Amidst the bustling streets of Bangalore, Sriharsha Majety and Nandan Reddy founded Swiggy, setting out to revolutionise India's food delivery landscape, starting with just 6 delivery executives and 25 restaurants. Fast forward to now, Swiggy is valued at $15.1 billion. Dive in for some amazing insights on Swiggy’s innovative business model.
Picture this: You're lounging on your couch in your favourite pajamas, binge-watching the latest hit series, when suddenly, your stomach growls louder than a Game of Thrones dragon and you realise there's nothing but a sad, lonely tomato in your fridge. 🫤
Enter Swiggy - the food delivery aggregator who is here to save the day. Whether you are craving gourmet sushi or just want a burger that doesn't taste like cardboard, Swiggy’s got you covered.
Ever wondered how this food delivery marvel makes it all happen? Buckle up as we dive into Swiggy's innovative business model - the perfect blend of technology, logistics, and a dash of genius. 🚀
In the bustling streets of Bangalore in 2014, two ambitious minds, Sriharsha Majety and Nandan Reddy, embarked on a mission to revolutionise food delivery landscape in India with Swiggy. Despite the crowded market and initial skepticism, they aimed to disrupt the traditional restaurant-takeaway model by promising rapid, reliable deliveries.
Their journey began with Bundl, an e-commerce logistics startup, which they had to shut down within a year due to tough competition from giants like Flipkart & eBay. Learning from this, they saw a new opportunity in hyperlocal food delivery. Partnering with Rahul Jaimini, a tech genius from Myntra, they founded Swiggy in August 2014.
Swiggy’s Founders
Starting with 6 delivery executives and 25 restaurants in Bangalore's Koramangala, Swiggy set out with a bold promise: to deliver food within 40 minutes.
Swiggy's competitive edge laid in its promise for fast, reliable delivery. While rivals like Zomato and Foodpanda focused on restaurant listings, Swiggy invested in its fleet of delivery personnel, ensuring a seamless experience for both restaurants and customers. This strategy paid off as Swiggy rapidly expanded to 40 cities across 9 states. 🤯
By 2015, they were partnering with over 100 restaurants and managing more than 70,000 orders monthly. Their big break came when they secured $2 million in funding from Accel and SAIF Partners, allowing them to expand.
By 2018, Swiggy became one of India’s fastest startups to achieve 'unicorn' status. 🦄
Today, Swiggy has grown to:
Operate in 600 cities 🏙️
Having 2,72,000+ restaurant partners actively engaged each month. 🤝
Having 4,00,000 active delivery partners. 🛵
Having 24Mn+ MAU 🤳
Hold a market share of ~45%. 🚀
Generate ₹8,265 crore in revenue (FY23). 💰
Swiggy’s valuation has surged to $15.1 billion, up from $12.1 billion in December 2023. The company is now gearing up for an IPO, aiming to raise $1.25 billion (which includes $450 million in new shares and $800 million from existing investors) marking a bold step into the public market.
From delivering just 35 orders in its first month to handling over a billion orders, Swiggy’s journey is a testament to innovation, resilience, and the power of an unwavering vision.
Swiggy’s Competitive Advantage (MOAT) 📈
1. The Magic of Integration ✨
Swiggy is clever; it decided to pack food delivery and grocery shopping into one app, making life easier for its users. Think of it like this: You’re on Swiggy ordering some pizza, and while you’re waiting, you remember you need some bread for breakfast. No problem! Just slide over to the grocery section within the same app and boom—bread is on its way.
Zomato, on the other hand is fragmented in its approach - It wants you to download a whole different app if you want to order groceries. It’s like being told you have to switch TV channels to watch the rest of the movie. It’s a hassle, and honestly, who’s got the time?
Plus, Swiggy just needs to tap you on the shoulder while you’re ordering your biryani to suggest, "Hey, maybe get some milk too?". Zomato, on the other hand, has to first convince you to even get Blinkit on your phone. Who wants that extra chore?
2. The Shared Fleet Superpower💥
Now, let's talk about Swiggy’s delivery fleet. They’ve got it all figured out—they pick up your burger, then stop by the grocery store to grab your veggies, all in one trip. It’s like having Batman deliver your dinner and groceries at the same time—pretty cool, right?
This not only makes Swiggy faster and more efficient, but it also helps them save money. Why? Because they don’t need separate fleets for food and groceries—same drivers, same bikes, fewer costs. Plus, Swiggy gets to brag about how their super-efficient, AI-powered fleet allocation system is saving the world one delivery at a time. It’s the kind of tech-y jargon that gets investors excited.
3. First Mover Advantage 🥇
Before you roll your eyes thinking, “Wait, how can you call it a "first-mover advantage" when Zomato started in 2008 and Swiggy in 2014?” - hear me out.
Imagine you’re racing in a marathon. The first runner to hit the track has a clear advantage—they’ve got a head start. This is what we call “first-mover advantage”—the benefits a company gets from being the first to enter a market.
Now, think of Swiggy and Zomato in the food delivery race. Zomato started in 2008, long before Swiggy, and was already well-known for its restaurant listings. But when Swiggy launched in 2014, it wasn’t really about being first—it was about being smarter and more efficient in a crowded market.
While Zomato and other early players like Foodpanda were mostly connecting customers to restaurants and leaving the delivery to either restaurants or third-party logistics providers, Swiggy decided to manage the entire delivery process themselves by building a super-efficient delivery network with its own riders, tracking every order closely, and ensuring it reached you quickly, no matter the weather.
This hands-on approach made a huge difference.
💡
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Our members are top founders, product & marketing leaders from 2,400+ internet companies like Google, Canva, CRED & Netflix.
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Over 35% of members are founders & are able to hire growth teams to scale revenue for their companies while operators are able to get into breakout leadership roles.
Imagine India’s food services market as a gigantic, ever-expanding thali (that’s a platter full of food, for those not in the know). Right now, it’s worth ₹5.5 lakh crore, but by 2030, it’s expected to grow to a whopping ₹9 lakh–₹10 lakh crore. That’s like adding more and more delicious dishes to the thali every year!
And the most exciting part? A massive slice of this feast—more than one-fifth of it—will be served straight to your doorstep through online food delivery.
