Swiggy case study: The sweet and sour journey of India’s fastest Unicorn start-up
Here we bring the case study about India’s fastest growing company. Swiggy is an Indian food unicorn that disrupted the food industry after Zomato (Read Zomato case study). While both are food aggregator apps, ask their customers to log-in via mobile numbers or e-mail, bring food to their doorsteps, the latter is more detail-oriented and doubles up as a collaboration platform for food bloggers with reviews and ratings.
Zomato has also branched out into many offerings such as Zomato Gold, Zomato Video, Zomaland, cooking shows, curated shows and so on. It is like an all-you-can-eat buffet, where you can eat Asian food, North Indian cuisine, or get street food of your choice.
But, you may return with a feeling of being full without practically eating any of it. Swiggy, however, keeps it simple and enables food delivery to your doorsteps-within a few clicks! It is your local café that enlists only four or five food items,and you always end up ordering the regulars.
Ordering food at Swiggy is incredibly easy. You can search for the restaurants or dish of your choice. There is a section of famous brands, your previous orders and daily meals for people ordering food at work. There are no reviews, only ratings. If you are looking for reviews of a particular restaurant, go to Zomato! (See, what they did here!) This feature comes in handy when you are hungry, have guests, or don’t want to take chances with your food!
The Startup Journey Case Study about Swiggy
Swiggy is based in Bangalore and started its humble journey with merely twenty-five restaurants and six delivery partners in the city. It was founded by Nandan Reddy, Rahul Jaimani, and Sriharsha Majety. Reddy and Majety initially started a logistic aggregator company Bundl. Still, they soon realised the need to have a competent partner to bring quality food to people who are ‘hangry’ and don’t want to step out. Jaimini came along, and this is how, ladies and gentlemen, Swiggy-the hyperlocal restaurant logistic company came into being to fill the invisible gaps between the food ecosystem and-hence, fixing the perennial problem of Indian restaurants’‘the non-availability of a delivery boy’. In simpler words, it is your local delivery boy who is bringing you food with an online ‘LIVE’ tracking system and can’t misguide you that ‘they are about to reach.’
A little update here: Rahul Jaimni has called it quits May 7th, 2020.
While the food unicorn start-up faces competition from other standalone food apps such as Faasos, Foodpanda and Box8, the real hunger game is between Zomato and Swiggy. They keep changing their app layouts, bringing several restaurants with exciting offers and unique offerings such as ‘Swiggy Meal for One’, ‘Mealbox Options’ and ‘Pocket-Friendly.’ Still, as their stepping stones, both companies have technology as the core differentiator.
VP, Design, SrinathRangamani at Swiggy stresses that the company wants the experience to be most comfortable and fastest out there with the one-hand gestures online users are accustomed to. The app is optimised for both left-handed and right-handed users. Swiggy app is minimal navigation amidst uncluttered user interface.
How Swiggy Becomes the Food Delivery Giant in India
Swiggy focuses on creating a dedicated delivery network and a smoother technology-driven logistic channel. If an order is cancelled after being placed, the amount is still credited to a restaurant. Customers too can cancel the order if it doesn’t get delivered within the stipulated period. The delivery partners have GPS-enabled strategy that enables real-time tracking. The company has also collaborated with Google Maps API to track their order and amount of time to give estimate real-time.
Some marketing gurus also term Swiggy as India’s fastest unicorn story and rightly so. Its rise has been phenomenal. It caught up with Zomato and revolutionised the food industry with tech mash-up.
In 2014, when Swiggy was launched in Bengaluru, it was up in arms against several promising, big and small players like TinyOwl, Dazo, Spoojoy and Zupermeal. But it is the only one that could march on with its impeccable timing of product launch, exclusive discount offering, and continuous funding. By 2017, Swiggy had its cash register ringing with more than 450.1 per cent revenue growth.
Swiggy Marketing Model – A Case Study
Swiggy hasn’t been a pioneer in FoodTech industry, but in taking a giant leap of faith for marketing and online promotions as well. It utilises every platform to expand its reach and penetrate new segments.
