll fix the leaks after the next milestone. But the milestones keep coming, and so do the leaks. Soon, you’re running from fire to fire, never realising that the whole building is getting hotter. And somewhere along the way, you lose the stillness to think,” he writes on his LinkedIn post.
Dutta feels that a strong balance sheet is the most fundamental requirement, “to provide growth-funding for the acquisitions or for allowing the time needed for the acquisitions to mature into self-sustaining businesses over years. In the case of VC-funded businesses, the pressure to scale in a short time can go against what may be best for the business or for its individual brands”.
The Good Glamm Group’s fall is a reminder that scale alone doesn’t build resilience. Its story reflects the risks of expanding faster than a business can integrate, and of prioritising valuation over value. The house-of-brands model can work—but only when backed by strategic clarity, operational discipline, and patience. This is less a warning and more a reminder for founders: Scale is not success, and speed is not strategy.
(Published in Forbes India)
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July 16, 2025
Prabhanu Kumar Das, Medianama
16 July 2025
E-commerce logistics platform Shiprocket announced the launch of Shunya.ai, a sovereign AI model developed in India to support the country’s Micro, Small and Medium Enterprises (MSMEs), on July 11. The company claims that it is India’s first multimodal AI stack, built in partnership with US-based Ultrasafe Inc.
This announcement comes at the heels of Shiprocket filing a confidential draft red herring prospectus (DHRP) with the Securities and Exchange Board of India (SEBI) in May 2025 for their Initial Public Offering (IPO). The company is expected to raise around Rs 2500 crore in its IPO.
What does the AI model offer?
As per Shiprocket’s website, Shunya.ai is built on a freemium model, with unlimited access priced at Rs 499 a month for MSMEs. It is directly integrated into the Shiprocket platform and offers AI agents across multiple languages. According to the company, the agents can perform the following tasks:
Shiprocket CEO Saahil Goel stated, “We’ve adapted Shunya.ai from the ground up for Indian languages, commerce workflows, and MSME needs. By embedding it directly into our platform, we’re giving over 1,50,000 sellers instant access to tools that are intelligent, local, and scalable, levelling the playing field for businesses across Bharat.” Notably, Larsen and Toubro’s AI cloud arm, Cloudfiniti is reportedly providing the underlying GPU infrastructure, ensuring that all data processing and storage remains within India.
This AI model does offer multiple benefits but it will not level the playing field against big players, as per Devangshu Dutta who is the founder of specialist consulting firm, Third Eyesight.
“While Shunya AI can help small businesses compete better, it won’t completely level the playing field. Large companies still have greater organisational capacity and capability to respond to the insights offered, including more data and bigger budgets. The real benefit for small businesses is improving how they work and serve customers within their current markets, rather than suddenly competing with giants,” Dutta said.
The E-Commerce AI Pivot
This is not the first time that an Indian e-commerce platform has unveiled a B2B AI service through its existing platform. Zepto recently launched Zepto Atom in May 2025, a real-time tool that offers consumer brands available on the platform minute-level updates, PIN-code level performance maps, and Zepto GPT, a Natural Language Processing (NLP) assistant trained on internal data that brands can query about their stock keeping units (SKUs) and performance data.
Zomato and its e-commerce arm Blinkit have also been growing their AI capabilities. Analytics India Magazine previously reported that the company’s generative AI team has grown from 3 to 20 engineers in the time-span of a year. Zomato introduced a personalised AI food assistant for users, and also uses AI in its backend to optimise delivery times and improve consumer support. Blinkit also released the Recipe Rover AI in May 2023, an AI assistant for recipes.
Other companies like Swiggy with ‘What to Eat’ AI, Myntra’s MyFashionGPT AI shopping assistant, and Amazon’s Rufus have also adopted AI assistants on their platform as a tool for the consumer.
The issue of merchant stickiness
Dutta asserts that this shift means platforms like Zepto and Shiprocket are changing from being service providers to becoming data intelligence companies. They are generating, or are in the process of generating revenue through transactional data that flows through the company.
“While this can create better insights and automation for merchants on these platforms, it also could make the merchants more dependent on the platforms. Once a merchant builds its operations around a platform’s specific AI tools and insights, it becomes much harder to switch to a competitor – creating stronger merchant stickiness. We already see this in infrastructure and core services such as banking and financial services, enterprise cloud services, building management etc. and the same is likely to happen in AI-enabled process management”, he said.