Food Service Market in India
But How Did We Get Here? 🤔
Let’s rewind a bit. Remember the days when ordering food was something you did on special occasions? Fast forward to today, and it’s no longer just about celebrations.
Currently this number is at five times a month and is expected to increase to 7–8 times a month by 2030. It’s becoming more about convenience, just like in places like the US and China, where people eat out 25–30 times a month. That’s a massive shift!
And this shift is happening fast. The food services market, which includes both dining out and ordering in, is growing at a compound annual growth rate (CAGR) of 10-12%.
By 2030, online food delivery alone is expected to swell up to ₹2.12 lakh crores, making up a hefty chunk of the overall food services pie.
Who's Eating All This Food? 🍲
Now, let’s talk about the people at the table. By 2030, the addressable customer base—meaning the number of people likely to order in or dine out—is expected to reach a whopping 45 crore. That’s nearly the population of the entire United States! What’s driving this growth?
Cause
Aspect
Metric
Urbanisation
Consumption in top 50 cities
70%
Increase in disposable incomes
Consumption by upper-middle and high-income segments
70%
Increase in Gen Z & Millineal population
Consumption by Gen Z and younger population
40%
Digitilization
MAU for top delivery platforms in 2023.
50 Million+
Online Food Delivery Market 📱
Now, let’s zoom in on one part of this thali that’s growing faster than the rest—online food delivery. Think of it as the hot favourite dish that everyone keeps going back for.
This segment is expected to grow at an impressive 18% CAGR, much faster than the overall market.
📌
There’s a 40%+ YoY growth in cloud kitchens over the periods of 2019-2023.
As people look for fast, convenient meals, these formats are becoming the go-to choice.
Right now, about 12% of the market is online, but by 2030, that number will rise to 20%.
The online food delivery scene in India has exploded, growing 2.8 times faster than the overall food services market between 2019 and 2023, thanks in part to the pandemic.
Food Consumption in India
Quick Commerce Market 🏍️
Think of a young entrepreneur in Bangalore, juggling a startup and a social life, with no time to shop for groceries. Or a busy mom in Mumbai who realises she’s out of dinner ingredients after a long day at work. In these moments, Q-Commerce swoops in like a superhero, delivering what they need almost instantly. It’s the new normal, making life easier for millions in bustling cities.
Quick Commerce GMV
Q-Commerce in India isn’t just growing—it’s exploding. Last year, the market grew at an astonishing 70-75%, outpacing traditional e-commerce by 5X.
And this rapid growth is set to continue, with the market projected to expand by 75-85% in FY25, reaching a Gross Merchandise Value (GMV) of around $6 billion.
📈
What’s Driving the Growth?
More Users, More Often: The number of Monthly Transacting Users (MTUs) surged by over 40% in FY24, with people now ordering nearly 6X a month, up from 4.4X in FY21.
Bigger Orders: As people get more comfortable with Q-Commerce, they’re spending more, with Average Order Values increasing by over 15% in FY24. Event-driven shopping and a wider range of products are driving this trend.
Metro Dominance: About 90% of Q-Commerce activity is concentrated in major metro cities, where the demand for quick delivery is highest.
The Future of Q-Commerce
The growth spree isn’t slowing down anytime soon. By FY26, Q-Commerce is expected to reach 20 million MTUs, with 5 million new users joining next year alone.
Existing users are also predicted to spend 20% more, as they embrace new products and services offered by Q-Commerce platforms.
To meet this demand, companies are planning to open 500 new dark stores (local fulfillment centres) in the top 30-50 cities, enhancing delivery speed and efficiency.
However, expansion into smaller cities will take more time and may require new strategies, possibly leveraging local Kirana stores for fulfillment.
Competitive Landscape 🥊
Food Delivery 🛵
The online food delivery market has been dominated by the big two—Swiggy and Zomato—for a very long time. However, there are still a number of well-performing minor players to consider. Swiggy currently has 14–16 million monthly transacting users, compared to Zomato's 18.6 million.
To make the comparison easier, here’s a breakdown of how the food delivery players in India stack up across the Accessibility, Affordability, Assortment and Quality parameters using the AAAQ framework.
1. Accessibility: Speed of Delivery
Delivery time. The lower the time of delivery, the higher the accessibility.
Platform
Average Delivery Time
Rider Fleet
Number of Cities Covered
🍽 Swiggy
40-45 minutes
350K+
580+
🍅 Zomato
40-45 minutes
470K+
1000+
🍕 Domino’s
< 30 minutes
12K+
275+
🍔 McDonald’s
35-45 minutes
3K+
40+
🥑 Eat.Sure
N/A
N/A
50+
🍗 KFC
45-60 minutes
3.5K+
130+
2. Affordability: Cost of Delivery
The cost of the food. The lower the cost of food, the higher the affordability
Platform
Average Ticket Size
Surge Pricing / Delivery Fee
Heavy Discount
🍽 Swiggy
Rs. 350-400
Yes
Yes
🍅 Zomato
Rs. 350-400
Yes
Yes
🍕 Domino’s
Rs. 400-500
No
No
🍔 McDonald’s
Rs. 350-450
No
No
🥑 Eat.Sure
N/A
N/A
Yes
🍗 KFC
Rs. 500-600
No
No
3. Assortment: Variety of Options
The number of restaurants/food choices offered. The more the number of restaurants, the higher the assortment.
Platform
Number of Restaurants/Outlets
🍽 Swiggy
250K+
🍅 Zomato
300K+
🍕 Domino’s
1500
🍔 McDonald’s
300
🥑 Eat.Sure
300+
🍗 KFC
675+
4. Quality
The number of restaurants providing food with high-quality ingredients. The more the number of such restaurants, the higher the quality offered.
Platform
Focus/Control on Ingredients
🍽 Swiggy
⭐⭐⭐
🍅 Zomato
⭐⭐⭐
🍕 Domino’s
⭐⭐⭐⭐⭐
🍔 McDonald’s
⭐⭐⭐⭐⭐
🥑 Eat.Sure
⭐⭐⭐⭐
🍗 KFC
⭐⭐⭐⭐⭐
Market Share
Market Share in terms of Active Users
💡
GrowthX is an invite-only club for ambitious founder & growth leaders.
