The food delivery market in India generates an estimated revenue of 8,167 Million USD per annum. Zomato and Swiggy are the two key players within this space, along with others like Foodpanda and Uber Eats operating within the same. In 2018, Zomato claimed it received an average of 21 Million delivery orders per month. The company also claimed that it was the market leader in this space. However, according to the RedSeer FoodTech Leadership Index for the 4th quarter of 2018, Swiggy topped the charts with a score of 96. Zomato, on the other hand, had a score of 82.
With the competition being so cut-throat, Swiggy has created an edge for itself by expanding into hyperlocal deliveries too. This vertical will be called Swiggy Store. This will certainly boost their revenue by significant margins!
What kinds of deliveries is Swiggy Store offering?
Currently, Swiggy has declared that it will operate across 9 categories within the hyperlocal deliveries space. These categories include Kirana, vegetables, paan, florists, pet care, baby care, meat, gourmet foods, and health supplements.
Apart from teaming up with local stores, Swiggy has also partnered with known brands. Customers can order items from Ferns and Petals, Licious, Guardian Pharmacy, Apollo Pharmacy, MomsCo, Le Marche, and more. This helps it tie in the ecosystem of local, non-food related deliveries quite well. The brand is also claiming that they will be able to facilitate deliveries under the hour.
What about existing hyper local delivery platforms?
Hyper local deliveries is not a new idea and there have been a few platforms operating within the same. Google Backed Dunzo operates out of Bangalore, while a platform called Genie operates out of Chennai. There is also a platform called Whizzy, which operates out of Hyderabad. While these have been sustaining themselves quite well, competition from a brand like Swiggy, which recently received 1 Billion USD in its latest round of funding, can prove to be catastrophic for these smaller names.
Of course, it is not just a question of funding. Brands like Swiggy also have access to a bigger consumer base and more comprehensive consumer data, which allows them to structure their offerings and marketing activities accordingly. Smaller brands must work much harder to gain a consumer’s trust and repeated orders.
Competing with Grofers and BigBasket
With the groceries market expected to grow to 7 Billion USD by 2022, the online grocery segment in India is still quite green. In terms of competing with Grofers and BigBasket, Swiggy’s biggest challenge will lie in the fact that not every grocery store offers all the products a consumer is looking for. Conversely, Grofers and BigBasket offer a wide range of products that are all delivered together. On paper, these brands offer a more convenient grocery shopping experience than what seems to be Swiggy’s offerings. But, theories on paper often differ from reality, and we’ll have to see how this vertical benefits Swiggy in the long run!
Swiggy has already launched a beta version of Swiggy Store. This is operating in Gurugram and has partnered with 3,500 local stores.
