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Case Study of Swiggy Start-up:

Updated on May 28, 2020

Swiggy – Customer ServicesSwiggy – Consumer Services…………….

  1. About:

In 2014, Swiggy started operations in the venerable Koramangala neighborhood of Bengaluru, covering just one district, with six delivery managers and 25 partner restaurants. It offers a complete solution for food ordering and distribution, from a wide variety of restaurants to urban food. Today, it has more than 2.1 lakh active distribution partners and processes almost 1.4 Mn daily food orders across India, compared to about 700 K orders per day last year.

It announced the start of operations in its 500th city in October 2019 and plans to expand to 600 cities by December 2019, with the most recent $1-billion support from Naspers and Tencent Holdings. The development came at the cost of profit; with a total loss of INR 397 Cr, Swiggy ended FY 2018-19 with a 93 percent rise in losses.

2. Founders Swiggy:

Swiggy was founded in August 2014 by Nandan Reddy, Sriharsha Majety, and Rahul Jaimini. The 29-year-old Nandan Reddy and the 31-year-old Sriharsha Majety are both alumni of Birla Institute of Technology and Science (BITS) Pilani, while the 31-year-old Rahul Jaimini is an IIT alumnus.

3. Swiggy – Business Plan:

Business model Swiggy is quite basic. They understand the strength of an efficiently distributed hyperlocal service via a well-oiled system. One can see the chart below as the center of how Swiggy functions.

The cycle starts with a customer finding a restaurant on their mobile device or website and placing an order after considering their choices. The restaurant accepts the order, prepares it, and awaits the arrival of the delivery executive. The delivery executive, arranged by Swiggy, arrives at the restaurant, collects the order, and delivers it to the customer's address given earlier.

Easy as it is, the entire process is simplified by cutting edge technology that improves positive user experience. One thing Swiggy learned from the previously developing unorganized food delivery industry was the problem of time. It took a lot of time for independent restaurants to fulfill orders, as there was no framework to guide every operation. That's why Swiggy's dual-focused approach to both consumers and restaurants paid rich dividends.

Swiggy has two significant sources of revenue.

  • The majority of Swiggy's fee revenue it receives from restaurants for lead generation and to act as a supply partner.

  • Swiggy also charges customers a nominal delivery fee on orders below a threshold amount of 200 rupees for most locations.

4. Funding by INVESTORS:

Swiggy is sponsored through one of the best investors available in the marketplace. Swiggy has earned a total of $75.5 million in funding from various investors, including Bessemer Venture Partners, Norwest Venture, Accel Partners, SAIF Partners, Harmony Venture Partners, RB Investments and Apoletto.

Investors

  • April 2015 $2M AccelSAIF Partners

  • June 2015 $16.5M AccelNorwest Venture PartnersSAIF Partners

  • Jan 2016 $35M AccelNorwest Venture PartnersSAIF PartnersHarmony PartnersRB

  • May 2016 $7M AccelNorwest Venture Partners

  • September 2016 $15M AccelNorwest Venture PartnersSAIF PartnersBessemer

Venture Partners

  • Jan 2017 $5M Innoven Capital

  • May 2017 $80M AccelNorwest Venture PartnersSAIF PartnersBessemer Venture

PartnersProsus & NaspersHarmony Partners

  • February 2018 $100M Prosus & NaspersMeituan-Dianping

  • June 2018 $210M Prosus & NaspersMeituan-DianpingDST GlobalCoatue M.

  • December 2018 : $1B Prosus & NaspersMeituan-DianpingDST GlobalCoatue .

5. Swiggy Marketing Strategies:

The marketing strategy of Swiggy consists of marketing campaigns online and offline. It promotes its campaigns through Facebook, Twitter, Youtube, Pinterest, and Instagram. Some of its campaigns include Secondtomom,#DiwaliGhayAayi,#SingwithSwiggy, and Know the pictures and food walk of your food series in a local area. The business has developed its brand image effectively, and through these channels interacts with its audience. With daily updates their Facebook page is very active, averaging to one post a day. Swiggy not only uses its social media to advertise but also to communicate with its customers from answering the complaints to getting reviews.

6. Challenges faced by Swiggy:

  • Inconsistent consistency of the food

  • Prior distribution date,

  • Packaging the meal at distribution

  • Conditional feeding

  • Huge transportation costs with very low margins on orders to run

  • Increase distribution of more orders by increasing delivery boy

  • To navigate algorithm

7. Successive factor of Swiggy :

  • Strong advertising channel.

  • Efficient personnel.

  • The good rating system and social media.

  • Experienced sources of funds.

8. Result:

Swiggy got a lot of stuff right but its outstanding logistics operations are the driving force behind its growth. ... The likes of Zomato, TinyOwl, and Foodpanda developed marketplaces that linked clients to restaurants but "outsourced" distribution to either restaurants or logistics providers from third parties.

Estimated Valuation: $3.3 Bn

#References:
Information was taken from Google, Wikipedia, and particularly from their startup website and app.

I hope you guys enjoy the information……….

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    • AdityaKhare18 profile image

      Aditya Khare 

      14 months ago from India

      Great work

    working

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