Swiggy Business Model: If a person is interested in food delivery mobile applications and websites and wants to know the business model that is followed by such food delivery platform companies, this is the right place for them. Today, convenience has become an important part of the current generation’s lifestyle. Everything is available online. Furniture, clothes and even food can be ordered from mobile apps while sitting at home. And when it comes to food, there is one app that is rapidly growing in the Indian market and that is Swiggy. With its arrival, Swiggy has made a lot of noise in the food delivery industry in India. The company has made sure to provide good quality food to its customers by partnering with good restaurants. So, with good food and timely delivery, Swiggy is winning the hearts of people in India.
About the Company
Swiggy is one of the biggest platforms in India for ordering food online and for the delivery of it. The company was founded in 2014 by Sriharsha Majety, Nandan Reddy and Rahul Jaimini. The company has headquarters in the city of Bangalore, India. Bundl Technologies is the parent company of Swiggy. Since its inception, Swiggy has grown at a really fast pace and as of 2019, the company has a presence in over 100 cities in the country. The company has also expanded its business to include the delivery of general products under the name of Swiggy Stores. Another service named Swiggy Go was launched by the company in September 2019. The purpose of the service is to pick up and drop items in a short period of time. The items that need to be delivered can vary according to every order. It can be parcels, important documents or just laundry.
Swiggy has partnered with companies like Burger King and Google Local Guide. The company also got into a partnership with Sodexo so that the customers can have more options regarding the payment of the order.
Swiggy Business Model
Are you curious to know how Swiggy make money?
The one thing to notice about Swiggy is that the company does not just show a collection of restaurants in its application, but also provides delivery partners who are able to deliver the food on time. The platform used by Swiggy focuses on innovative technology that connects the restaurants and the customers. Swiggy operates on what is called a dual-partnership model. This benefits the restaurants associated with Swiggy as they get more orders from the app and since Swiggy has its own team of people who deliver food, the restaurants do not have to arrange for the timely delivery of food.
How Does Swiggy Work?
Swiggy mainly connects with its customers through its mobile application and the website. The food lovers open the Swiggy app on their mobile phones and then browse through a plethora of restaurants to look for what they want to order. The menus of the restaurants are also available on the website of the company as well as on the mobile app. Once the order is placed by the customer, he or she is able to track the order on the app. Customers can also get in touch with the delivery person through the app and give them specific instructions related to the order. Swiggy has also helped a lot of small vendors who were making good food but were unable to get enough customers by putting them on the app for the customers to consider.
To completely understand the working of the giant that is Swiggy, one has to look at certain different aspects.
The main target audience of Swiggy is the people who do not want to visit restaurants and eat there. It is the people who want to just at home, order the food from the app and want it to be delivered at their doorstep in a short period of time. But since the company has expanded by offering new services, new customers have been added to the already existing ones. The new ones are those who want to order general products, groceries, laundry, pharmacy etc. online and want them to be delivered at their doorstep.
Swiggy’s Value Proposition
There are two significant value propositions of Swiggy. The first one is that there is no minimum limit on the amount of food (in terms of money) that can be ordered by a customer. Due to this reason, Swiggy receives a lot of orders whose value is not even 100 rupees. This has helped the company significantly as Swiggy manages to get 14 million orders in a single month. The other value proposition is that the company has an online payment system that is highly effective. The reason behind this is that the Swiggy gives the customers 8 options through which he or she can place the order. These options can be divided into 3 categories as followed:
|Digital Wallets:||This category includes services like Paytm, Freecharge, PhonePe and Mobikwik.|
|Cards:||A person can place an order using their credit or debit card. Other cards like Sodexo and Zeta food cards can also be used by customers while making the payment for their orders.|
|Others:||The options that come under others are cash on delivery and LazyPay.|
Relationship with Customers
Swiggy concentrates on customer satisfaction and that is why, they provide customer support 24 hours a day, 7 days a week so that customers can get help if they have any queries or problems. The company keeps engaging with its customers through the mobile app, website or through social media platforms.
Channels and Resources
The Swiggy app is available on both IOS and Android. The main channels of Swiggy include the mobile app, website and social media platforms.
The main resources of the company are the local restaurants and shops. Delivery providers and technology are the other resources that the company has.
Key Activities of Swiggy
The key activities that Swiggy has to perform include the following:
- To build and maintain relationships with restaurants, shops, and bakeries
- Recruitment of delivery providers (full time and half time)
- To manage the process of payment and delivery
- To build IT infrastructure and keep the system up to date
- To handle the problems and queries of partners and customers
- To acquire customers and manage their orders
Swiggy Cost Structure
There are a lot of expenses Swiggy has to cover while running its operations. These operations include:
- Money is needed to cover the expenses of the payroll of workers and delivery partners. Incentives and benefits are also included which are offered to the restaurants by Swiggy. For example – they have to give a commission of 2 to 3 percent.
- Cost of running the app and for the development of the website
- Cost of maintenance and running costs
- Cost of marketing and advertising
- Expenses related to benefits and promotional offers provided to customers
- Expenses in cases of refunds and returns.
Revenue of Swiggy
Swiggy managed to earn a profit of 10 percent on every rupee that was spent by the company in 2018. There are multiple streams from which Swiggy earns its revenue. The streams are as follow:
|Delivery charge:||When an order is placed which is lower than the minimum order value, the company charges 20 to 40 rupees for the delivery expenses. These rates can be changed in case the demand is high or due to adverse weather conditions.|
|Commission:||Swiggy charges commission from restaurants in return for increasing their sales and for delivering their food to the customers. This commission can range from 15 to 25 percent on every order.|
|Advertising:||The company uses its app to display the ads of various restaurants. The company also charges a restaurant if the restaurant wants to appear higher on the list of restaurants.|
|Swiggy Access:||Under this, a partner restaurant can take up kitchen space in an area where it does not operate.|
|Swiggy Super:||It is the membership program launched by the company. Under this, if a person becomes a member, he or she does not have to pay the delivery charges for orders whose cost is above 99 rupees. If a customer takes this membership, he or she also does not have to pay any extra amount during surge pricing.|
|Affiliate:||Another source of revenue for Swiggy is by selling the credit cards of companies it is in partnership with like HSBC, Citibank and ICICI bank.|
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FAQs Regarding Swiggy Business Model
Sriharsha Majety, Nandan Reddy and Rahul Jaimini are the founders of Swiggy.
Swiggy charges a commission of 15 to 25 percent on every order from a restaurant.
Swiggy Super is a membership program offered by the company to its customers. If a person becomes a member, he or she does not have to pay any delivery charge on orders above 99 rupees.
The Swiggy mobile app is available on the Android and IOS platforms.
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Due to the variety of services by Swiggy and efficient customer support it provides to the public, the company has become a major player in the food delivery industry. The company is constantly evolving and innovating and that is why Swiggy is expected to gain a significant advantage over its competitors in the future.
So, it was all about the business model of Swiggy. We hope you like all the insights in the article. If you have any query, feel free to comment and we will respond as soon as possible.
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