Our members are top founders, product & marketing leaders from 2,400+ internet companies like Google, Canva, CRED & Netflix.
The GrowthX Membership is built on 3 core pillars:
First, learning experience
Learn the science of revenue-led growth with frameworks actionable the next Monday morning.
Second, curated community
access to a safe space for you to soundboard anything that is stressing you at work.
Third, professional outcomes
Over 35% of members are founders & are able to hire growth teams to scale revenue for their companies while operators are able to get into breakout leadership roles.
IPO bound Swiggy, made ~₹8265 crores in operating revenue in FY23, which is a whopping 40% increase from what they made last year.
So let’s breakdown the revenue model of Swiggy.
1. Food Delivery
Swiggy’s food delivery business remains the cornerstone of its revenue model - with contributing 81% to the over all revenue. But it's not just about delivering food—Swiggy has woven a network of revenue streams within this segment.
Platform Fees: Swiggy introduced a platform fee that has seen a 20% increase this year - currently standing a ₹6 per order. With the food delivery industry processing over 1.5 million orders daily, Swiggy's share is substantial, making this fee a crucial revenue contributor.
Restaurant Fees: Partner restaurants pay a commission, typically ranging between 20-30%, to be listed on Swiggy.
This fee structure, while essential for Swiggy’s revenue, has been a point of contention among restaurant partners, especially with the additional pressure from Swiggy’s advertising revenue ambitions.
Growth in Orders and Value: Swiggy’s food delivery business has experienced double-digit growth, fueled by a higher average order value and an ever-expanding user base. This growth is pivotal as Swiggy eyes an IPO, with projected revenues approaching INR 10,000 Cr in FY24.
2. Instamart
Swiggy’s quick commerce arm, Instamart, has quickly become a powerhouse, complementing its food delivery business by contributing 17% to the revenue.
Order Volume: Instamart has seen a surge from 4,00,000 daily orders in March 2023 to nearly 5,00,000 orders per day, showcasing the increasing consumer preference for quick commerce.
Revenue and Growth Metrics: In FY23, Swiggy generated ₹3,221.4 Cr from Instamart, a 39.7% increase from the previous fiscal year.
The average order value has risen by 20% to around INR 460, reflecting the larger basket sizes and improved customer retention.
Swiggy’s Revenue Model
3. Others
Dineout and Restaurant Services: In May 2022, Swiggy bought Dine-out from Times Internet in a $120 million all-stock deal.
Swiggy’s acquisition of Dineout has expanded its footprint into the dining out segment, offering restaurant bookings and exclusive offers, further monetising its relationship with partner restaurants.
Hyperlocal Courier Services (Genie): Swiggy Genie allows users to send packages across town, adding a new dimension to Swiggy’s service offerings and tapping into the gig economy.
Advertising Revenue: A growing revenue stream for Swiggy is advertising. In 2023, Swiggy’s advertising business hit an annualized run rate of INR 1,000 crore, contributing to around 10% of its total revenue.
The metric used to gauge this success is the ratio of ad revenues to Gross Merchandise Value (GMV), which for Swiggy stands at 3-3.5%. This means that for every ₹100 of GMV, ₹3-₹3.5 comes from ads—a significant figure given the scale of Swiggy’s operations.
One Membership & HDFC Credit Card: Swiggy boosts its revenue model through Swiggy One membership, offering exclusive discounts and benefits, and the Swiggy HDFC Bank credit card, driving customer loyalty and increasing transaction frequency.
If you want to understand as to why the Swiggy HDFC partnership is such a great GTM, checkout this GrowthX Insider video 👇
Marketing and Intelligence Tools: In July, Swiggy has launched a comprehensive suite of marketing services designed to help restaurant partners boost their brand visibility across social media platforms like Facebook, Instagram, and WhatsApp.
🛍️
These services include influencer marketing, social media ads, and WhatsApp marketing, all tailored to drive traffic directly to the restaurant's menu pages on the Swiggy app.
Growth Model
A member from GrowthX community worked on the growth model project for Swiggy.
You can also join the membership to solve growth challenges organically, connect with professionals in business, marketing, product, and more.
Scale your revenue and expand market share with our structured approach.
We’ll be using those insights to breakdown the Growth Model for Swiggy.
With this, let’s deep dive into the insights our member has gathered from their stint!
ICP
Persona
Demographics
Goals
Values
Behaviour
Needs
Priya and Raj - The Newlywed Nest-Builders
Mid to late 20s, Tier-1 city, Rs. 30-40LPA combined income, working professionals
To be fully settled, raise a family with ease
Price consciousness, convenience
Spends a lot of time at home, cooks themselves, orders food occasionally
Convenient and affordable food delivery options, recipes, and tips for optimizing food spend
Arjun - The Upmarket Craver
Working male, 30s, Tier-1 city, Rs. 30-50LPA
Satiate cravings without breaking the bank
Premium brands, affordability
Orders in to satiate cravings, price conscious
Affordable premium food delivery options
Harshit - The Order-In Addict
Early to mid 20s, new city, male, 8-15LPA
Figuring out life
Premium brands, convenience
Orders in daily, price conscious on a per order level, spends on premium brands
Affordable food delivery options, help with budgeting and saving money, advice on career and life goals
Rohit - The Carefree Bachelor
Mid to late 20s, migrant to city, male or female, 18-25LPA, white-collared professional working in middle/senior leadership positions
Career progression, upskilling, experiences, financial freedom, work-life balance
Convenience, taste, quality, variety
Orders because they enjoy eating quality food, also uses other food arrangements like cooks or meal plans
On-demand food delivery with ample choice and ability to try something new
Prioritisation of ICPs via Prioritisation Framework
Basis the ICP Prioritisation framework, Persona 3 and Persona 4 from the above list have been prioritised. The reasoning for the same can be found in the table below.
