Earning from Impressions, Not Orders: The Real Economics of Food Delivery Apps

Mansee Mohta
Oct 7
3 min read

Zomato (Eternal): In FY2024–25 Zomato’s parent (Eternal) reported ~₹20,243 Cr in total revenue[1]. Its core food-delivery business (orders, delivery fees and commissions) accounted for roughly ₹9,418 Cr (Adjusted)[2]. Advertising income (from promoted restaurant listings, banners, etc.) is not broken out in public filings, but industry reports estimate that ads contribute on the order of 15–20% of total revenue for food-delivery platforms[3]. By this estimate Zomato’s ad-driven revenue in FY25 would be a few thousand crore rupees (e.g. if 20% of ₹20,243 Cr, about ₹4,000 Cr). (The balance of Zomato’s revenue comes from other lines like its B2B Hyperpure supplies and quick-commerce business.)

Swiggy: Swiggy’s FY2024–25 revenue from operations was about ₹15,227 Cr[4]. As with Zomato, the majority of this comes from its core food-delivery and quick-commerce commissions and fees. Independent estimates similarly put advertising income at roughly 15–20% of total platform revenue[3]. (For scale, Swiggy’s Q1 FY2026 food-delivery GOV was ~₹8,086 Cr[5], of which the commission/take-rate is the main revenue; ads are a smaller but growing slice.) In short, both companies earn most of their revenue from delivery commissions/fees, with advertising making up a significant but minority share (in the mid‐teens percent range)[3].

Metric	Zomato (FY25)	Swiggy (FY25)
Total Revenue (from operations)	~₹20,243 Cr[1]	~₹15,227 Cr[4]
Approx. Advertising share of rev.	~15–20%[3]	~15–20%[3]
Food-Delivery Revenue (Adjusted)	₹9,418 Cr[2] (47% of total)	(not separately disclosed)
Ad Revenue Profit Margin	~90–95% of ad rev to profit[6]	~90–95%[6]

Ad Revenue Contribution and Trends

Both Zomato and Swiggy plan to increase the role of advertising in their businesses. Swiggy explicitly stated in its IPO documents that it will “increase the contribution of advertising revenue further by enhancing our advertising tools”[7]. Likewise, company executives note that ads on the platform grow faster than order volume – Zomato management has commented that “revenue from advertising is growing faster than [food] gross order value”[8]. Recent industry reporting confirms this trend: ads accounted for about 10–12% of revenue in early 2024 and have since climbed into the 15–20% range[3]. In practical terms, this means advertising is a material driver of profitability: industry insiders note that ad revenues carry very high margins (roughly 90–95% flows to the bottom line)[6]. Swiggy’s own Q4 FY2025 shareholder letter also highlights that an increase in advertising income was a key factor in the profitability of its “Out-of-Home” segment[9]. In summary, while neither company is yet majority‐advertising, a growing fraction of current and future revenue is expected to come from ads and promotions as they beef up their ad platforms[3][7].

AI and Personalization in Ad Platforms

Both firms leverage advanced data/AI techniques to power their ad offerings.

Zomato has publicly described using machine learning to improve ad relevance. For example, 1its engineering blog explains that promoted restaurants are ranked by an AI-powered Learn‑to‑Rank model that incorporates customer preferences (cuisine, price, past behaviour, etc.) to personalize which ads users see[10][11]. Zomato also ran AI-generated, highly personalized ad campaigns (e.g. tailoring IPL-themed video ads for each restaurant)[12]. The goal is clear: using AI/ML for targeting and ranking increases click-throughs and thus ad monetization.

Zomato deploys XGBoost LambdaMART models via Butterfly API Gateway using MLflow registry on Kubernetes.

Swiggy likewise builds data-driven ad systems. While the company publishes fewer details, it has noted that its ad recommendation engine uses contextual multi-armed bandit algorithms (a form of online machine learning) to select and rank promotions for each user. Industry analysts note that “platforms have been investing in technologies for advertising to be more effective for brands”[13], implying that Swiggy’s tech (like Zomato’s) includes ML for targeting, pricing and personalization. (Swiggy’s tech blog “Swiggy Bytes” features articles on contextual-bandit approaches to ads, though we lack a citable excerpt here.) In all cases, these AI efforts let each company charge higher prices or get higher ROI on ads by better matching ads to customers. That, in turn, boosts ad revenue and its contribution to profit – ads are highly profitable (notably higher-margin than delivery fees)[6], so better AI targeting directly improves monetization.