Business Model of Swiggy and How Does Swiggy Makes Money is elaborately explained in this article. Every food lover’s dream is to get their favorite recipes delivered from their most adored restaurants in town that can be personalized in a limited time. Well, this might be too much to ask for, but it was just before Swiggy came into the frame. Established in 2014, Swiggy is considered India’s most popular and largest online food ordering and delivery company. Business Model of Swiggy focuses on providing online ordering, restaurant quest, and table reservation services.
In this post, we will look at the Business Model of Swiggy and try to understand the reasons for its success. We ‘re also going to dive deep into Swiggy’s revenue generation streams to find out how Swiggy makes money.
So, you ‘re interested to learn more about the Swiggy Business Model to get some inspiration? So let’s get started. Let us see how Swiggy is trying to fulfill every food lover ‘s dream with a well-organized, highly personalized, efficient, and adept business model.
Founded by three friends Trio — Nandan Reddy, Rahul Jaimini, and Sriharsha Majety — Swiggy is an online food ordering service and food delivery service.
It helps customers to order their favorite dishes from their favorite restaurants and deliver the food to their doorstep in just 30 minutes. Unlike other food ordering companies and suppliers, they have their delivery fleet and this is the most important reason for their fast-paced success.
Within five years of its establishment, Swiggy became the unicorn and the fastest Indian company to do so.
Main activities channeled by the Swiggy business model include partnering with different food shops and retail stores, managing delivery and payment options, and hiring delivery providers and suppliers.
Channels that help Swiggy channel its business model are mobile phones, websites, and digital marketing. The different value proposals of its framework include efficient delivery of food with no restrictions on orders, no minimum order requirements, and an easy online payment system with different payment options and personalized user experience.
Customers who are the main target in the Business Model of Swiggy
Business Model of Swiggy focuses mainly on those people who are not willing to visit restaurants but want to get the food at their convenience. Swiggy also targets users who enjoy ordering food online and getting it delivered to their doorstep.
Plus, all those people who are willing to consume some tasty food at any specific place without going through the restaurant procedures are customers of the Swiggy business model.
Business Model of Swiggy: How does Swiggy work?
Everyone is curious to know to analyze the Swiggy Business Model and the working of Swiggy. Well, we fully understand that every company’s Business Model serves as the heart of the organization. The same is true of Swiggy. Swiggy entered the market late, but the Business Model of Swiggy is so sustainable that it has emerged from the top.
The business model of Swiggy is focused on hyperlocal on-demand food delivery services. It helps users to order any food and send the recipe to their doorstep.
They can do this by choosing from a range of food/restaurants and menus along with the prices listed in the Swiggy app. But the most exciting feature of the Business Model of Swiggy is that they have their delivery agent convoy. The delivery partners can pick up and deliver food in less than half an hour.
Swiggy Business Model is focused on a dual-partnership arrangement. The main partners are:
1) Partner Restaurants
Restaurants are Swiggy’s first allies. Swiggy features these restaurants on its app, and these restaurants choose to deliver food to their customers. This partnership is open to three parties.
First, customers get orders and get food from their favorite restaurants. Second, restaurants have a chance to increase their sales and customer base. Third, Swiggy receives money by paying the customer’s delivery fee and the restaurant share.
(2) Delivery Partners:
The delivery partners form the second part of the Swiggy partnership. After the restaurants have packed the order, the delivery guy collects the order and delivers it to the customer’s desired location.
Companies such as Zomato have outsourced their delivery services, but Swiggy has its delivery fleet. The ship is known to produce food in 30 minutes. The success of Swiggy can be attributed to its excellent delivery services.
Now let’s unfold how the Business Model of Swiggy works:
Working Processes of Swiggy Business Model
1) Search:
After signing in to the app, the customer enters the location where he wants food to be shipped. After entering the site, he can browse a number of restaurants and choose his favorite food.
(2) Order:
The customer is now completing the transaction. To complete the sale, you must enter a delivery address; you can enter a new address or choose from the saved addresses.
After selecting the address, different discounts provided by Swiggy can be applied. Then he wants a method of payment and orders.
3) Process:
After the customer confirms the order, Swiggy forwards the request to the restaurant. The restaurant accepts the order and begins to prepare and pack it for delivery.
4) Delivery:
All drivers receive a signal when they are in the range. The driver accepts the order and, after collecting it from the restaurants, delivers it to the customer.
Note: After the restaurant accepts the order, the customer can monitor the order using the Swiggy app.
Cost Structure in the Swiggy Business Model
The main factors that play a key role in deciding the cost structure of the Swiggy Business Model are:
- Expenditures on the salaries of its staff and distribution partners.
- Maintenance and running costs of the Swiggy Business Model.
- Developing apps, Developing websites, and other costs associated with the business framework.
- Advertising, Marketing, and administration costs
- These are the main elements of the Swiggy Business Model and how it operates.
Now let’s move on to the revenue model.
Revenue Model of Swiggy: How does Swiggy Make Money?
To decipher Swiggy’s revenue model, we need to look at all the revenue models used by Swiggy to generate revenue.
1) Charges for delivery
This is the type of income that Swiggy generates from customers. All orders below Rs.250 are subject to a delivery fee. The amount of delivery charges depends on the distance of delivery, order demand, and weather conditions.
2) Advertising
Advertising revenue is generated in two ways:
Priority listing of restaurants: Swiggy has a list of restaurants on display. Restaurants are tasked with giving them priority in the list. The food shop has to incur as high as it wants to be displayed at the top of the list.
Banner Promotions: Swiggy charges restaurants to display their banner ad on the web. Promotion by banner advertising means greater exposure of the app and a high probability of receiving orders.
3) Commission
The Commission is Swiggy’s primary source of revenue. It charges a commission from restaurants to generate sales and deliver food through its fleet. This commission depends on the value of the restaurant’s order, location and popularity. It generally varies from 15 % to 25%.
4) Swiggy Access
Swiggy offers ready-made kitchens in restaurants. It enables eateries to set up and operate in areas where they usually do not operate and to bring food closer to customers.
5) Super Swiggy
It’s a Swiggy membership program. Swiggy Super Members do not have to pay delivery charges on orders above Rs.99 and also customers are not required to pay extra during the price increase.
6) Affiliate revenue
It’s a relatively new revenue stream for Swiggy. It has collaborated with a number of financial institutions to issue credit cards. Customers can get offers from these financial institutions if they purchase and use their credit cards.
7) Groceries and Genie
Groceries and Genie are two services from which Swiggy is making money. These two services are recently added to the Business Model of Swiggy. These two services are added in Swiggy Business Model during COVID-19. This has led to increasing the revenue of Swiggy.
This was all about the Business Model of Swiggy. Now, let’s have a final word.
Main Highlights
Despite starting late, Swiggy is giving its competitors such as Zomato and FoodPanda a run for their money. It has emerged as the leading food ordering company as well as the delivery company.
The Business Model of Swiggy is highly innovative and sustainable. Fast deliveries, complemented by techniques such as live order tracking and no limitation on the order bill, make life easier and tastier for every food lover.
Business Model of Swiggy is certainly capable of bringing a significant part of India’s food industry under its umbrella.
What is the most inspiring feature of the Business Model of Swiggy? Feel free to share your views with us in the comments.
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