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Tag: Swiggy

  • Swiggy’s Losses Double Amid Marketing Surge And Delivery Challenges

    Swiggy’s Losses Double Amid Marketing Surge And Delivery Challenges

    Swiggy, one of India’s leading online food delivery platforms, has reported a near-doubling of its quarterly loss compared to the same period last year. This increase in losses is attributed to a significant rise in marketing expenditures aimed at securing a larger customer base in an intensely competitive market.

    Growth Strategies and Challenges

    In its decade-long presence in the market, Swiggy has maintained its position among the top contenders in the food delivery industry through continuous investments in marketing, platform enhancements, and customer loyalty programs. The company is also directing funds into its rapid retail division, Instamart, as part of efforts to expand its network of stores, fortify logistics, and provide enticing discounts.

    However, the company’s operations have been affected by issues relating to a shortage of delivery partners, a situation exacerbated by unanticipated monsoon rains in India. Concurrently, the need for sustained, high levels of marketing investments has been necessitated by persistent competition.

    The competition is not just limited to the food delivery sector. The rapid retail sector in India is becoming increasingly crowded, with competitors such as the Tata-backed BigBasket and Amazon vying for market share. Furthermore, Swiggy faces additional competition in the food delivery space from the ride-hailing platform, Rapido, where Swiggy holds a 12 per cent stake.

    Financial Performance

    Despite these challenges, Swiggy’s total revenue for the quarter ending June 30 increased by 54 per cent, amounting to 49.61 billion rupees (US$566.2 million). However, consolidated expenses also saw a significant jump, up by around 60 per cent to 62.44 billion rupees, with sales promotions more than doubling. Consequently, the company’s consolidated net loss for the quarter rose to 11.97 billion rupees, a significant increase from the 6.11 billion rupees loss reported in the same period last year.

    Expansion and Order Value

    Despite these financial setbacks, Swiggy continued to expand its geographical reach, adding three new cities to its network to stand at a total of 127. The company also added 41 stores and increased the size of existing ones. The gross order value from its food delivery segment climbed by approximately 19 per cent to 80.86 billion rupees in the June quarter. Meanwhile, Instamart’s gross order value saw a massive surge of nearly 108 per cent, reaching 56.55 billion rupees.

    Questions & Answers

    What factors contributed to Swiggy’s increased quarterly losses?
    Increased marketing spend to attract customers in a fiercely competitive market, along with the expansion of its quick-commerce arm, Instamart, significantly contributed to Swiggy’s increased losses.

    What challenges did the company face recently?
    Swiggy experienced a shortage of delivery partners due to earlier than anticipated monsoons in India. Additionally, the company faced stiff competition, necessitating high marketing investments.

    Did Swiggy see any growth despite these challenges?
    Yes, Swiggy reported a 54 per cent surge in total revenue for the quarter ending June 30. The company also expanded its services to three new cities, added 41 stores, and saw a substantial rise in gross order value from both its food delivery segment and Instamart.

  • India’s Zomato shares tumble to record low

    India’s Zomato shares tumble to record low

    Shares of Indian food-delivery company Zomato plunged 14.3 per cent to a record low today, as a one-year lock-in period for promoters, employees and other investors came to an end following last year’s listing.

    Zomato made a stellar debut on July 23 last year in the Mumbai market, but its shares have lost more than 60 per cent of their value since then.

    “Investors are concerned about the sell-off through employees and promoters,” said Prashanth Tapse, VP of research at Mehta Equities.

    Investors are also not comfortable with the acquisition of Blinkit, he said, adding that the fundamentals of the company were still good.

    Including Monday’s losses, Zomato shares have lost nearly 30 per cent since the company announced its deal to buy local grocery delivery startup Blinkit in June.

    Today, the stock posted its biggest intraday percentage drop since Janaury 24 in heavy-volume trade of 2.7 times the 30-day average.

    The company now has a market value of 366 billion rupees ($4.58 billion), compared with 1.29 trillion rupees at its peak in November.