The delivery app has carefully yet smartly changed its proposition in over five years.
From a youngster’s choice or a bachelor’s haven to eat wholesome food to a mother’s favourite when she is no mood to cook, from ‘Swiggy karo fir chahe jo karo’ to completing ‘Gharkakhana’, Swiggy has moved ahead gradually to become a household choice. Indian households don’t emulate the Western culture of ‘take away’ or ‘pizza nights,’ this move was a bold one and towards getting an acceptance into a modern Indian family living in a metro city.
Since the food company is a digital-first brand, it has to cash in on every opportunity to drive engagement and wait to go viral. Apart from brand recall, Swiggy’s social media platform strategy has to stay on top of things and keep communication in line with its ‘fun’ and ‘young’ image. Social media is all about aesthetics and presentation, and Swiggy doesn’t falter at all. The content is exciting and funny.
How Swiggy Used Many Digital marketing strategies for its successful venture?
However, it isn’t complicated. Swiggy’s communication strategy is for people from all walks of life. Sometimes, a photograph is all you need to understand the context. It is so tempting that if you are feeling hungry, just don’t look at their feed! Swiggy taken advantage of many digital marketing companies who offer great social strategies to them.
TikTok
The food app launched the Swiggy Starhunt campaign on TikTok exclusively to feature its delivery partners. While it helped the company to bring some relief in their otherwise hectic schedule of delivery partners, it also brought a creative diversion. It added a gentle touch to the logistics side of the business. For a customer who prefers contactless delivery, the food delivery is just a doorbell. With this move, the food start-up could put a face to their name. The platform also helped the delivery partners to unleash their creative side and pursue a second income rather seriously.
The food app also collaborated with TikTok influencers and had a record organic engagement rate of about 57 lakhs.
The campaign was promoted simultaneously on Facebook and Twitter in eleven languages with videos, GIFs and posts.
Swiggy usesunique hashtags such as #SwiggyVoiceofHunger and #GeniePotluck to drive engagement.
As the restaurants open again after the pandemic, they banked on a personal approach and did what they do best! Here’s a video of telling people to visit their favourite hotel- despite the food start-up being about big on ordering and not dining-in. It understands that it needs to maintain trust much before people could start ordering at home.
Swiggy’s approach on Instagram has been refreshing, light and casual. The idea is to drive the conversation and not sell the brand. To make friends and not followers!
Swiggy has been at the forefront of using social media and its compellingfeatures. It started using Instagram’s new voice note features to urge its users to send them voice note in the form of food with #VoiceofHunger. The Instagram team received more than fifty DMs per minute and over 9,000 messages on day one-and wait for it- over 2100 per cent increase in app traffic via Instagram!
It is to be noted that this feature was rolled in just a few days after India was hit with #metoo campaign. The brand team had to revise its list of influencers in a short period to ensure that none of the controversial names is on the list or signed.
Swiggy has two accounts of Twitter. The other account is to handle customers’ grievances.
The company uses TweetDeckto manage its multiple Twitter accounts, searches and notifications. The social media ‘listening” capabilities of Swiggy is enviable. A user talks about it, be it brickbats or bouquets; they get an immediate response. Besides, the reactions of routine complaints, the social media team is usually inventive with its response.
Swiggy Blog Case Study
Swiggy uses this platform to drop in news, interesting bits and bytes to stay connected with its users. From any update regarding technology to exciting chit-chat among the employees and ‘food for thought’ – you can see how the language turns formal to informal and casual with each blog post and under a different section. Besides, the team doesn’t use any keyword on this content-rich platform; it is mainly to stay transparent and give the readers a peek into the company’s work culture.
Apart from the one tab that takes you to its website!
Swiggy on Facebook
The Facebook profile of Swiggy is the usual, synchronised pattern of its social media platforms. It is all about posts, GIFs, memes, and grievance redressal.
