Introduction of Swiggy Case Study
Let’s explore the Swiggy case study, which started with two engineering friends at Rajasthan’s Birla Institute of Technology and Science, Pilani (BITS Pilani) college. They have dreamed of stepping into the world of entrepreneurship. In 2014, Swiggy started its journey from there with only 6 delivery executives and 25 restaurants.
Koramangala, one of Bangalore’s industrialist-based cities and rich in educational institutions, was Swiggy’s first office.
By investigating the Swiggy case study we found, that Swiggy has now emerged as one of the market leaders despite competing food delivery platforms like Zomato, EatSure, etc. With just 35 orders in the first month of 2014, Swiggy grew year by year and by this expansion, this company has revolutionized the way people order food.
At present Swiggy has more than 2,60,000 delivery executives, more than 1,50,000 restaurant partners, 5000 plus employees, and 500 plus cities across the country.
Who are the Founders of Swiggy?
As per the data, based on the Swiggy case study In August 2014, Swiggy was founded by two bright brains Sriharsha Majety and Nandan Reddy. In 2013, both were working on their first start-up ‘Bundle’, an e-commerce platform offering courier services in India.
After the failure of Bundle, they started Swiggy with IIT Kharagpur alumnus Rahul Jaimini. Rahul played a key role at Swiggy in building the company’s technology infrastructure.
What is the Business Model of Swiggy?
Swiggy’s business model is quite basic and shaped circularly.
- Customers need to sign up for the Swiggy App
- Then select your favorite restaurant and order the food as you like.
- The app will confirm your delivery location and the restaurant where you have placed, your order will be accepted, and send you a confirmation. Due to very advanced technology, this process is completed in a few seconds.
- Within a few moments of the restaurant’s order confirmation, Swiggy’s local delivery boy confirms the pickup. Then he goes to pick the order from the selected restaurant. After collecting the food from the restaurant, the order is dropped to the customer at the delivery location.
Sitting at his location, the customer can track the entire process including the delivery boy and his location towards the customer’s destination through the Swiggy app.
Exploring Swiggy’s case study reveals that before Swiggy came, the main problem of other food delivery apps was not being able to deliver the food on time.
In the Swiggy case study, ever since the launch of Swiggy in Kormangala, they promised that they would solve this problem of food delivery. They keep promoting that they will deliver the food to the delivery location within 30 minutes of placing the order. Swiggy keeps its word and that’s why Swiggy’s customer base was gradually increasing at that time.
How Swiggy Earns ?
There are 2 major sources of Swiggy’s Revenue
1) Charging Delivery Fee – Swiggy charges a nominal delivery fee from customers on every order below a specific amount of rupees 200 for most cities. There is no minimum order policy. So, you can even order less than rupees 100 with a very nominal delivery fee. In cases of peak hours of the day, special occasions, rains, or midnight delivery Swiggy often increases their delivery charges. The customers love to place small orders and Swiggy gets delivery charges. So finally it’s a clear win-win situation for Swiggy and the customer both.
2) Commission from Restaurants – The major part of Swiggy’s revenue comes through commissions from restaurants. It collects from restaurants for lead generation and for serving as a delivery partner. In the Swiggy case study, Swiggy charges 15-25% commission on total bills (Including GST) from restaurants. The commission percentage can differ based on the location of restaurants, how competitors are charging a commission, the number of orders, etc.
3) Revenue from Other Sources – Apart from these in the Swiggy case study, Swiggy makes money from advertising the restaurants, through affiliate income with the help of multiple payment and processing partners, from subscription or membership opportunities in the form of Swiggy Super (Now Swiggy One), from Swiggy Access (kitchen for restaurant partners/cloud kitchen) and Swiggy Go or Swiggy Genie (instant pick up and drop service), etc.
What are the Fundings of Swiggy?
In the Swiggy case study initially, when Swiggy started they had a serious round which is undisclosed but it might be 1 crore. After this Swiggy has never stopped. They have so many big investors like SAIF Partners, Accel Partners, Norwest Venture, etc. So, just in the span of 3 years from 2015 to 2018, the Swiggy case study shows that Swiggy was able to raise 2 Million dollars to 1 Billion dollars.