Why this matters
As Shiprocket is preparing for an IPO, Shunya.ai becomes another means to generate revenue for the company. This app can extend Shiprocket’s reach to local physical stores and MSMEs, by offering them the opportunity to provide the same experiences and support to the consumer that larger retailers and e-commerce platforms do, while automating delivery automation, cataloguing, and customer support.
Furthermore, the launch of this model is also part of the larger trend of AI integration and automation, both within e-commerce platforms for their consumers and within the back-end for optimisation.
Competition in these sectors and merchant stickiness may also become an issue, as businesses hosted on these e-commerce services may become reliant on specific AI tools and their outputs.
Questions of data privacy are also important when it comes to service companies moving towards data intelligence: How do these AI models gather and use data? The consent of end-consumers in these B2B models, data storage, and security are all issues that need to be studied as e-commerce and retails pivots towards AI.
Some Unanswered Questions
MediaNama has reached out to Shiprocket with the following questions and will update the article when we receive a response.
(Published in Medianama)
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June 13, 2025
Hiral Goyal, The Morning Context
13 June 2025
Several smart, well-to-do Indians believe they have an opportunity to build a successful business by selling apparel to affluent people. Armed with this hypothesis and with venture capital in tow, these entrepreneurs are having a go at the market.
Some are building a business just around undergarments, for instance. Others are focusing on premium T-shirts. Or denim wear. There’s also ethnic wear. And work clothes. Even workout clothes. It would appear that every niche in the apparel market is being exploited by someone who believes they have a product that can disrupt the category and create a large, sustainable business.
Amid this sea of ventures, BlissClub stands out.
In only five years of operations, the Bengaluru-based startup has made a name for itself. By simply focusing on premium activewear for women. Now that’s a niche within a niche.
Founded by Minu Margeret in 2020, BlissClub’s story goes something like this. Drawing on her personal experience as a frisbee player, Margeret started BlissClub to address the needs of Indian women who struggled to find comfortable and functional activewear. With inclusive sizing and tiny details such as pockets and wide waistbands in leggings, the startup catered to Indian women with products that were specifically designed for them and their body types.
The idea clicked. Women were willing to experiment with BlissClub’s clothing and, on the back of its early success, the company has grown from zero to revenue of over Rs 85 crore as of 31 March 2024. The startup has also been able to raise capital from VC investors like Elevation Capital, Eight Roads Ventures and Alteria Capital, who’ve come on board hoping that Margeret is onto something. Just last month, the company raised Rs 45 crore (around $5.3 million) in a Series B funding round, a mix of debt and equity. This took its total fundraise to nearly $26 million (Rs 222 crore), according to Entrackr.
Except that’s all the good news there is. Five years in, it looks like BlissClub is at a crossroads. Its revenue growth has slowed-from 360% year-on-year in 2022-23 to just 27% in 2023-24-and its valuation remains flat at $67 million.
Already, women’s activewear as a category is far too niche. It doesn’t help that BlissClub now faces intense competition from legacy players like Page Industries (Jockey’s India licensee), Aditya Birla Group and French sporting goods retailer Decathlon as well as startups like HRX and Clovia. All of them are trying to grow their sales to keep up with the rapidly growing trend of casual attire, where product differentiation is now largely down to marketing. It is another matter altogether that these customers are price-conscious, and disposable income to spend on premium clothing is limited to a few million people in India.
That’s the reality of the market where BlissClub operates. “The greatest challenge for the new athleisure brands, apart from capital and internal execution discipline, is to maintain brand integrity rather than get sucked into price battles and discounting, which is a race to the bottom that only the businesses with large balance sheets can win,” says Devangshu Dutta, founder and chief executive of Third Eyesight, a management consulting firm focused on the retail and consumer goods industry.
Questions sent to Margeret did not elicit a response. But it’s important to ask, what should BlissClub do? It may have had a great start, but is that enough to scale? This is what we’ve set out to explore in this story.
Fighting the big guns
Almost every customer in India who’s out to buy activewear or athleisure-has enough well-known brands to choose from. There’s Jockey, Decathlon, Nike, Puma, Adidas, Asics and Skechers, to name a few. And there’s something for everyone at every possible price point.
So, what particular need is BlissClub trying to fulfill?