Parameter
The Order-In Addict ✅
The Carefree Bachelor ✅
Adoption Curve
ㅤ
ㅤ
1. Need for Product
High
Medium-High
2. Awareness of Product
High
High
3. Willingness to Try?
High
High
Overall
High
High
Frequency of Usage
High
Medium-High
Appetite to Pay
High
High
TAM
High
Medium
Distribution Potential
High
High
ICP SUMMARY
Persona
Harshit - The Order-In Addict
Rohit - The Carefree Bachelor
Demographics
ㅤ
ㅤ
Age
26
27
Marital Status
Single
Single
Gender
Male
Male
Location of Residence
Pune
Bangalore
Location of Origin
Jaipur
Indore
Migrant
Yes
Yes
Education Level
Bachelors from Tier 2 Institute
Bachelors from Tier 1 Institute
Employment Type
Full Time
Full Time
Type of Company
IT Services
Startup
Income
60K/Monthly
1.5L/Monthly
Tech Savvy?
Yes
Yes
Living Structure
Alone in fully furnished PG
Personal room in flat with roommates in an upmarket area of Bangalore
Brands
Clothing: Jockey, Levis, Jack & Jones, Raw clothing tailored, Van Heusen, Color Plus, American Eagle
Electronics: iPhone, Samsung wireless, Sony speaker | Clothing: UCB, H&M, Zara, Allen Solly
Clothing: UCB, H&M, Zara, Allen Solly
Electronics: iPhone, MacBook, Airpods
F&B: Third Wave, Smoke House Deli
App Usage
Google Maps to discover
Zomato & Swiggy for food
Instamart + BlinkIt + Zepto for groceries
Majority orders from Swiggy
OTT: Netflix + Prime + HotStar + Punjabi Content
Social Media: Instagram
Blabla car used in Pune - Mumbai
BookmyShow
Food: 15-20K
Rent: 15K
Travelling (Commuting): 3-4K
Ticketing: 1/2K
Shopping: Book once in a blue moon, ordered some gadgets
Savings: 3-5K/Month
Rent: 25K
Utilities: 5K
Commuting: 5K/6
Going out: 15k
Food: 15K
30% of monthly income saved
Mode of Spent
Credit Card followed by UPI
UPI followed by Credit Cards for High Ticket Spends
Time v. Money Prioritisation
Optimise on time but money also plays a very significant role
Optimise for time for low ticket spends, otherwise optimise for money
Type of Consumption
Want based
Mostly need based with some wants
Market Sizing
TAM (Top Down Approach)
Target group aged between 15 - 45 years are more likely to order food or dine out at restaurants.
Hypothesis
The users at the age of 15 have the urge to try restaurant food and therefore they will become the decision influencers in the family while the parent will be the one paying.
By the age of 18 the kids will will be college going and therefore many would be living in hostel which opens up the food ordering use case for them.
The upper limit of the target audience will be 45 as usually people above 45 will become more health conscious with age and therefore may not have the urge to order online. Also, their kids would be more prone to using the Swiggy app for ordering in
Age Bracket
Share
Final Population
Total population
-
140 Crore
Below 15 yrs
26%
36 Crore
Above 65 yrs
7%
10 Crore
Between 15-35 yrs
39% (65% of population is below 35 yrs)
54 Crore
Between 35 - 65 yrs
27%
38 Crore
Between 35 -45 yrs
Half of between 35 - 65 yrs (based on the assumption that majority of the Indian population is young)
19 Crore
Between 15-45 Yrs
(Between 15 - 35 yrs + Between 35 - 45 yrs)
73 Crore
Average family size in India is approximately 4 & 2/4 will be potential buyers in the family.
Life Time Value= $45 per user
Addressable Population= 36 crores
TAM = $16 billion
SAM
Population residing in Tier 1 and Tier 2 cities of India
Hypothesis
This is because Food ordering is dependent on supply and the supply of restaurants is majorly concentrated in Tier 1 & Tier 2 cities. Also, in India the purchasing power is more in Tier 1 and Tier 2 population versus Tier 3 and beyond, for convenience related services like Swiggy. The population in Tier 1 & 2 will be seeking convenience in comparison to smaller Tier 3 & Tier 4 cities.
Serviceable Population = 18 crores
SAM = $8 billion
SOM
Working population who have migrated to Tier 1 and Tier 2 cities for jobs
Hypothesis
The reason being that most of the migrant workforce is in tier 1 and tier 2 cities. 30-40% of the tech talent in India resides in Tier 1 and Tier 2 cities. 60% of the graduates migrate to Tier 1 cities in search of jobs as per Nasscom and Deloitte.
The unmarried section of this workforce does not have family with them and hence are dependent on restaurants/street vendors for their daily meals. The ones married have both the partners working and therefore would either hire cook at home or order from restaurants. These working professionals also has the urge to go out and socialize and therefore are more prone to ordering online for every small and big occasion.
Obtainable Population (40% of SAM) = 7.2 Crore
SOM = 4.2 billion dollars
TAM
SAM
SOM
$16 Billion
$8 Billion
$4.2 Billion
💡
GrowthX is an invite-only club for ambitious founder & growth leaders.
Our members are top founders, product & marketing leaders from 2,400+ internet companies like Google, Canva, CRED & Netflix.
The GrowthX Membership is built on 3 core pillars:
First, learning experience
Learn the science of revenue-led growth with frameworks actionable the next Monday morning.
Second, curated community
access to a safe space for you to soundboard anything that is stressing you at work.
Third, professional outcomes
Over 35% of members are founders & are able to hire growth teams to scale revenue for their companies while operators are able to get into breakout leadership roles.
In the organic searches for "Online Food Delivery" competition has more volume versus Swiggy
While the difficulty rank for Swiggy is higher, having more articles and mentions of "Swiggy Food Delivery" keyword will help increase Swiggy's share of the volumes thereby increasing the app/website landings and also bring down the cost per app/website landing with scale.