    Analysts say Zomato needs to pump more money into Blinkit as the quick-commerce sector grows at a rapid clip, with rivals Swiggy, Reliance Industries-backed Dunzo, Tata-backed BigBasket and Zepto making big investments.

    Zomato is scheduled to report its first-quarter results on August 1. The company had reported a 75 per cent jump in fourth-quarter revenue in May, while gross order value – or the total value of all food delivery orders on its online platform – surged 77 per cent year-on-year to a record high.

    On Friday, Reuters reported that Domino’s Pizza’s India franchise will consider taking some of its business away from Zomato and Swiggy if their commissions rise further.

    In February, Zomato reported a smaller third-quarter loss, helped by a one-time gain from a stake sale, while revenue jumped due to increased demand for restaurant meals.

    Zomato’s dining out business, which offers customers discounts and offers when they eat out at partner restaurants, strengthened as eateries and bars reopened following a drop in Covid-19 cases during the quarter, while the company’s core food delivery business continued to grow.

    “The revival of in-restaurant dining (in the third quarter) led to some green shoots in our dining-out ad-sales business,” the Gurugram-based firm said in a regulatory filing.

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  • Zomato boosts Blinkit delivery stake for US$568 million

    Zomato boosts Blinkit delivery stake for US$568 million

    The top brass of food delivery app Zomato are set to come together on the 17th of June to pen to paper and make the acquisition of Indian based start-up company Blinkit officially complete.

    The deal is set to be of a stock exchange type at a ratio of 1:10 where Blinkit will get a share for every 10 shares Zomato gets from Blinkit. Initially, the value of Blinkit was set at around $ 700 million USD but with this type of deal, that value set to have gone down to an extent.

    Blinkit is a company that Zomato has been eyeing for a while now as they are a business that focuses on instant deliveries. The company was founded almost a decade ago back in 2013 and its head office is situated in Gurgaon, Haryana. Blinkit is a mobile application that can be downloaded on the play store where its users can order groceries, and other items and essentials through the app from the comfort of their own home. The company even guarantees a 10 minutes delivery time.

    A 10-minute delivery time has become the new fad in the delivery business in the country with both Blinkit and Zepto basing their entire business model and marketing strategy on this feature. Zomato has also been piloting their 10-minute delivery feature called Zomato Instant but their Delhi based pilot was not a success. Naturally, delivering food within 10 minutes is much harder than groceries which is why the acquisition of Blinkit is going to be a major boost for them as it will give them crucial help in breaking the 10 minutes barrier which they have been struggling to over the past few months.

    Zomato is one of the most popular food delivery apps in India along with Swiggy and the duo have been battling to be most popular food delivery apps for years now. Swiggy however diversified their features and opened their ‘Instamart’ where they sell fruits, vegetables and groceries while Zomato stuck with just partnering up with restaurants and delivering food. But now, Zomato has also dipped their feet into the grocery delivering business with this new acquisition and it will be interesting to see how it will play out.

    It seems like this deal will be helping all parties involved as Zomato can improve their 10-minute delivery service with the help of Blinkit’s logistics while Blinkit can increase their operations with the help of Zomato.

  • Indian grocery startup Zepto raises new funds at $900 million valuation

    Indian grocery startup Zepto raises new funds at $900 million valuation

    Instant grocery startup Zepto has raised $200 million in a new financing round as it looks to expand its 10-minute delivery service to more cities in India and grow its network of dark stores.

    Existing backer Y Combinator Continuity led Zepto’s Series D round, valuing the Mumbai-headquartered startup at about $900 million, up from $570 million in its December Series C round and $225 million in a round unveiled in late October.

    Kaiser Permanente, the giant healthcare firm, which also operates a venture arm, as well as all key existing investors including Nexus Venture Partners, Glade Brook Capital, Contrary Capital and Lachy Groom, participated in the new round, the startup said Monday evening.

    There’s no secondary transaction in the new round, which brings the startup’s to-date raise to $360 million.

    At 19, Aadit Palicha and Kaivalya Vohra co-founded Zepto. The duo, who had previously worked on a number of projects, including a ride-hailing commute app for school kids, and dropped out of Stanford two years ago, took Zepto out of stealth mode in November last year.