Margeret says she started the company because she could never find appropriate activewear in the Indian market. From BlissClub’s website about its origin story: “While some clothes were comfortable, they simply did not stretch enough. Those that did stretch, were too compressive.” With BlissClub, Margeret focused on inclusive sizes and comfortable fabric that was ideally suited to India’s hot climate.
But are inclusivity and quality enough when it comes to having a differentiating factor? Not really.
Nothing, for instance, would stop other brands from copying BlissClub’s designs or offering comparable quality to gain customers. Additionally, BlissClub risks losing customers to other brands if it fails to keep up with its promise of top-most quality products. Some customers have already taken to social media recently to share their grievances (here, here, here and here). Their most common complaint? The quality of BlissClub’s fabric has gone down and there’s a lot of pilling.
On top of this, there is unrelenting competition from legacy players, most of whom have been building their athleisure portfolio for sometime now. Take Page Industries, for example. The company launched its athleisure portfolio in 1995, but it only doubled down on making it a key growth pillar in 2014-15. Just a couple of years later, Aditya Birla Group entered the men’s athleisure business with Van Heusen in 2016 and later expanded into women’s wear as well. Both these brands were quick to identify the shifting fashion trend to casual wear and benefited handsomely when the category finally exploded during the COVID-19 pandemic-as people started working from home and focusing on their physical health. Here’s what Page Industries’ CEO Karthik Yathindra told Mint in 2022 about the company’s decision to focus on athleisure: “So, the timing worked out for us very well. Demand has also been healthy across innerwear for men and women, but athleisure really surged a lot more than what we had anticipated or planned for. I would say, we jumped a year or two in terms of demand with athleisure compared to pre-pandemic days. We literally doubled our business. Whereas, overall, as an organization, we clocked 37-38% jump in revenue in the last financial year.”
It is no surprise then that these companies are well positioned in terms of the distribution network and the range of choices they offer to take on the Indian athleisure market as compared to BlissClub and other small players. Page Industries, for example, has more than 111,000 multi-brand stores and 1,453 exclusive brand stores, besides its digital presence through its own website and third-party marketplaces. BlissClub, on the other hand, has largely been an online player, selling products through its own website or through marketplaces like Myntra and Amazon. At present, it runs 14 retail stores across nine cities.
That’s no small gap, and competition is only going to heat up. So, what options does BlissClub have?
Stretched thin
From where BlissClub stands today, there are only a few ways it can grow its top line. Mostly because the size of India’s athleisure market remains small; it’s even smaller for women. “Athleisure is a $15 billion market with a CAGR of 20%. Of this, women are -30-40%,” says Gaurav Verma, co-founder and head of consumer investments at venture capital fund Ortella Global Capital. This $5-billion market for women’s activewear becomes smaller if we take into account only the premium space. (We couldn’t independently verify this estimate as there are no reliable reports available.)
In a niche market like this, there’s limited room to scale. Unless you cut down prices, introduce more categories, start catering to all genders or open retail stores. Let’s look at each of these options.
First up, the prices. Any premium brand that cuts prices risks diluting itself. Now, BlissClub has been handing out discounts and buy-one-get-one offers more liberally than ever before. For example, its Ultimate Leggings the company’s bestselling product -is priced at Rs 2,299 and sold at Rs 1,399 after discount. But when you compare it with Decathlon or homegrown brands like Hrithik Roshan-backed HRX or Clovia, you’d find that BlissClub remains in the premium segment even after discounts. And while lowering prices further might help BlissClub gain more customers, its margins-already EBITDA-negative-will most likely suffer.
The second strategy is introducing more categories. This is something BlissClub seems to be interested in. The startup entered the innerwear category with sports bras. The latest additions have been swimwear and travel wear. But in these segments, BlissClub is yet to replicate the kind of success it saw with its flagship products-Ultimate Leggings and Ultimate Flare Pants.
There is a bigger problem here. When it comes to athleisure startups, says Verma, “there are growth concerns beyond the top 3-5 SKUs [stock keeping units) like leggings, tops.” He goes on to say, “Unless we see growth in [direct-to-consumer) on higher-priced SKUs like jackets, shoes and accessories, we will continue to see pressure on both top line and bottom line growth.”