E-mail marketing
Swiggy’s e-mail marketing has been an all-rounder winner throughout. India’s premium food ordering and delivery platform has achieved a remarkable rate of twenty-five per cent with a record seven per cent of CTR. While the industry average doesn’t go beyond one or two per cent, the food start-up worked drove the campaign with personalised CTAs, and catchy subject lines. The food app uses AI-driven delivery to ensure that the e-mails land in the primary inbox. The unique click-through rates doubled in less than four months!
High on aesthetics, colour scheme and with catchy subject lines such as ‘Unlockyour coupon’, ‘You have got a discount’ or ‘Win it’- Swiggy’s e-mail marketing campaigns, are a study in enticing customers with good content and grand themes.
The revenue model of Swiggy – The Case Study
Crazy money being spent on online marketing, and enticing discounts have made Swiggy a popular choice, but as per the official financial stats, it has failed to break even. Swiggy’s base model of revenue is as follows:
Commissions
Swiggy charges commission of up to 25 per cent from the restaurant. This commission is inclusive of GST and is levied above the menu price. The commission charges vary basis the location of a restaurant, number of orders, and restaurant’s credibility in the market and so on. A new restaurant in a new city will be charged lesser.
Delivery charges
There is no provision of minimum order, and a flat delivery charge is taken from the customers unless you go ‘Super’! Usually, there is a delivery fee on a low-quantity order. It pushes people in the direction to order more. Swiggy also has a concept of surge pricing or delivery fee in case ofbad weather, midnight delivery or non-availability of delivery partners in that area.
Swiggy Super
Swiggy Super is a subscription-based model that lets users avail unlimited free delivery and don’t have to pay surge fee.
Advertising
Banner promotions, sponsored, and priority listing are Swiggy’s source of constant income through the restaurants. Banner promotion of restaurant isn’t a new trick, and Zomato has aced it a long while ago. Since Swiggy remains reasonably tight-lipped and takes customer data as well as their privacy rather seriously, a restaurant’s only way to get more customers is getting visibility amidst the crowd.
Cloud Kitchen-Swiggy Access
Swiggy’s own set of the private-label kitchen offering customised menu is the next step in the direction of getting some constant stream of revenue. It was launched in Bangalore and had thirty restaurants and thirty-six kitchens to begin within Delhi, Mumbai, Kolkata and Hyderabad. Unfortunately, the plan went on hold due to COVID-19 pandemic and the company had shut its cloud kitchen operation in Bangalore. Such a setback, for, about twenty-five per cent volumes of the order came via cloud kitchen where the restaurants paid extra commission to be in the loyalty circle.
Collaboration
The foodtech start-up generates income through affiliate marketing. Several banking and financial institutions have tied up with Swiggy to offer several discounts, sign-up offers and gain more traction both side.
Case Study about The COVID-19 Impact and Swiggy
Swiggy had laid off 1,100 employees owing to the economic slump of COVID-19 pandemic that has taken away eighty to ninety per cent of the business. Out of this were 500 ‘Cloud Kitchen’ employees who were a part of Swiggy’s ambitious expansion plan.
It happened despite it raising $113 million in Februarythrough the existing investor Prosus NV along with Wellington Management Company and MeituanDianping.
India’s premier food delivery platform raised an additional $43 million in April through this round. It was attributed to the expansion of the business butowing to COVID-19, ithad to berouted to a different direction. While it expanded to beyond food last year in select cities, it went into survival mode in the times of corona.
Amid this pandemic, like its counterpart Zomato, Swiggy pulled a Dunzo and doubled up like the versatile delivery partner you can only dream of. Indians living in an extreme lockdown of one-of-its-kind, the food delivery app seemed like a Godsend for million citizens living in significant cities out there. From grocery to staple food items and essentials like masks and hand sanitisers were delivered within two hours. The app later introduced Swiggy Genie- your very own delivery partner who could provide or pick anything from documents to a pair of keys!