Funding data is as follows:-
2015, April – Series A Round, 2 Million Dollars from Accel and SAIF partners.
2015, June – Series B Round, 16.5 Million Dollars from Norwest Venture Partners (NVP) along with existing investors.
2016, January – Series C Round, 35 Million Dollars from Harmony Partners and RB investments along with existing investors.
2016, May – Series C Round, 7 Million Dollars from Accel and Norwest Venture Partners.
2016, September – Series D Round, 15 Million Dollars from Bessemer Venture, Norwest Venture, Accel, and SAIF partners.
2017, May – Series E Round, 80 Million Dollars from Bessemer Venture, Norwest Venture, Accel, and SAIF partners.
2018, February – Series F Round, 100 Million Dollars from Prosus, Naspers, and Meituan-Dianping.
2018, June – Series G Round, 210 Million Dollars from Prosus, Naspers, Meituan-Dianping, DST Global and Coatue M.
2018, December – Series H Round, 1 Billion Dollars from Prosus, Naspers, Meituan-Dianping, DST Global, and Coatue.
What is the Marketing Strategies of Swiggy?
In the Swiggy case study, Swiggy’s success story relies on its marketing strategy which consists both offline and online.
Rahul Jaimini knew that the age group between 18-35 is the main class that gives Swiggy most of the business. Because people of this age group mostly study outside the home and some of this age group also do some jobs. Interestingly, around 90% of people in this age group also use Android phones, the highest number among others. So it is known through the Swiggy case study analysis, that Rahul Jaimini started promoting Swiggy on social media platforms to capture this class.
Swiggy is being promoted on platforms like Facebook, Instagram and Twitter. Also, various campaigns run on YouTube. Swiggy hires social media management companies to complete these tasks properly.
Besides email marketing, Rahul also does internet marketing through SEO work quite efficiently.
Through Offline, Swiggy’s agents also visit door-to-door customer places to take reviews on serving foods and as well as the Swiggy app.
All the delivery boys wear swiggy printed T-shirts during the delivery which is also a method of promoting the Brand.
What are the Challenges faced by Swiggy?
Because of so many opportunities in the market like other food delivery apps, in the analysis of Swiggy’s case study, we found that Swiggy also faces high pressure to satisfy the customers as well as its delivery executives. Swiggy’s main challenges are
1) Competitors
In the online food delivery industry near around 65 competitors with Zomato and others top of the list. Previously Ola and Uber had also invested.
As of now the current market share of Zomato after acquiring Uber Eats is 54% and the Swiggy case study shows Swiggy’s share is 46%. But it keeps fluctuating. These are the No. 1 and No. 2 competitors in the food delivery industry in India alongside other apps.
2) Traffic Problem
Traffic is a major concern in cities like Bangalore, Mumbai and Delhi. Food delivery is very difficult in these cities due to heavy traffic. Especially, during peak hours food delivery becomes a nightmare for food delivery apps.
3) Commission based work
In the Swiggy case study, food delivery app like Swiggy charges commissions from restaurants. So when their partner restaurants offer food directly to customers at a lower cost by removing the commission, these food delivery apps suffer.
4) Food quality and Delivery boy’s behavior
The biggest disadvantage of online food delivery is that the quality of food does not always match the price. Hence, online food delivery apps like Swiggy have fallen behind when it comes to customer satisfaction.
Moreover, the behavior of food delivery boys is not always customer-friendly. In the case of midnight delivery, sometimes few delivery boys go to delivery in a drunk state.
5) Technical Glitch
Swiggy case study shows, that the heart of Swiggy’s success lies in its technology-driven approach. So, it faces some technical glitches when it is unable to navigate its algorithm.
Future Plans of Swiggy
Swiggy case study reveals after navigating through market challenges Swiggy, a leading player in India’s increasing food and grocery delivery landscape backed by Softbank, is setting its sights on an IPO debut in 2024. According to many sources, Swiggy Group CEO Sriharsha Majety revealed the company’s measured approach towards an initial public offering (IPO), emphasizing a focus on comprehensive preparation rather than rushing into the market.