This will eventually bring in incremental conversions to the platform at lower CAC
Plan of Action
Publish articles around "Swiggy Food Delivery" to enhance ranking
Response from CX teams on escalations/comments on Quora
2. Product Integrations - Improve user quality through acquisition of premium quality (high LTV) customers. Identify complimentary products/services with premium quality user base - Food compliments well with entertainment and travel. Therefore, below mentioned are some of the platforms where the ICP can be engaged
(i) OTT platforms like NETFLIX and PRIME:
Redirection from the Netflix app/platform and Prime app/platform onto Swiggy to binge favorite cuisines while binge watching content
Whatsapp/PN nudge to users with exclusive offers as they login the OTT platforms to watch content
(ii) Credit Card Rewards Platforms of Top tier/premium cards:
Accelerated rewards on premium credit cards for users making any purchase on Swiggy. Eg: HDFC Infinia, Axis Magnus etc
Exclusive Swiggy offers/gift cards to redeem the earned points
(iii) Travel platforms like MMT:
In app redirection to the Swiggy app for users travelling via bookings on MMT and GoIbibo as the people travelling will have the need to order food or eat at a restaurant
Exclusive benefits like free delivery or special offers for the travelers upon redirection from MMT/Goibibo
(iv) Event platforms like BookMyShow:
For Movie goers, deliveries by Swiggy at the multiplexes like PVR, Cinepolis and Inox
Users can book a meal via Swiggy while they make the booking by BookMyShow
Exclusive DineOut offers in the FoodCourt at the mall by Swiggy n making booking via BookMyShow
Channel name
Time to go live
Tech effort
New users we can get (monthly)
List Swiggy offers in Bank Credit card Reward Platforms
Low
Low
0.2 Million
Travel platforms like MMT, Goibibo
Medium
Medium
0.02 Million
Integration with OTT Platforms
High
High
0.4 Million
Integrations with events platform like Book My Show
High
High
0.2 Million
Incremental Acquisition projected from the 2 experiments 📈
Organic
Product Integration
0.18 million
0.8 million
Onboarding
Job To Be Done Summary
ICP
Financial
Personal
Functional
Harshit - The Order-In Addict
Keep my food costs in check
ㅤ
Ability to arrange food whenever I want without requiring any effort from my end
Rohit - The Carefree Bachelor
Rohit wants to be able to order food from restaurants that offer competitive prices and good value for money.
Wants to eat delicious food
Rohit wants to be able to order food quickly and easily, without having to spend a lot of time cooking or cleaning up.
Activation Hypotheses:
✅
Hypothesis1 - 3 fulfilled orders in the first week with positive validation via user feedback (>4+ stars)
Reason: Fulfilment of 3 orders in the first week means that the customer found value in Swiggy's experience (goals achieved), and experienced an AHA moment which is leading to repeat usage of the platform.
💳
Hypothesis 2 - Addition of credit card on platform with RBI tokenisation complete
Reason: This can indicative of a commitment that the user is making to the platform because they find the process of entering a CVV every time tedious and want to make the process more efficient
💝
Hypothesis 3 - Marking 3 restaurants as favorite in the first month of usage
Reason: Marking 3 restaurants as 'Favorites" means that the user wants to reduce the friction associated with finding those restaurants on Swiggy and wants to simply be able to access them whenever they return thus indicating likely retention and continued usage
👭
Hypothesis 4 - A user who refers a friend to Swiggy within their first 30 days of using the platform is likely to retain on the platform.
Reason: Referring a friend is a social capital expenditure, and one would only do so if they have reason to like the platform.
🚴
Hypothesis 5 - Purchase of a Swiggy One membership within the first 45 days
Reason: A purchase of a Swiggy One membership means that the user intends to amp up their purchases via Swiggy and a cost-benefit analysis that they have conducted reveals that they will save money through the membership
Metrics to be Tracked 💯
Qualitative
App store/play store reviews
Sentimental analysis on Twitter, Instagram and other social media platforms
Quantitative
Website visitor to app download ratio - to be viewed on a cohort level alongside time-intervals (D1/7/15/30)
App Store/Play Store impressions to download ratio - to evaluate efficacy of listing on the store and scope of improvement
Page-by-page analysis of sign-up form to identify where drop-offs are happening
TAT between sign-up and placement of first order on a cohort level
% of users who sign-up and do not place an order within first 15 days (considered to be ghost users)
Cohort-wise bucketing of users basis frequency of weekly orders
D1/D7/D15/D30 retention figures - retention refers to users who have placed at least one order on Swiggy
DAU/MAU on platform - Active refers to users who are placing orders
Number of users by bucketed number of favorite restaurants (1 - 3 | 4 - 6, etc)
Number of order placed by user within D7, D15, D30, D45
Drop-off on ordering flow (add to cart, coupon application, final payment, etc)
NPS for users by bucket of order frequency
Swiggy One subscription rate
Frequency of order by user
Engagement & Retention
Engagement & Retention in terms of Swiggy can be defined as the frequency of product use by user category
Let’s start by defining the Active User: Someone who has placed at least 3 orders on Swiggy within a 15 day period. ⭐️
It is hypothesised that achieving this milestone is indicative that the user sees value in Swiggy and hence has jobs which are being fulfilled via the usage of Swiggy while also serving as a proxy that the user is not using Swiggy in a transitionary phase.
Natural Frequency of Swiggy Food Delivery & Sub-Products
Now that we’ve determined the frequency use case, let’s understand Engagement Framework Determination for Swiggy:
Revenue Based Segmentation
User Type
Casual (Revenue)
Core (Revenue)
Power (Revenue)
Monthly Food Order Frequency
3
8
15
AOV
Rs. 350
Rs. 200
Rs. 250
Monthly Grocery Order Frequency
2
5
4
AOV
Rs. 150
Rs. 300
Rs. 400
Monthly Dineout Frequency
0.5
1.5
3
AOV
Rs. 1000
Rs. 1500
Rs. 1500
Swiggy One Customer
No
Yes
Yes
Total Monthly Revenue
~Rs. 2500
~Rs. 5000
~Rs. 10000
Revenue Potential
Low
Medium
High
Advanced Segmentation
Metric
Hibernating / About to Lose
Sleep / In Danger
Needs Attention
Potential Loyalists
Loyalists
Time on Platform
8+ Months
2 Months
4 Months
6 Months
2 Years
Recency
45 Days
15 Days
9 Days
3 Days
2 Days
Normal Frequency
Once every 10 Days
Once Every Week
Twice a week
2 - 4 Times a week
3- 5 Times a week
User Type
Casual
Casual
Core
Power
Core/Power
Swiggy One Member
No
No
Yes
Yes
Yes
Breadth of Engagement (Features Used)
Delivery
Delivery, Grocery
Delivery, Dinning, Grocery
Delivery, Dinning, Grocery
Delivery, Dinning, Grocery, E-Commerce
Depth of Engagement (Frequency * AOV)
Low
Low
Medium
Medium
High
And the next step after determining the Engagement Framework is to prioritise it 👇
Engagement Framework Prioritisation
Framework Focus
Selection
Reason
Frequency (Number of Orders)
Primary ⭐
Swiggy aims to become an integral part of customers' daily routines by crafting a habit-forming product, ensuring that individuals choose it consistently for their food orders. The key lies in delivering substantial value to customers to establish and reinforce this habitual behavior.
