“We kept talking to consumers last year,” says Vivek Sunder, COO of Swiggy. “We had constant quantitative data in terms of what they were searching for on the app,” he explains, citing search terms Swiggy gathered in the period. “We also did focus group discussions—a bunch of conversations with consumers on a specific topic.”
It’s all part of a conscious evolution for the company. In an interview with us shortly before the lockdown was enforced, company co-founder Sriharsha Majety indicated that Swiggy’s mission was no longer to change the way India eats. “Our mission today is to elevate the quality of life of urban consumers by delivering unparalleled convenience,” he had said unequivocally. With hyperlocal logistics as the engine, of course.
Changing its spots
This change was also communicated to the company’s employees during a town hall in mid-March, shortly before the nationwide lockdown. Swiggy’s founders communicated two sharp messages during the meeting. The primary one was about protecting its food delivery business—focussing on building consumer trust and communicating the measures being taken to keep food deliveries safe, recalls a manager. He asked not to be identified as company policy prevents him from speaking to the media. The second part of their message was about the company’s diversification.
It was a logical step, says the manager. “We have a lot of our fleet roaming around the city. The peaks when the delivery fleet were fully utilised were the lunch hours and dinner hours. Between 3PM and 7.30PM, Swiggy is overstaffed. They don’t have enough orders between the two meal times. So, it makes a lot of sense to do everything hyperlocal.”
The question is: will Swiggy’s greatest strength—food ordering—impede its diversification? “They have to prioritise essentials delivery right now, compared to food delivery because there is a problem in that business,” says an investor in Swiggy. “It’s about how they focus on the new businesses, which may not have otherwise got enough attention because of the food-ordering business.”
Locked down, ramping up
While the number of restaurants on its platform dwindled, so too did Swiggy’s delivery fleet. 240,000-strong at its peak, these numbers have dropped significantly due to the lockdown, though Swiggy declined to offer any specifics. Despite its depleted fleet, Swiggy accelerated its plans to take Genie and Stores countrywide once the lockdown kicked in.
The company also told us that only 25-40% of the restaurants are operating in the 200 cities where they are permitted to be open. This takes a significant load off its fleet of delivery partners. Even with this, though, Swiggy was still up against it when it came to operationalising its new hyperlocal offerings.
Swiggy has already set about deprioritising food delivery. According to reports, plans are afoot to lay off up to 900 employees from its cloud kitchens business. It has also slashed marketing expenses and is no longer footing discounting—a ploy that has helped it scale rapidly—on its platform.