To make matters worse for BlissClub, the new categories the company is venturing into are witnessing increased competition. Take innerwear, for example. Influencer Kusha Kapila recently announced her shapewear brand Underneat, backed by Fireside Ventures and Mamaearth co-founder Ghazal Alagh. Besides this, players like Jockey, Clovia and Van Heusen have also been fighting for market share.
The third option, then, is to enter the menswear category. Though a natural extension for any athleisure brand, it does not promise scale. Let’s look at Technosport for some perspective. The A91 Partners-backed company, which sells affordable activewear for men and women across categories, reported a revenue of Rs 382 crore (around $44.5 million) in 2023-24. But that is after 18 years of operations and catering to the mass market with a fairly well-established distribution in the offline channel.
An even bigger challenge for BlissClub here would be to shake off its identity as a brand for women. Take the case of Lululemon. When the Canadian activewear company entered the men’s business in 2014, the biggest concern was that the brand was popularized by women and it would be tough to convince male customers to buy its products. The breakthrough here was the company’s ABC pants-short for anti-ball crushing pants-which helped Lululemon acquire male customers. Still, Lululemon continues to struggle with its identity as a women’s brand. Its latest effort to fight this was by making seven-time Formula 1 champion Lewis Hamilton its brand ambassador.
Finally, there’s the option of opening physical stores to acquire more customers. A digital-first strategy, says Dutta, allows the newer niche brands to directly connect with their target customers and achieve a critical mass. However, to get greater scale, “they need to add offline presence as well,” he notes. “Offline stores are not just a mainstreaming opportunity but also a way to create a brand immersion experience for the consumers, which can strengthen the connect with their core consumer segment.”
However, considering that BlissClub is a premium brand, it only makes sense for the brand to open outlets in high-street markets. But this would entail some serious expenditure. After all, opening retail stores requires capital.
Raising capital, though, does not look like a tall order for BlissClub. Its most recent fundraise, which will be used towards growth and expansion, is a testament to that. Before that, the company had raised $15 million in its Series A round. The credit for this partly goes to Margeret and Vidit Aatrey’s connections in the VC ecosystem. Aatrey, Margeret’s husband, is Meesho’s co-founder and CEO (the e-commerce company itself has raised $1.61 billion in total funding.)
Thanks to the funds it has been able to raise, BlissClub has had a good run so far.
However, with competition brewing in this space, the company risks losing its edge and becoming one of many. To give credit where it’s due, BlissClub has done a great job at building brand equity in the Indian activewear market. To grow beyond where it is today, though, it will need to rethink its strategy.
Perhaps it already is. In the last year, BlissClub has entered into categories beyond activewear; this includes innerwear, swimwear and most recently, travel wear. At the same time, it is also opening retail stores across the country.
How BlissClub scales will leave cues not just for Margeret but everyone else who believes they can build a niche apparel company in India successfully.
(Published in The Morning Context)
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May 25, 2025
Gargi Sarkar, Inc42
25 May 2025
SUMMARY: Swiggy and Zomato are scaling back non-core bets such as 10-minute food delivery, private labels, and event logistics to sharpen focus on core businesses and improve profitability. Both companies are betting on platform fees and selective verticals like quick commerce and ticketing, but analysts warn that financial discipline, not endless expansion, is key to long-term sustainability. The foodtech duo is stuck in a balancing act of rationalising what works and doesn’t. However, going ahead, this rationalisation game is only going to get more pronounced as they will strive to shield their core bread and butter businesses
For foodtech giants Swiggy and Zomato (now Eternal), the last few years have been about engaging in a battle for expansion, so much so that it has become difficult to tell them apart.
From quick commerce and cloud kitchens to intercity food delivery and even selling tickets for events and concerts, the two companies appear to be aping each other’s every move to be everything everywhere all at once.
However, what began as a bold bet to dominate every possible vertical falling under the ambit of food, lifestyle and entertainment is now undergoing a major course correction.
For starters, both are reconsidering their blitzkrieg, and while at it, they are gracefully stepping away from non-core bets, diluting underperforming or experimental units to focus on core operations to drive profitability.
For context: Zomato, which once saw the future of food logistics in ultra-fast deliveries, gave up on its 15-minute food delivery service, Quick, four months after its launch in January. It has also pulled the plug on its home-made meal service, Zomato Everyday. Tailored for office-goers and budget-conscious consumers, the service was floated in January 2025.
