For all the foodies, what makes you happier than to have your favorite food from your favorite hotel, at any time and at any location. In this fast-moving world, no one now prefers to go out and wait at a restaurant to have their food.
Swiggy changed all these issues. SWIGGY – An on-demand food delivery app, from which you can order your favorite food and can get your food at your doorstep, just with few taps.
Know more about Swiggy’s business model and how they make money.
Hyper-local On-demand food ordering is the business model used by Swiggy. It uses innovative technology and works as a bridge between customers and restaurants.
This Swiggy application allows users to order food through their mobile app from the customer’s nearby restaurants and delivers at their doorstep. A huge list of menus and restaurants are listed in the app to select and order. Swiggy also has its own delivery partners apart from accumulating restaurants. They deliver picked orders in less than 30 minutes.
Swiggy operates as a dual-partnership-based model, due to this restaurants also get benefited. Once the orders are placed by the customers, the restaurants receive those orders, prepare food and deliver it to the delivery person. By this, the restaurants don’t need to use their own delivery person to deliver food. All the Swiggy delivery person receives the order once the order is placed by the customers. After accepting the order they deliver it to their respective location.
The customers of Swiggy are those who don’t wish to go out to a restaurant to have food. People who order food from their location and get delivered to their doorstep are the principal customers of Swiggy. Their recent business expansion includes customers who order and get other products like gifts, groceries, electronics, and much more. Some other stores currently available in Swiggy are V.M Retail, Best Basket, Super Marche, Garg Dastak.
Swiggy’s main value propositions are their efficient online payment and no-restriction food order policy.
There is no minimum order requirement in Swiggy, customers can also order food for less than 100.Rs and this is one of the reasons to get around 14 million orders per month.
Easy access to end customers is one of the main value propositions that are offered to the restaurants on the Swiggy platform. The operational cost of Swiggy’s partnered restaurants can save upto 25%.
Swiggy also delivers medicines, gifts, groceries to customers’ doorstep.
SWIGGY GO – It offers to pick up and delivery services like lunch boxes to kids, parcels, office documents, packages to customers.
8 different payment methods are provided by Swiggy for its customers and that can be categorized into 3 ways.
- Debit and Credit card payment options
- Cash – On- Delivery
Swiggy has around 20,000 restaurant partners and 45,000 delivery personnel involved in delivering food. Swiggy has around a million downloads, operating in 8 cities.
It provides 24/7 customer support to its customers and to its partnered restaurants, it has a more positive customer relationship. Reviews and rating systems to stay in touch with their customers and to get their feedback and active social media pages to respond to their customers promptly.
Swiggy’s main resources are local partners. Their human resources are another few resources who are managing technical operations and administration.
Mobile applications, Digital Marketing, and websites are the channels of Swiggy. Its application is available both on iOS and on the Android platform.
• Creating a partnership with retail shops and customers
• Attracting customers and managing customers orders
• Hiring suppliers and delivery providers
• Managing payment process
• Building IT infrastructure and updating systems
• Managing technical operations
• Handling customer queries, reviews, and feedback.
Swiggy’s Key Partners
Restaurants – Restaurants who wish to provide their customers food delivery services with on-demand food apps. Swiggy partnered with other shops like groceries, pharmacies, those who wish to offer their products as swiggy’s partner.
Grocery stores such as Best Basket, Garg Dastak, Sodhi Super Marche are some of the Swiggy partners.
Swiggy’s recent partnership with Instagram allows it to share food order stickers with customers. Users can also order food by tapping on the stickers.
Delivery Providers – Delivery persons can be full time or part-time workers who wish to work. It pays Rs. 4 for the delivery person for the first 4 km, then pays Rs. 6 per km. Apart from this, they get paid additional Rs. 20 in unseasonal weather. Based upon their performance incentives were also given to them.
Swiggy’s major cost sources are as follows,
Cost of website and mobile app development
Payroll expenses for Swiggy’s delivery partners and employees.
Both running and maintenance cost
Advertising, Marketing, Admin Costs
Promotional offers and benefits to customers charges
Refunds, returns, and other expenses.
Swiggy’s Revenue Streams
How Swiggy makes money? In order to get a definitive answer, Swiggy’s revenue model needs to be analyzed. As Swiggy expands its operations and business strategies every day, the revenue system is also increasing.
There are currently 6 revenue streams through which Swiggy is making money.
1. Delivery charges – The first type is obtained from the customers. On orders below Rs.250, a nominal delivery charge of about Rs. 2o to 40 is charged from its customers. These delivery charges will be increased on unusual weather and on high orders.
2. Commissions – The second type is in the form of commissions. Swiggy collects commissions from its partnered restaurants. For every order placed using Swiggy’s app or website, the restaurant needs to pay around 15 to 25%.
3. Advertising – 1. Listing of restaurants: By giving priority to the list of available restaurants, Swiggy charges from its partnered restaurants. Each restaurant needs to pay if they want to be listed higher in the list. 2. Promotional Banners: Swiggy promotes various restaurants through promotional ads on their mobile app. Through this advertising, it charges from the restaurants.
4. Swiggy Access facility – Swiggy offers ready to use kitchen spaces for the restaurants in areas where they don’t function. It is expanding this cloud kitchen model and expecting around 25% revenue in the upcoming years.
5. Swiggy Super – It is a membership subscription program for its customers. It offers unlimited free delivery of all food orders which is above Rs.99.
6. Swiggy Go – Swiggy Go is an instant pick-up and drops services. It helps users to pick up and send anything to and from various locations.
Swiggy is one of the leading online food delivery companies. Through its innovative business model, it changed the landscape of the food and restaurant industries. Its success is due to its live tracking, fast deliveries, easy access.
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