Swiggy’s ad spend surges by 28% in FY23

Food delivery platform Swiggy India has posted a Rs 2,560 crore jump in its operating revenue for the fiscal ended March 2023. It registered Rs 8,265 crore revenue from operations for FY’23, which is 45% up as compared to Rs 5,705 crores during FY’22. 

However, the company’s loss also widened during FY’23. It went up from Rs 3,629 crores in the last fiscal to Rs 4,179 crore during FY’23, registering a 15% jump in net loss, according to regulatory filing sourced from Tofler.

The total expenses of the company stood at Rs 12,884 crore during FY’23, which was 34% higher than the last fiscal year. The key categories for these expenses were purchases of stock in trade and advertising expenses. Swiggy’s ad spends went up by approximately 28% during FY’23, where it stood at Rs 2,362 crore. In FY’22, the company’s advertising expenses were Rs 1,849 crore. 

The Group generates revenue mainly from providing online platform services to partner merchants (including restaurant merchant, grocery merchants and delivery partners), advertisement services, sale of food and traded goods, subscriptions and other platform services.  

Swiggy’s advertisement revenue is generated from the sponsored listing fees paid by partner merchants and brands. The filing noted that advertisement revenue is recognized when a consumer engages with the sponsored listing based on the number of clicks.  

There are certain contracts, where, in addition to the clicks, the Group sells online advertisements which are usually run over a contracted time. Revenue is presented on a gross basis in the amount billed to partner merchants as the Group controls the advertisement space. 

It provides various types of discounts to consumers to promote the transactions on the platform and the amount of discount in excess of the income earned from the transacting consumers is recorded as Advertising and marketing expenses.