The company’s valuation stood at an impressive $10.7 billion in its last funding round in 2022. However, in the Swiggy case study like many other Indian startups, Swiggy had to put its IPO plans on hold amidst market uncertainties and concerns over inflated valuations. The recent market resurgence, both domestically and globally, has spurred Swiggy to resume its IPO preparations with renewed vigor.
To navigate its IPO journey, Swiggy has engaged with eight investment banks for preliminary proposals, with notable names such as Morgan Stanley, JP Morgan, and Bank of America in the mix, as reported by Reuters news agency.
While in the Swiggy case study, Swiggy aims to use its previous $10.7 billion valuation as a reference point, the extent of the stake sale and final valuation remains to be determined. In contrast, Invesco, a minor shareholder, valued Swiggy at approximately $5.5 billion in May, offering varying perspectives on the company’s worth.
Initial discussions hinted at Swiggy’s contemplation of raising between $800 million to $1 billion through its IPO, based on insider sources. The target timeline for the IPO listing is between July and September 2024, following India’s national elections slated for May.
Swiggy achieved a significant milestone in May when its core food delivery segment turned profitable, nine years after its inception. However, its newer venture, the grocery delivery arm Instamart, continues to grapple with losses, underscoring the challenges and opportunities ahead for the company in the dynamic food delivery landscape.
Looking ahead, the Swiggy case study shows that Swiggy is also leveraging the power of Artificial Intelligence (AI) as a foundation for future growth. With initiatives like Swiggy Mini in Bengaluru, the company is embracing the transformative potential of AI, recognizing that innovation and experimentation are key drivers of customer satisfaction and business success.
Conclusion
By the conclusion of the Swiggy case study, Swiggy’s incredible rise in the food delivery industry is remarkable. Its relentless focus on customer-centricity and technology-driven solutions is behind the fact that Swiggy has become a decacorn company in India within a very short period. Besides these, the Swiggy case study reveals that Swiggy diversified its business with the introduction of Instamart (allowing customers to order groceries, medicines, and other essential items), Health Hub (which offers healthy diet options), and Swiggy Daily (which offers home-like food every day) services.
Despite this, some food delivery companies like Swiggy have faced profitability challenges. They face high expenses and low profit margins. Swiggy’s loss in the financial year 2017 was around Rs 205 crore. There was a significant jump in the year 2023, with a loss of around Rs 4400 crore.
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Swiggy acts as an intermediary between restaurants and customers. When you order food through the Swiggy app, it sends the order to the restaurant. Then, a delivery person, called a rider, picks up your order from the restaurant and brings it to your doorstep.
Swiggy aims to make food delivery easy by using innovative technology.
You can get the convenience from Swiggy by ordering a wide range of food. With Swiggy, you can also enjoy fast delivery, live order tracking, and exciting discounts and cashback offers.
Swiggy shifted gears, narrowing down its focus to food and grocery delivery, which paid off big time! By streamlining operations and cutting back on other ventures, the company slashed its monthly spending from a whopping $45-50 million in 2021 to just $20 million in 2023. However, Swiggy hit profitability in March 2023, according to its co-founder and CEO, Sriharsha Majety.
Swiggy, known for delivering food and groceries, stopped its meat delivery marketplace as this move is part of the company’s efforts to trim costs and focus on its core services.
Swiggy, the popular online food ordering app, has officially changed its name from Bundl Technologies Pvt Ltd to Swiggy Pvt Ltd. This change was approved by the company’s shareholders through a special resolution
Sriharsha Majety and Nandan Reddy, graduates from BITS Pilani, are the brains behind Swiggy. Along with Rahul Jaimani, they launched Swiggy as a local food delivery service in August 2014.
The Merchant takes full responsibility for any warranties or guarantees on the goods or services sold to buyers. Swiggy is not liable for any such warranties or guarantees.
Two big players now dominate the industry, both claiming almost equal share of the Indian market. Still, Zomato holds its edge, holding 54% compared to Swiggy’s 46% in the food delivery market as of the first half of 2023, as per reports.
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