Swiggy, too, has made similar retreats. It suspended Swiggy Genie, its courier and pick-up-and-drop service that had gained popularity during the pandemic. The company also gave up on its private label food business by entering a strategic agreement with Kouzina, a chain of virtual restaurants, granting it exclusive rights to operate Swiggy’s digital-first food brands.
So, what has triggered this metaphorical fission in strategy?
One possible reason could be the growing realisation that profitability hinges on diversifying smartly rather than untamed expansion.
A market analyst, who did not wish to be named, pointed out that the duo’s attempt to rule their customers’ wallets for everything from food to groceries and entertainment to lifestyle has been quite ambitious. “The course correction was overdue,” the analyst said.
He believes that foodtechs are now forced to burn the visceral fat in the form of non-core businesses because those have been slowing them down, also eating into the revenues of core businesses and impacting operational efficiencies.
“Moreover, the more the segments, the higher the chances of operational hiccups. Managing logistics, customer experience, and quality control across a wide array of verticals inevitably leads to fragmentation and strain on core operations,” he added.
State Of Eternal Affairs: Zomato’s Diversification Saga
Eternal’s push to transform Zomato into a broader lifestyle platform in 2024 was not only about ambition but also a strategic response to a slowing core business — food delivery, according to industry observers.
Also, a glance at the table below reveals how the company has seen a marginal QoQ increase in its monthly transacting users.
In terms of monthly transacting customers, Zomato’s food delivery growth began strong with a 6.84% QoQ jump in Q1, but momentum quickly slowed, and Q2 saw only a 1.97% sequential rise, followed by a slight decline of 0.97% in Q3. This dip signalled stagnation, and although Q4 showed a mild recovery (1.95%), overall FY25 growth of the company’s monthly transacting users (food delivery) was modest at just 2.96%
Interestingly, Eternal founder and CEO Deepinder Goyal, too, acknowledged a slowdown in the company’s food delivery business while announcing the company’s Q4 FY25 results. He said the slowdown was due to rising competition from quick commerce platforms and weak discretionary spending. Goyal added that services like Zepto Cafe, Swiggy Snacc, and Blinkit Bistro, too, were eating into demand for restaurant deliveries.
In terms of Zomato’s food delivery numbers, average monthly transacting numbers grew to 20.9 Mn in Q4 FY25 from 20.5 Mn in Q4 FY24. Net order value (NOV) growth also remained subdued at 14% YoY versus the 20% YoY growth guidance.
Hence, the company was under pressure to unlock new revenue streams. Blinkit’s success became the reference point, and the company started envisioning similar success stories with other verticals too, a former Zomato employee said.
This was when the company got engulfed in the wave of diversification, paving the path for Zomato’s yet another bold move (besides Blinkit) — the INR 2,078 Cr acquisition of Paytm’s movies and events ticketing business, Insider, in August last year.
The acquisition that was planned with the launch of the ‘District’ app meant but one thing — declaration of war against BookMyShow, the lone behemoth in the realm of the entertainment ticketing segment. Even the company knew the path wouldn’t be all rainbows and sunshine.
In its Q4 FY24 earnings call, the management acknowledged that while the gross order value (GOV) of the going-out vertical continues to grow at over 100% YoY, the business still operates at an adjusted EBITDA loss of -2 to -2.5% of net order value (NOV).
Besides, given that the transition of users from Paytm’s ticketing business and Zomato’s dining out platform to the District app requires sustained investment, the company doesn’t expect the business to turn profitable in the near term.
But Zomato expects losses to eventually see stability at current levels.
“However, even with plateauing losses, the company will have to keep spending on creating supply. This means: curating new event experiences, forging partnerships and acquiring new users for the District app… and all of this translates into one thing — prolonged burn,” the market analyst added.
Moving on, Zomato’s ambition to become a lifestyle super app didn’t just manifest into flashy verticals like events, entertainment, and ticketing — it also showed up in its renewed aggression in food delivery, the very space where it first made its name.
Therefore, Zomato began piloting a 15-minute food delivery service in select parts of Mumbai and Bengaluru early this year.
But the company now finds the initiative extremely difficult to operationalise as it has failed to generate incremental demand.
“Customers do not necessarily want food fast, they just want it reliably. A 10-minute turnaround without full control over the supply chain leads to poor customer experiences, operational stress, and negligible upside. Instead of delighting users, it makes the company vulnerable to inconsistent quality and frequent delays,” a Zomato insider added.