A rise in order frequency not only indicates the product's successful integration into customers' routines but also provides Swiggy with valuable insights into their preferences and culinary interests. This, in turn, facilitates the delivery of more personalized and targeted food recommendations.
In a fiercely competitive market, Swiggy acknowledges the challenge of customers frequently switching between platforms. By encouraging frequent orders, Swiggy aims to cultivate loyalty, recognizing its significance at this crucial juncture to stand out and retain a dedicated customer base.
Breadth (Products Used)
Secondary
Swiggy addresses the needs of users seeking both ready-to-eat meals and essential groceries for home cooking. Instamart stands as the solution to fulfill these diverse requirements, offering a convenient one-stop solution.
Swiggy extends its services to individuals who enjoy dining out. Whether they wish to secure table reservations from the comfort of their homes with exclusive offers or directly access restaurant discounts through Swiggy Dine-out, the platform caters to varied preferences for a seamless dining experience.
Depth - Time & Money
Tertiary
Elevating the order value or the time spent on Swiggy does not automatically elevate the customer's experience. Additionally, there is a cap on how much one can boost the order value, and surpassing this limit is not advantageous, rendering this metric less significant for gauging engagement.
Based on the Engagement Framework that has been prioritised these are some of the product hooks
1. Swiggy Streaks
Goal: Convert loyal users into power users by rewarding consistent usage, increasing brand loyalty.
Increase the frequency of food orders on Swiggy for Harshit.
Strengthen loyalty and encourage continued engagement.
Re-engage users who are at the risk of churning.
Pitch/Content
Enjoy effortless and time-saving meals! Let Swiggy be your kitchen away from home. Order your favorite dishes with just a tap, and save more on every order.
Unlock exclusive benefits! As a valued Swiggy Power User, enjoy priority access to new features, early bird discounts, and personalized perks.
We miss you at Swiggy! Rediscover the joy of hassle-free dining with exclusive comeback offers and personalized recommendations.
Channel
Push notifications + WhatsApp + in-app banners
Swiggy App Notifications and WhatsApp
Re-engagement Emails and SMS
Offer
Exclusive discounts (BOGO) on meal bundles (starter + entree + beverage) for daily orders.
Early access to new features, personalized discounts, and exclusive contests.
Special discounts and a limited-time offer on the next order.
Frequency/ Touchpoint
Bi-weekly reminders with varied meal suggestions.
Monthly WhatsApps and real-time notifications.
Bi-weekly personalized WhatsApps and reminder SMS.
Success Metrics
20% increase in order frequency over a month.
10% increase in Power Users' engagement frequency and feature utilization.
25% reactivation of hibernating users over a month.
Input Metrics
Click-through rates on social media ads, conversion rates on exclusive meal bundle offers.
Open rates of WhatsApps, feature adoption rates among Power Users.
Open and click-through rates of re-engagement emails, redemption rates of comeback offers.
Check Metrics
Survey feedback on ease of use and overall satisfaction with the meal bundles.
User participation in exclusive contests and overall satisfaction.
User feedback on the effectiveness of comeback offers and satisfaction post-reactivation.
Reasons
ICP’s busy lifestyle and preference for convenience make this campaign appealing, aligning with his financial and functional goals.
Power Users have a higher depth of engagement; this campaign aims to enhance their experience further, fostering a sense of exclusivity.
Targeting users who have been inactive for a while, this campaign aims to reignite their interest in Swiggy with tempting offers and personalized attention.
Understanding Retention & Resurrection of Churned Users
Food delivery apps such as Zomato and Swiggy see retention rates of ~15% (blended against loyal and new) by the end of the 4th week post-download. Retention here means that the user places an order on the platform.
The retention rate flattens out at roughy M+4 (4 months post order) at ~7% for Swiggy.
Which Channels drive the best retention?
Channel
Retention Driver
Swiggy Instamart 🛍️
Instamart, offering quick and convenient grocery delivery, enhances retention by providing users with an all-in-one platform for their daily needs. Its integration with food delivery promotes habitual use, contributing to sustained engagement.
Swiggy Genie 📦
Genie's hyperlocal parcel delivery service boosts retention by offering users a versatile solution for quick and hassle-free item transportation. Its reliability and convenience contribute to regular usage, reinforcing user loyalty.
Swiggy Dineout 🍽️
Dineout, facilitating restaurant reservations and payments, enhances user retention by providing a seamless dining experience. Users who regularly utilize this feature are likely to stay engaged, especially with exclusive offers and loyalty benefits
Swiggy One Membership 🎉
Swiggy One, a membership program offering free deliveries and exclusive perks, contributes to retention by providing added value and convenience. Members are incentivized to continue using the platform to maximize their benefits.
Understanding Churn
Churn refers to the number of customers who end their relationship with a company within a given period. In context of Swiggy, this could be in the form of:
Voluntary Churn: Unsatisfactory Food Quality, Limited Restaurant options, High Delivery Charges, Better Discounts and Offers Elsewhere, Poor customer service, Change in Dietary Preferences, Dissatisfaction with App Interface etc.
Involuntary Churn: Technical Glitches or App Crashes, Service Outages or Downtime, Delivery Delays or Unreliable Timing, Payment Failures or Transaction Issues, Quality Assurance Issues, App Unavailability on Preferred Platform, Regulatory Restrictions etc.
These churns could lead to negative actions taken by the users in the form of: Reduced Order Frequency, Downgraded Swiggy One Membership, Decrease in the AOV, Ignored Exclusive Offers, Opting Out of Marketing Communications etc.
In order to retain churning customers, Resurrection campaigns can be held.
Resurrection Campaigns
Campaign Name
User Segmentation
Pitch & Content
Offer
Proposed Flow
Frequency & Timing
Success Metrics
Input Metrics
Check Metrics
Reasons
Win-Back Wanderers
Users with No Orders in Last 30 Days
"We Miss You! 🥺 Enjoy a Special Welcome Back Discount on Your Next Order."
