Swiggy, the Indian food delivery group, is leaning more into groceries and other goods' delivery as opposed to restaurants.
The Financial Times (FT) writes that the aim is to get the advantage over rival Zomato.
According to co-founder Sriharsha Majety, the nonrestaurant food deliveries made up around 25 percent of the company's revenues. But from here on out, Swiggy intends to get that number up to 50 percent in the next few years.
“Some of the businesses are in a really exciting place where they can go from here to the next level. Some of them will be larger than the [restaurant] food-delivery business in the next four or five years,” Majety said. “I want to come back in a few years and talk about the story of a business being larger than food.”
Swiggy's plans, FT writes, show how hard it is in India to build up a profitable food delivery business, as many Indian orders come out to relatively small totals around $5 a piece. The U.S., by contrast, has orders averaging around $30. But online grocery delivery could be a larger opportunity, with Indian residents often relying on smaller, local shops and street hawkers to get groceries. That, according to the report, could see the online sales growing faster.
And analyst Satish Meena, quoted by FT, said Swiggy's approach of branching out of restaurant deliveries was the right move.
“We’ve passed the high-growth period [in food delivery]. It’ll take more time to add more customers and orders,” Meena said. “They have to figure out other ways.”
In July, Swiggy was the recipient of a funding round that drew in $1.25 billion.
For more, see: Swiggy To Invest In Instamart After $1.25B Funding Round
The round, which saw investments from Qatar Investment Authority, Falcon Edge Capital, Amansa Capital, Goldman Sachs, Prosus and Accel, among others, sees the company valued now at $5.5 billion. Majety was quoted as saying the business had rebounded since its initial drop because of the pandemic.