Satish Meena, the founder of Datum Intelligence, opined that without controlling the entire supply chain, delivering food items within 10 to 15 minutes cannot be a profitable proposition.
Swiggy’s U-Turns
In 2024, also the year of its public listing, Swiggy aggressively expanded its service offerings, launching several new verticals to diversify beyond its core food delivery business.
Among the most prominent launches was Bolt, a 10-minute food delivery platform. Initially launched in Bengaluru, Chennai and Mumbai, Bolt quickly expanded to over 400 cities, with over 40,000 restaurants, including KFC, McDonald’s and Starbucks.
To complement Bolt, Swiggy introduced Snacc, a separate app for instant delivery of snacks, beverages, and small meals within 15 minutes.
Continuing to diversify its portfolio, Swiggy launched Pyng, an AI-powered platform that bridges users with verified experts like yoga teachers or chartered accountants.
With this, Swiggy marked its entry into the on-demand services marketplace, making professional services easier to access.
Apart from these customer-facing services, Swiggy also entered events via Scenes and the B2B space with Assure, to keep pace with Zomato.
Interestingly, Swiggy, too, has begun consolidating its operations. The company has shut down Genie, its hyperlocal courier business, which competed with Porter, Borzo and Uber.
According to a competitor, sourcing delivery riders specifically for packages is a challenge, particularly in cities like Bengaluru. For Swiggy, which was already managing fleets for food delivery and quick commerce through Instamart, sustaining a separate rider network for Genie only added to the complexity.
In another such move, Swiggy exited its private label food business by transferring exclusive rights for its digital-first brands, including The Bowl Company and Homely, to cloud kitchen operator Kouzina.
Balance Sheet Blues
Imperative to highlight that the rollbacks by Zomato and Swiggy are rooted in the growing pressures on their respective balance sheets.
After diversifying at a breakneck speed, they are now faced with the hard realities of cost structures that don’t always align with revenue potential.
In Q4 FY25, Zomato and Swiggy both reported robust top-line growth. Zomato’s revenue surged to INR 5,833 Cr, largely buoyed by its three core pillars — the food delivery business (INR 1,739 crore), Blinkit’s quick commerce arm (INR 769 Cr), and Hyperpure, its B2B supply chain vertical, which posted a 99% YoY growth in revenue to INR 1,840 Cr.
However, despite the momentum, the company’s net profit declined sharply to INR 39 Cr in the quarter, largely thanks to ongoing investments in Blinkit and newer bets like the ‘District’ lifestyle app.
Meanwhile, Swiggy clocked INR 4,410 Cr in revenue in Q4, up 45% YoY, but saw its net loss nearly double to INR 1,081 Cr. The widening losses were fuelled by surging operational expenses.
“All of this explains the strategic pullbacks witnessed lately, Swiggy exiting Genie and private labels, Zomato pulling the plug on services like Quick and Legends. The rationalisation marks a reset, indicating that while growth via diversification was necessary, financial discipline and profitability are in the spotlight,” the market analyst said.
Platform Fee To The Rescue… But For How Long?
While it won’t be easy for Zomato and Swiggy to suddenly change course, the future of these two foodtech giants is all about heading towards a more focussed set of revenue streams driven by value rather than FOMO.
In the process, both foodtech giants appear to have struck gold with the platform fee, which has grown from just INR 2 in 2023 to INR 10 today.
But the real question is: Can rising platform fee help the duo neutralise the impact of aggressive expansion? Or is rationalisation the only way forward?
Devangshu Dutta, the founder of Third Eyesight, thinks otherwise. He believes that the companies will not stop looking for new revenue streams, even as they will continue to amputate the ones that offer little value.
“All of these companies have to look for growth, which is a given. If their existing businesses are not delivering the kind of growth they need to justify their stock price or valuation, then they have to look at new avenues.”
According to him, we are bound to see a flurry of experiments, trials of different services and new verticals as these companies attempt to expand their addressable markets.
At the end of the day, the foodtech duo is stuck in a balancing act of rationalising what works and doesn’t. However, going ahead, this rationalisation game is only going to get more pronounced as they will strive to shield their core bread and butter businesses.
[Edited by Shishir Parasher]
(Published in Inc42)