Exclusive discount or cashback on the next order to incentivize a return.
Proposed Flow: Email/SMS notification with a personalized discount code and a direct link to order on Swiggy.
Once a Week for 4 Weeks
Order frequency increase, redemption rate of the offer.
Inactive for the last 30 days.
Increase in order frequency, redemption rates.
Users who haven't ordered in a while may be enticed to return with a special welcome-back offer.
Loyalty Reinforcement
Downgraded or Canceled Memberships
"Unlock Premium Benefits Again! 😊 Rejoin Swiggy One for Exclusive Perks and Free Deliveries."
Rejoin Swiggy One with a discounted or extended membership period.
Proposed Flow: Email notification emphasizing the benefits of Swiggy One, including exclusive discounts and free deliveries.
Bi-Weekly for 6 Weeks
Re-enrollment rate in Swiggy One, order frequency increase.
Users who recently downgraded or canceled their Swiggy One membership.
Re-enrollment rate, order frequency increase.
Encourage users to rejoin Swiggy One by highlighting the value of the membership program.
Discount Devotees Revival
Users Ignoring Exclusive Offers
"Exclusive Offers Await! 😃 Don't Miss Out on Our Special Discounts Tailored Just for You."
Additional discount or special offer exclusive to the user.
Proposed Flow: Push notifications with personalized offers, emphasizing the exclusivity.
Twice a Week for 4 Weeks
Redemption rate of exclusive offers, order frequency increase.
Users consistently ignoring or not redeeming exclusive offers.
Redemption rate, order frequency increase.
Re-engage users who have been ignoring exclusive offers with personalized and enticing discounts.
💡
GrowthX is an invite-only club for ambitious founder & growth leaders.
Our members are top founders, product & marketing leaders from 2,400+ internet companies like Google, Canva, CRED & Netflix.
The GrowthX Membership is built on 3 core pillars:
First, learning experience
Learn the science of revenue-led growth with frameworks actionable the next Monday morning.
Second, curated community
access to a safe space for you to soundboard anything that is stressing you at work.
Third, professional outcomes
Over 35% of members are founders & are able to hire growth teams to scale revenue for their companies while operators are able to get into breakout leadership roles.
A monetisation strategy is a way for companies to generate revenue from its user base by providing additional value according to the usage, willingness to pay and profitability.
In order understand these core points, let’s do a litmus test
Litmus Test
(i) Retention
💡
Retention for new users ~ 9% by Month 1
There’s a 78% drop in retention for new users by the end of Month 1
Retention for Loyal users (Core + Power) ~ 55% by Month 1
Compared to new users retention seems stable at round 55% for loyal users
Loyal users who have been using the app for over 2 months - 7/10 of them transact at least once a week
(ii) Deeper Engagement
Type
Natural Frequency
Breadth
Percentage
Casual
1 x Week
Uses 1 feature - uses Swiggy for food delivery
42%
Core
2+ x Week
Uses 2 feature/products
38%
Power
5+ x Week
Used more than 2+ features/products
20%
Around ~ 58% of the users falls into core + power users
Both Core and Power users tends to have higher frequency and breadth
(iii) Willingness to Pay
Type
How much would they pay for the product ?
Would you pay for this just once ?
Would you pay for it on a recurring basis ?
What would make you pay more ?
Casual
50 - 100
Yes
No
More discounts
Core
100 - 200
No
Yes
Faster delivery, Special discounts , 1+1 offers
Power
100 - 250
No
Yes
Faster agent assigning, Order prioritization, Faster delivery
Litmus Test Passed ✅
Substitute Pricing
Now that it passed the litmus test, let’s understand the substitute pricing for Swiggy
Swiggy Food Delivery
Substitute way
Flexibility to use
Needs physical effort?
Pricing
Time
Swiggy
Very Easy
Low
Medium
Medium
Dunzo
Easy
Low
Medium
High
Odering Food via ONDC
Easy
Low
Low
High
Cooking at home
Hard
Medium
Low
High
Hiring a cook
Medium
Medium
Medium
Medium
Meal subscription
Medium
Low
High
Medium
Going out to eat
Medium
High
Low
High
Swiggy Instamart
Substitute way
Flexibility to use
Needs physical effort?
Pricing
Time
Instamart
Easy
Low
Medium
Low
Delivery via ONDC
Easy
Low
Medium
Medium
Delivery from local supermart
Medium
Medium
Low
Medium
Buying directly from kirana store
Medium
High
Medium
High
Quick commerce competitors
Easy
Low
Medium
Low
Pricing Design
1. Who to Charge? 🧍♀️
RFM Grid
Type
Users
Average Monetary Value
Champions
6,44,280 (15.61%)
66.45
Cannot lose them
90,400 (2.19%)
44.03
Loyal Customers
7,35,520 (17.82%)
32.59
At Risk
6,80,960 (16.50%)
9.01
Need Attention
1,87,960 (4.55%)
5.71
Potential Loyalists
5,11,680 (12.40%)
4.41
About to sleep
2,58,720 (6.27%)
1.80
Hibernating
8,70,600 (21.09%)
1.69
Promising
90,160 (2.18%)
1
New Customers
56,880 (1.38%)
1
Swiggy is a transactional service
Swiggy earns from both side of the network. As direct delivery charges from the users and as percentage commissions from the restaurant.
For monetisation - The best segment to target for is the Champions and Loyal customers. Since these users tend to have high frequency and breadth, its advised that Swiggy go after Champions and Loyal users incase of monetisation. The Champions and Loyal users also tend to have higher trust on the brand than any other segments of user.
2. When to charge? ⌚️
Perceived value of time and efficiency is greater than Perceived price, hence Swiggy can charge its users
3. What to charge? ❓
What can Swiggy charge for: Output. Swiggy can charge when the food is delivered (when the perceived value time is met )
What is the core value proposition and the currency that helps user experience the core value prop?
The core value proposition of Swiggy is the delivery, which saves time and money.
What is the core action that user POV for which the user uses the product?
The core action is when a user is browsing for a cuisine of his choice and it get delivered. Baiscally discovery and wide variety to choose from
4. How much to charge?
System Design
Since Swiggy is a low AOV, high frequency product, we will go for System 1.
