Bengaluru: Online food delivery service Swiggy has expanded into delivering items such as groceries, fresh produce and other essentials, as India’s fifth most valuable startup seeks to better utilize its army of delivery riders.
The new service, Swiggy Stores, will be part of the same app and will cater to on-demand deliveries across categories, the company said on Tuesday.
The Naspers-backed food ordering platform is currently testing the service in Gurugram. It is expected to offer the service in other top cities over the next few months.
This move will pit Swiggy against Dunzo, BigBasket, Grofers, Amazon’s Prime Now and Flipkart’s Supermart.
“Just like how we democratized seamless delivery across over half a lakh restaurants in the country, we can democratize convenience across millions of other merchants and businesses in our cities," Swiggy chief executive Sriharsha Majety wrote in a blog.
Swiggy’s new offering is expected to boost the company’s order volume as users start ordering other products, leading to higher repeat purchases.
The company’s strategy mirrors its investor Meituan-Dianping’s China business model, which offers deliveries and services across several categories, including groceries, beauty salon, ride-hailing, among others.
Experts tracking the consumer internet space believe that the launch of Swiggy Stores may give tough competition to Dunzo, but it may not make a huge dent on the market share of BigBasket and Grofers.
“Swiggy Stores may be used for impulse purchases, but for planned groceries the user would still turn to a Big Basket or a Grofers," said an entrepreneur in the hyperlocal delivery space, requesting anonymity. “However, considering the large user base Swiggy has, it may give some trouble to Dunzo, as it’s not present in as many cities currently."
According to two industry executives, Swiggy’s daily food delivery orders stood at 600,000-700,000 as of end December across more than 80 cities. In contrast, Dunzo, which is present in six cities, serves more than 15,000 daily orders, according to their estimates.
Swiggy is also heavily-funded. The company raised $1 billion a few months ago in a financing round that valued the startup at about $3.3 billion. Google-backed Dunzo, on the other hand, recently raised $3.1 million in a series C round, according to regulatory filings.