Swiggy, the Indian food delivery service, has made its much anticipated moved into general deliveries today after it announced its new ‘stores’ product.
The move has been speculated since as early as 2017, but recent developments have taken the company closer towards the expansion. Last September, Swiggy picked up delivery service SuprDaily in an acquisition while the company went on to raise a $1 billion funding round in December. That round was led by Naspers, it put Swiggy’s valuation to $3.3 billion and saw Tencent, the Chinese internet giant behind WeChat among others, join as an investor.
Money in the bank? Check. Expertise on the team? Check. Swiggy now seems positioned to make this major move.
Stores will be available within the core Swiggy app, and it will cover fruit and Vegetables, kiranas and supermarkets, florists, health supplements, medicine, baby care products and more.
But the company is moving slowly first out. The initial rollout is a phased one that’s happening in Gurgaon, where it has racked up partnerships with retailers that will cover 3,500 stores in the city. Deliveries are aimed at being an hour or less, and early partners include Le Marche, Guardian Pharmacy and Zappfresh.com, the company said.
This expansion raises Swiggy’s competitive edge with food delivery rivals FoodPanda (which is owned by Ola), Zomato and UberEats by giving consumers more reasons to turn to the Swiggy service. That’s a move that the company will hope can increase revenue and engagement at the expense of the competition, which now includes Amazon.
The move from food to general deliveries mirrors the strategy of Meituan, another Swiggy investor from China. Meituan generates the majority of its business from food but, while it has scaled impressively, it is not yet profitable. Still, it is working with big numbers. The company went public in a Hong Kong IPO last year that raised over $4 billion; it’s current market cap is around $40 billion.
Swiggy co-founder and CEO Sriharsha Majety said in a blog post that the company has long harbored the ambition to expand beyond food.
Starting off in 2014, we envisioned a world where restaurant delivery would be amazing and awesome. A world where you didn’t have merely a handful of restaurants that would deliver. A world without high minimum order amounts, and very importantly, where you didn’t need to call the restaurant every 5 minutes asking the dreaded “ladka nikal gaya kya” question. We envisioned a world where we could democratize 35-minute deliveries to every restaurant in the country and introduce a convenient and delightful food ordering experience for every consumer.
Four years and hundreds of millions of orders later, we can confidently say we bring convenience to the doorstep of consumers across the country. Despite millions of Indians ordering food, we believe food delivery is still in its nascent stages. So, while we continued to build out more magical realities in the food ordering space, a lot of consumers, non-restaurant merchants and retailers were asking us when we would extend this superpower (convenience) to needs outside of food ordering.
With the largest active last mile fleet in the country and a paranoid focus on consumer-centricity, we began asking ourselves the same question. We realized we could bring the food delivery like magical reality and convenience to a lot of other local commerce needs. 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/ businesses in our cities.