    Its 10-minute delivery service is today operational in 11 cities across India and it processes hundreds of thousands of orders each day, Palicha, who serves as Zepto’s chief executive, told TechCrunch in an interview.

    The startup’s current annualized revenue is between $200 million to $400 million, he said, a figure he is determined to grow to “at least $1 billion” by the quarter ending March next year.

    The surge in revenue comes as the startup has consistently grown by over 50% each month in recent months, he said. In the most recent quarter, the startup grew its revenue by 800% while slashing its expenses per order by more than five times, he said.

    In India, Zepto is among the earliest startups attempting to prove the quick commerce model, a category that has taken off in several markets, including North America and Europe. However, a number of startups operating in the space have either scaled down their efforts or shut down completely, as many venture investors lose appetite for fast delivery.

    Zepto competes with Swiggy, India’s most valuable food delivery startup and one that has committed to investing more than $700 million on its quick commerce service, called Instamart.

    A number of other players, including Blinkit, formerly known as Grofers, are also attempting to win a slice of the market. The SoftBank-backed startup recently agreed to an acquisition offer by larger food delivery firm Zomato, TechCrunch reported earlier, which in recent months has expressed interest in expanding to the quick commerce category, an area where it has historically performed poorly.

    Zomato last month began a pilot of 10-minute delivery of food items in its home city of Gurugram. Zepto is also piloting a service to deliver a range of prepared food items, including hot beverages and snacks within its signature 10-minute promise in select areas in Mumbai, it said.

    At stake is a $45 billion market, according to analysts at Sanford C. Bernstein. In a report earlier this year, the firm’s analysts reported that India is leading other global markets in the adoption of quick commerce.

    The analysts said customers’ increasing willingness and ability to a pay premium for superior quality products and the growing market for home delivery have contributed to the growth of quick commerce in the country.

    The average size of an order placed on an instant delivery service is currently about $6 in India, compared to $12 to $15 for traditional online grocery orders, they said. “But recent cohorts have shown improving stickiness, with basket size increasing with increase in usage. Quick commerce models have seen improving monthly order frequency (mature cohorts at 3-4 times a week, with healthy AOV of 400-500 Indian rupees). Quick commerce players are focused on driving a high frequency basket which will drive better economics,” they added.

    For Zepto, instant grocery delivery is just the beginning in a decade-long journey ahead, said Palicha. Though he declined to reveal the startup’s audacious plans for the future, he said it’s fair to assume Zepto will expand to categories beyond grocery in the long-term, especially those that are currently underserved by giant e-commerce players.

    The startup plans to expand to an additional 12 to 20 cities in the next 12 months and set up a few hundred more dark stores, which it uses to store inventory. These dark stores are optimized for fast delivery, said Palicha. There, the startup stores the most commonly ordered items and a catalog of SKUs in different price ranges. The startup also plans to nearly double its workforce to 2,000 by the end of this year.

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  • Indian online grocer Zepto secures $100 million investment

    Indian online grocer Zepto secures $100 million investment

    Indian on-demand grocery-delivery service, Zepto, has bagged US$100 million during its Series-C funding, taking its value to US$570 million within five months of its launch.

    Led by Y Combinator’s Continuity Fund, the round included investors Nexus, Breyer Capital, Global Founders Capital and Glade Brook, among others. The Series-C funding follows Zepto’s earlier funding round in which it received $60 million valuing the business at $225 million.

    Zepto was founded by two 19-year-old entrepreneurs, Kaivalya Vohra and Aadit Palicha, who left Stanford last year to develop a solution for instant grocery delivery through a network of dark stores. The 10-minute grocery delivery service is currently available across metropolitan cities, including Mumbai, Delhi, Gurgaon, Bengaluru, and Chennai, with Pune and Kolkata to come.

    “Their attention to detail on the logistics experience is unparalleled and this has enabled them to scale to most major metros in just five months,” said Anu Hariharan, Partner at Y Combinator’s Continuity Fund. “Simply put, we’re confident Zepto will win in this space over the long-term.”