The goal is reduce friction and ensure quick checkout.
Checklist
Does your product require a quick buying experience? - Yes
Should the experience for first time buying and repeat buy look different? - Not necessarily
Swiggy’s Expense Breakdown 🤔
Swiggy, the food delivery giant, spent a lot of money in 2023—over ₹12,884 crore! Let’s break it down into bite-sized pieces to see where all that cash went
Buying Goods (Procurement Costs):
Swiggy spent ₹3,381 crore just to buy the items it sells on Instamart, like groceries and other essentials. This cost went up nearly 50% compared to the previous year.
Hiring Extra Help (Outsourcing Costs):
Swiggy spent ₹3,159 crore on hiring additional support, like delivery drivers and staff at their dark stores (those secret places where they stock products). This is a big chunk of their spending and increased by 34% from the last year.
Advertising and Promotions:
Swiggy splurged ₹2,362 crore on getting your attention through ads and promotions. This means they spent INR 28 out of every INR 100 they made on marketing alone!
Employee Salaries (Employee Benefits):
Paying their team cost Swiggy ₹2,130 crore. This includes all their regular employees, and it’s a 25% increase from what they spent the year before.
Order Cancellations:
Sometimes orders get canceled, and Swiggy actually lost ₹139.5 crore because of this, a decline of 11% from ₹156.4 crore in the previous fiscal year.
To sum it up, Swiggy spent ₹155.9 for every ₹100 it earned in 2023. While they made a lot of money, they also spent even more to keep the business running, growing, and grabbing your attention!
Metrics to be tracked 📏
1. Monthly Active Users (MAUs): These are the number of unique customers who place at least one order on Swiggy in a month.
Tracking Method: Swiggy counts each customer based on their registered phone number, so even a single order in a month counts towards this total.
2. Gross Order Value (GOV): It’sthe total value of all orders placed on Swiggy before applying any discounts or promotions.
Components:
Order Cost: The complete price of the food or items ordered.
Delivery Fee: The amount charged to customers for delivery.
Platform Charges: Additional fees paid by customers for using Swiggy's platform.
Packaging Costs: Charges for the packaging of the order.
Taxes: Any applicable taxes added to the order.
3. Average Order Value (AOV): These are the average amount spent per order on Swiggy.
Calculation: It's calculated by dividing the total Gross Order Value (GOV) by the total number of orders. This figure reflects the average spend per customer order.
4. Monthly Active Delivery Partners
Definition: These are the number of delivery personnel who successfully complete at least one delivery in a month on Swiggy.
Tracking Method: Swiggy tracks each delivery partner using their unique identification details, ensuring each individual is counted only once.
Market Opportunity ✅
Swiggy’s Market share currently stands at 45% which used to be somewhere around 52% in 2020.
Given this, Swiggy has a lot of room to explore to get a hold of it’s market share.
1. Enhance Content Marketing
By now, you must've all seen Rohit Sharma's infamous “Ye Se Leke Woh Tak” Swiggy Instamart Ad.
However, Swiggy’s content marketing game is still a little flaccid. Swiggy can significantly boost its visibility through more creative and consistent content marketing strategies. This could include:
Email Marketing: Take inspiration from Zomato’s engaging and witty email campaigns to create personalized content that resonates with different customer segments.
Social Media Campaigns: Create viral, shareable content on social media that aligns with trending topics and events. Engaging user-generated content, contests, and collaborations with influencers can further amplify reach.
2. Target Corporate Clients
Swiggy can tap into the B2B market by targeting corporate clients:
Office Meal Plans: Offer meal subscription plans tailored for office employees, especially as work-from-office trends rise.
Corporate Gifting: Provide corporate gifting solutions, such as gourmet meal vouchers or Swiggy credits, for employee rewards or client gifts.
3. Expand Instamart Through Subscription Services:
Instamart contributed nearly 39% to Swiggy’s revenue in FY23. However, Instamart still falls behind Zomato’s Blinkit in terms of market share.
Recently, In Swiggy’s hometown, Bengaluru, Blinkit surpassed Instamart in terms of sales value.
Swiggy can strengthen Instamart's market presence by introducing subscription services tailored to customers daily and weekly needs.
Customers can customise their subscriptions, choosing the products they need regularly, with the flexibility to adjust delivery frequency and quantities.
This not only enhances customer loyalty by integrating Instamart into their routine but also ensures consistent revenue and increases customer retention for Swiggy.
Challenges 🔪
1. High-Profile Exits and Confidential DRHP Filing
Leadership Instability: Swiggy has recently experienced several high-profile exits, including Sidharth Satpathy, VP of Swiggy Instamart, and Karthik Gurumurthy, the architect of Instamart. This leadership turnover could signal internal turmoil and disrupt strategic continuity, potentially impacting the company’s operations and long-term planning, especially as it prepares for its IPO.
Impact on IPO Perception: The confidential filing of the Draft Red Herring Prospectus (DRHP) for its IPO could raise concerns among investors about the company's stability and governance, affecting the valuation and success of the IPO.
2. Pressure from the National Restaurant Association of India (NRAI)
Restaurant Backlash: The NRAI has previously urged Swiggy’s 5,00,000 members to log out of Swiggy’s Dineout app, citing concerns over the impact of Swiggy's discounts on their dine-in business.
This move echoes the #Logout campaign against Zomato Gold in 2019, where restaurants protested against high commissions and deep discounts. If this campaign gains traction, Swiggy could face a significant loss of partners, affecting its service offerings and revenue.
Eroding Margins: Restaurants have expressed frustration over the high commissions and control that Swiggy exerts over delivery channels, leading to thin profit margins. As restaurants begin to explore alternative platforms, Swiggy could lose market share or be forced to renegotiate terms, which might further compress its margins.
3. Higher Commissions:
Lower Commissions and Direct Customer Relationships: Thrive, a new competitor in the foodtech space, is gaining traction by offering restaurants a platform to take orders directly, charging only a 3% commission compared to Swiggy’s 20-30%.
This lower fee, combined with the ability for restaurants to retain customer data, presents an attractive alternative for restaurants looking to reduce dependency on aggregators like Swiggy.
