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Business News/ Companies / News/  Swiggy turns to hyperlocal

Bengaluru: Food tech unicorn Swiggy has ventured into different hyperlocal categories in a bid to get dormant customers back and give them more reasons to use the app, as food delivery volumes continue to be impacted from the ongoing pandemic.

In sharp contrast, its rival Zomato, which entered the grocery delivery space earlier this year, scaled back its hyperlocal services by June, to focus strongly on its core food delivery business. It has continued its alcohol delivery service though in a few states.

E-commerce firms including Flipkart and Amazon in recent months too taken the same route aiming to bring customers closer by quicker delivery and address a range of needs.

In the last four months alone, Swiggy launched Instamart, its 45-minute grocery delivery service in Bengaluru and Gurugram; started alcohol delivery in non-metros; tied up with bookstores to provide academic books to students in Kerala and West Bengal; launched online stores focusing on pet food, gourmet groceries, wellness essentials, meat deliveries among other things.

Food delivery gross merchandise value (GMV) may have reached 85% of pre-covid levels, but volumes have still not returned to normal. Swiggy, through these micro-pivots and new services on its platform is pegging itself as a convenience solution for hyperlocal needs.

“We want to be the king of convenience in the hyperlocal market, and want to eradicate unnecessary trips for consumers. On the merchant side, we believe India will leapfrog the web application era for offline brick and mortar businesses, leading them to come online on platforms like ours, which rely for logistics and convenience," Vivek Sunder, chief operating officer, Swiggy said in an interview.

Though not in the immediate future, Swiggy may provide logistics-as-a-service to offline businesses, if it chooses to open its APIs, with the strategy being a part of the company’s long-term roadmap.

Swiggy is currently witnessing its GMV return to almost 80% of pre-covid levels in crowded geographies, while its volumes are still hanging at 65%. Though still small in value, its new lines of business can climb to 20% of the platform’s total order volume in the coming months.

Zomato, which aims to go public next year, is betting almost entirely on the recovery of the food delivery business. In a blog post on Wednesday, founder and CEO Deepinder Goyal said the sector is witnessing shoots of recovery with metros like Delhi and Mumbai nearing full recovery.

Swiggy has also merged operations with its premium delivery startup Scootsy, which it acquired in 2018, to provide premium gourmet essentials to customers. With operations only in Mumbai, at present, Swiggy now plans to expand delivery of premium goods to all metros by March 2021.

Swiggy, which launched pan-India grocery delivery in March, will continue to operate Instamart and groceries stores, in tandem, said Sunder. It will also revamp its loyalty programme 'Super' in 2021, as it works to add newer constructs.

“Instamart will offer limited SKUs (stock keeping units) owing to the 45-minute delivery convenience we want to provide customers. Hence, for other important items there are always stores and supermarkets on our platform. We look at groceries and essentials as a hybrid-model between Instamart and individual stores," adds Sunder.

Swiggy may also venture into non-prescription medicine delivery among others.

Among e-commerce firms, Flipkart Quick, a 90-minute hyperlocal delivery service was launched recently in Bengaluru, with Flipkart venturing into categories including fresh fruits, vegetables, meat and milk. Paytm Mall is planning to start same-day hyperlocal delivery in groceries, electronics (including smartphones) and wellness products.

Amazon India also recently entered the online medicine delivery segment and forayed food delivery with Amazon Food in Bengaluru.

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Updated: 24 Sep 2020, 06:58 AM IST
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