    Zepto will compete directly with local delivery giants, Swiggy and BlinkIt, who have also forayed into the instant grocery delivery sector.

    According to Y Combinator, Zepto’s month–on–month buyer retention rate is 65 per cent. The company has built a network of micro-warehouses, each of which can do more than 2500 orders a day, and are now adding 100,000 new customers every week.

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  • Swiggy India now opens Stores to deliver everyday needs

    Swiggy India now opens Stores to deliver everyday needs

    India’s food ordering and delivery platform Swiggy Tuesday said it has launched ‘Swiggy Stores’ moving beyond its core food delivery segment to provide access to consumers items across multiple categories. The company will deliver from these stores “in categories such as fruits and vegetables, kiranas and supermarkets, florists, baby care, health and supplements among others,” Swiggy said in a statement.

    With the launch of these stores, Swiggy wants to become the one-stop delivery app that enables access to every store in the city, it added.

    “Today’s announcement takes Swiggy to categories beyond food, where we hope to deliver the same level of delightful experiences to consumers for their everyday needs,” Sriharsha Majety, CEO, Swiggy said.

    It is the first milestone in Swiggy’s vision to elevate the quality of life for the urban consumer by offering unparalleled convenience, he added.

    Swiggy Stores will give its merchant-partners unmatched access to a combination of core assets to reach more existing and new customers, the statement said.

    For the delivery partners this will give them access to an additional avenue for income, it added.

    Founded in 2014, Swiggy currently connects consumers to over 60,000 restaurant partners across more than 80 cities.

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  • Restaurant association questions deep discounts on Swiggy, Zomato

    Restaurant association questions deep discounts on Swiggy, Zomato

    The National Restaurant Association of India (NRAI) on Tuesday said it has raised concerns over deep discounting and data masking by food ordering and delivery startups such as Swiggy, Zomato and Ola’s Foodpanda. According to a report, The restaurants’ body said it flagged issues regarding misuse of dominant position, in a meeting with the app-based food ordering and delivery startups.

    “NRAI delivery task force had its first meeting with Swiggy, Zomato, Uber Eats and Foodpanda today (Tuesday). Concerns of the standalone and chain business operators regarding deep discounting, data masking, right to use own logistics, private labels and ad hoc campaigns were put forth,” NRAI president Rahul Singh said in a statement.

    Stating that the “concerns have been well taken”, he said, “we aim to continue these meetings on a bi-monthly basis for communicating feedback from the restaurant industry to the aggregators to ensure a healthy business environment for all stakeholders.” NRAI is the apex body of the Indian restaurant industry, representing over one lakh restaurants across the country.

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  • Food delivery start-up Swiggy raises US$ 1 billion from venture funds

    Food delivery start-up Swiggy raises US$ 1 billion from venture funds

    Leading food ordering and delivery start-up Swiggy has raised US $1 billion (Rs 7,000 crore) venture funds from existing investors led by Naspers, to strengthen its technology and hire talent, it said on Thursday. “Swiggy will use the funds to bring more quality food brands closer to consumers and address gaps in supply through delivery-only kitchens, as well as hire talent and strengthen the technology,” the city-based app provider said in a statement.

    The Series H round of funding, led by Naspers, also includes the participation of existing investors DST Global, Meituan Dianping and Coatue Management.

    The funding round saw the participation of new investors Tencent, Hillhouse Capital and Wellington Management Company, the company said.

    The firm will also use the capital to hire talent, especially for machine learning and engineering roles across mid and senior levels, as well as strengthen its technology backbone.

    “The company will focus on building a next-generation Artificial Intelligence (AI)-driven platform for hyperlocal discovery and on-demand delivery,” it added.

    Inclusive of the latest round, Swiggy said it has raised a total of US$ 1.26 billion (Rs 8,825 crore).

    In June, the food-tech start-up raised US$ 210 million (around Rs 1,500 crore) from multiple investment firms, including Naspers, DST Global in Series G funding and US$ 100 million (around Rs 700 crore) in Series F in February from multiple investors.