The food start-up is also assessing the situation and is waiting to roll out its much ambitious Indian version of urban fulfilmentcentres ala the Dark Store. These will be called ‘Urban Kirana.’ It will eventually be launched in select cities starting from Bengaluru. This diversification doesn’t stop here. Both Zomato and Swiggy are in talks with several states for online home delivery of liquor. Using the massive fleets of delivery partners, Swiggy could deliver alcohol and essential items seamlessly without pushing people to come out of their homes, again fulfilling its core promise of being a hyperlocal delivery partner. VivekSundar, COO at Swiggy also deem it as an essential move because the operations are closed in more than 200 cities, causing a severe dent in the business that is barely staying afloat.
The platforms are in talks with restaurants for ‘LIVE’ streaming from the kitchen you have ordered. You can see how your order is being prepared and the sanitisation in the kitchen.
It is not far-fetched or a story from Black Mirror. It is all going to be a reality in the post-COVID world and maybe, the new normal too.
The brighter side of Swiggy Case Study
While doing case stud for Swiggy, we found lots of positive sign for this Unicorn brand to lead the market. Swiggy went on to acquire a Bengaluru-based AI start-up, Kint.io. To solidify its pan-India delivery operations, it gained an on-demand delivery firm, Scootsy. It also acquired daily grocery delivery start-up, SuprDaily and a food start-up 48East. These acquisitions and laser-sharp focus on expansion are helping Swiggy in these testing times. While the food delivery orders took a plunge, it was the delivery of grocery, essential items and liquor that kept the food start-up in business. It had rolled out some of the operations already, but it barely had the time to test the waters.
The pandemic, however, was the push into the ocean, and it seems that customers aren’t complaining and appreciating the facility of not stepping out and still not having to compromise their lifestyle.
Challenges Ahead
This diversification also makes things difficult for Swiggy as already established players like Big Basket, Amazon Pantry, and Grofers are breathing down its neck. Amazon, with its AI-based delivery and unrivalled delivery chain, is a cause of constant headache for Indian start-ups.
The National Restaurant Association of India or NRAI has already a restaurant aggregator and delivery platform in the pipeline, and many restaurants on Swiggy and Zomato would be expected to sell and deliver food on NRAI platform too. The NRAI has also assured that it won’t eat into restaurants’ margins like Swiggy and Zomato or won’t launch any “tech” features without consensus.
The American conglomerate had started its operation in Bengaluru, but its plans to expand in other cities were derailed too. However, it won’t be too long before we see how this food war gone wild would turn out to be!
The huge commission levied by the company has already forced out some reputable food chains such as SodaBottleOpenerWala, Monkey Bar and Fatty Bao to initiate a #logout movement against the delivery platforms.
As far as the cloud kitchen concept is concerned, many small and preferred start-ups are gaining traction. Regional players are also jumping in the segment to try their luck. So, the challenges that Swiggy faces are
Given the extenuating circumstances and economic downturns, Swiggy has evoked the ‘force majeure’ clause of the contracts. It implies that restaurants, including international chains, will have to go exclusive now. They can’t tie up with another food delivery aggregator, causing a rush of panic in the restaurants that are already dealing with a significant blow due to the global pandemic.
Conclusion
From farm to fork, Swiggy has come a long way in the food chain. It is the story that dreams of future entrepreneurs are made of. The journey from a bootstrapped start-up to technology-driven marvel- it has played its card right.
It is perhaps very well on its way of becoming the unicorn in FoodTech industry that can have its cake and eat it too! While it is scaling up and wisely refraining from keeping all its eggs in one basket, the backbone of Swiggy remains its technology and delivery channels. The rest, from grocery supply to liquor delivery, is pieces of a jigsaw puzzle that they are hoping to fall in the right place.
While it would take the customers some time to regain their trust in the food industry and ordering right away without a second thought, but they will come around. Until then, it is going to be a litmus test for Swiggy to sustain and survive through these tough times ahead. The branching out to different verticals would ease-out, but the transition given the fierce competitiveness isn’t going to be an easy task.