    Details of the promoters’ equity holding in their firm after the latest round of funding are not made public by the company.

    “As we add more firepower to our vision of elevating quality of life for urban consumers by offering unparalleled convenience, our global investors also share our purpose and have made a significant investment in our future,” Swiggy’s Chief Executive Sriharsha Majety said in the statement.

    Founded in 2014, Swiggy claims to have 50,000 restaurant partners across 50 cities, including New Delhi, Gurugram, Hyderabad, Bengaluru, Chennai, Mumbai, Kolkata and Pune, and receives about 25 million food orders a month.

    The company, which has over 4,000 employees, reported an operating revenue of Rs 442-crore for fiscal 2017-18.

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  • Swiggy to engage 2,000 women for food delivery

    Leading food ordering and delivery start-up Swiggy on Tuesday said it would engage about 2,000 women as delivery personnel by March 2019. “About 2,000 women will join our delivery team by March next year. Over the last few months, we have been working on training women for opportunities in this growing food delivery sector,” the city-based online food delivery platform said in a statement here.

    By deploying more women as delivery personnel across the country, the company said it aimed to create an inclusive workforce.

    The company engages around a lakh personnel daily to deliver food across 45 Indian cities it operates in.

    Currently, about 60 women are tied up with Swiggy across 10 cities, including Ahmedabad, Kochi, Kolkata, Mumbai, Nagpur and Pune, to deliver food.

    World over, the employment of women as delivery personnel has been meagre.

    “We are creating a women-friendly work environment with a dedicated helpline for any concern, as well as appointing more women in managerial roles,” the company said.

    Swiggy is identifying ‘safe zones’ for women delivery personnel to operate in and will allow them to complete their deliveries by 6 p.m., it added.

    “Since inception, we have seen the potential in investing in logistical prowess, which has helped us in having end-to-end control over the food delivery experience,” Sachin Kotangale, Vice President (Operations), Swiggy said in the statement.

    Set up in 2014, the food delivery platform claims to receive about 20 million orders a month across 45,000 restaurants in 45 cities, including New Delhi, Hyderabad, Mumbai, Bengaluru, Chennai, Kolkata, Gurugram and Pune.

    It raised US$ 210 million (around Rs 1,500 crore) from multiple investment firms, and has so far raised over US$ 460 million (around Rs 3,350 crore).

    The company, which has over 4,000 employees, reported an operating revenue of Rs 442-crore for the fiscal 2017-18.

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  • Swiggy India expands services in 16 new cities

    Swiggy India expands services in 16 new cities

    Food ordering and delivery platform Swiggy Thursday said it has expanded its presence in the country by launching services in sixteen new cities across India. The new cities include Thrissur, Tirupur, Warangal, Aurangabad, Agra, Mangalore, Manipal, Jalandhar, Trichy, Udaipur, Amritsar, Varanasi, Bhubaneshwar, Vellore, Thiruvananthapuram and Kota, Swiggy said in a statement.

    These cities join the 28 cities across India where Swiggy already has presence, it added.

    Commenting on the development, Vivek Sunder, COO, Swiggy said, “One of the reasons for the expansion across the country is because of the strong consumer demand that we have witnessed through thousands of Swiggy app downloads in cities where we were not even present.”

    In just four years, Swiggy has become a household name among Indian consumers by providing them the best food delivery experience in the country, he added. The growing consumer demand in tier 2 and tier 3 cities for quality food, convenience, and easy accessibility are one of the key reasons for the company to enter newer cities. Swiggy said.

    Founded in 2014, Swiggy currently has over 40,000 restaurant partners spread across 44 cities in the country.

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  • Swiggy India expands services in 8 new cities

    Swiggy India expands services in 8 new cities

    The new cities are Dehradun, Puducherry, Mysore, Vijayawada, Nashik, Guwahati, Kanpur and Ludhiana, Swiggy said in a statement.

    The company has partnered with over 1,200 restaurants in these cities, it added.

    Commenting on the development, Swiggy COO Vivek Sunder said, “Expanding to these eight new markets is very important to us”.

    Over the years, Swiggy has played an instrumental role in making food ordering and delivery more accessible, reliable and convenient for consumers across the country, he added. Founded in 2014, Swiggy is an online platform with over 40,000 restaurant partners spread across 27 cities.

  • Deliveroo heads to India

    Deliveroo heads to India

    UK food-delivery startup Deliveroo is preparing to launch in India.

    Valued at US$2 billion, the company is hiring a country head along with a full team, insiders say, according to The Times of India. It will go head to head with local players like Swiggy and Zomato as well as comparatively new entrant UberEats. Ola has also re-entered the category by acquiring Foodpanda from Delivery Hero.

    Founded in 2013 by former investment banker Will Shu, Deliveroo works in 140 cities across 13 countries, including Hong Kong and Singapore.

  • Foodpanda India looking to raise $50m

    Foodpanda India looking to raise $50m

    Rocket Internet-backed Foodpanda India, which last year faced allegations of internal fraud and misappropriation of funds, is reported to be raising fresh capital.

    It has mandated Mumbai-based mid-market investment bank O3 Capital for a US$40-60 million fundraise as it initiates talks with investors, reports the Times of India.

    Foodpanda has already said it is selling its Indonesian business and rethinking its presence across the rest of Southeast Asia.

    “To be certain, we are not looking to exit India,” says Foodpanda India CEO Saurabh Kochar. “We have grown rapidly over the past months while increasing our already positive operating margins.”

    In the past six months, Foodpanda India is said to have had its average daily orders inch up to about 30,000. Swiggy, the market leader, clocks about 45,000 orders a day on average, while Zomato has about 35,000.

    Over the past year, Rocket Internet global head of corporate development Spyro Korsanos has been stationed in India to get the business back in shape, according to an insider.

    Launched in 2012, Foodpanda has a presence in 20 countries.

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  • Google India delivers for food fans

    Google India delivers for food fans

    Working with local partners, Google India has made online ordering and restaurant bookings easy.

    When people use their phones to search Google for nearby restaurants, the search results offer an option to “place an order”.

    By tapping the option, users can choose a delivery service and be taken to its website to complete their order. Users can also make a one-click reservation if they prefer to visit the restaurant.

    Google has partnered with startups Swiggy and Zomato for food delivery, and Bytplus and Dineout for reservations. The services can be used on Google Search and the Google app for both Android and iOS devices.

    “These features are just rolling out and we’ll be adding more partners and evolving the look and feel over time,” Google says in an official blog.

    Earlier, Google Maps stitched in Ola and Uber services on its platform in India, showing fares and riding options from the app-based taxi aggregators.

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  • Foodpanda India ‘likely to close’

    Foodpanda India ‘likely to close’

    Foodpanda India appears likely to be shut down after parent Rocket Internet failed to find a buyer at a bargain basement price.

    It’s the latest chapter for the increasingly troubled Asian operations of Foodpanda which last monthgave up in Vietnam after failing to win market share off rivals and in Hong Kong axed its upmarket spinoff brand Foodora, merging the two businesses into one.

    India’s Economic Times reports Foodpanda is “desperately searching for a buyer” for the troubled Indian business, despite setting the price tag at just US$10 – $15 million.

    “Both Zomato and Swiggy have been approached for a buyout, besides one larger horizontal company. But Rocket is yet to garner keen interest from possible suitors for Foodpanda,” another source told theTimes of India.

    At the end of December, Foodpanda India laid off 300 staff , about 15 per cent of its local workforce, as it faced increasing competition from Zomato. The company said the redundancies were the result of achieving near 98 per cent automaticon of its ordering process.

    The Economic Times reports Rocket’s problems in India are not restricted to Foodpanda.

    “The Samwer brothers-led Rocket Internet’s interest in its Indian portfolio has been waning with most of its flagship firms, including FabFurnish and PrintVenue, being put on the block,” the newspaper said.

    It concluded that if a buyer for the sites cannot be found the company would simply close them.