What is Swiggy? How does it Work? What You Need to Know

• By Smith Joe
• 20-02-2024
• Trends

In the fast-paced world we live in today, convenience is key. With our busy schedules and limited time, getting food delivered right to our doorstep has become a game-changer. Enter Swiggy, the on-demand food delivery platform that has revolutionized the way we order food. But what exactly is Swiggy? How does it work? And what do you need to know before using it? Let's dive in and find out.

You're eager to dine at your favorite restaurant. You must wait for your table and navigate the modern traffic to the restaurant. Your dining plans are suddenly canceled, and you decide to eat at home instead. You can order food but must pick it up at the restaurant. Eating at home is often more convenient for those who have worked long hours.

There is an app to help you out every time. Brands want to make sure that your meal doesn't miss any part. A brand that is there to help you when hunger makes your patience tested. The brand is determined to ensure you never miss those precious moments. You can keep track of all your important information with just a few taps. Brands are not just concerned with their customers but also their employees. They know that a brand's name can mean a lot.

It's Swiggy. Swiggy aims to surprise your taste buds and bring you happiness. Swiggy's business model is based on this. What is Swiggy?

Swiggy

Swiggy is India's biggest online food-ordering platform. Swiggy was founded in Bangalore in July 2014. It will operate in 500 Indian cities by September 2021. BITS Pilani created Swiggy graduates Nandan Reddy and Sriharsha Majety, who had the brilliant concept of transforming how India eats with hyperlocal delivery. They decided to create a lasting mark in India by bridging the gap between ordering food and getting it delivered. Swiggy is built on the idea of bridging this gap. Swiggy was created to make this revolutionary idea simple for users. Swiggy was the culmination of Bundl Technology, their previous venture. Swiggy has come a long way from an abstract concept to more than 5 lakh installations of its mobile app.

Now that we have discussed who founded Swiggy, when it was founded, and its history, let's continue the story. Let's dive into the inner workings of a. Swiggy has a business model that we should explore in depth to better understand what it is and how it functions.

Swiggy Business Model

Swiggy’s business model relies on-demand food delivery. It aggregates restaurants and organizes delivery partners that deliver food on-demand (in less than thirty minutes).

Bundl Technologies Private Limited, the unicorn startup owned by Bundl, has developed a dual-partnership model to follow in Uber's steps. The partners can be divided into two categories:

• Swiggy Restaurant partners: Swiggy restaurant partners deliver food to customers using the Swiggy website or app.
• Delivery Partners: These partners are the delivery fleet responsible for picking up orders from partner restaurants and delivering them to the end user.

Target Market

Swiggy is a great option for people who like to eat outside but don't want to go out and eat at restaurants. They want their tasty parcels delivered right to their doorsteps, so they can enjoy them whenever they like. These are Swiggy’s main target customers. Swiggy's business has expanded recently, and now people who want to order from local electronics stores, florists, or grocery stores can also use the service. Swiggy's business model is very relevant to the Swiggy target audience.

Swiggy Business Model: Value Propositions

Swiggy has a genuine and adoring following. Swiggy's long-term goals and willingness to learn and grow incrementally make it special. Swiggy offers a variety of benefits. How can you not like it? Swiggy does not have a minimum purchase requirement, so it receives up to 14 million orders monthly. Swiggy gets many orders that are less than Rs 100. It is why it's the most popular food-ordering app. Swiggy believes in its customers and that all else is just a side effect of good business.

Swiggy's success is based on its customer impact. You can place a one-serve order without any extra fees. Swiggy has always focused on its delivery and ease of use. Swiggy's business model is built on this exact principle. The customer is always offered enticing deals. Restaurants will also be able to reduce their operating costs. It is a trusted partner because it provides lightning-fast delivery and real-time trackability.

Swiggy's main activity

Swiggy’s main activities are as follows according to its business model:

• Alliances with retailers, restaurants, and eateries
• Recruitment and supervision of delivery personnel
• Customer Acquisition and Retention
• Manage operations that support delivery and payment processes.
• Complaints from customers and partners are dealt with as quickly as possible.

How Does Swiggy Work?

How Swiggy works is the next question to ask after defining Swiggy and understanding the business model. It is important to understand how Swiggy functions by considering the Swiggy model we have just discussed.

Swiggy provides an online ordering platform that allows customers to order from a list of neighborhood restaurants. The restaurant's delivery staff picks up the orders and delivers them directly to their doorsteps. The swiggy model is based on this exact concept. The simple answer for how Swiggy operates is "by offering a food ordering and delivery solution that links existing neighborhood restaurants to urban foodies in a way that benefits both parties."

Swiggy is an app that allows you to order food from various restaurants. You can also visit the Swiggy site. The restaurant's Swiggy app is used to place an order after a customer has selected a restaurant. The app receives all the details of the order and starts preparing it.

All nearby drivers with their driver applications receive a broadcast signal. The drivers who accept the order can either accept or deliver it. Swiggy has integrated Google Maps API into its app, just like other startups that offer on-demand deliveries. Customers can now see where their order is located and the estimated delivery time in real-time. Swiggy has one of the best business models in the food industry.

Swiggy's revenue model

Swiggy's business model made it a pioneer in India's food service industry. They follow a business model, but they've also started earning money from other sources since establishing themselves.

Swiggy makes money from the sources below.

Commissions

Swiggy charges restaurants a commission of 15% to 25% on the total bill. This commission is charged based on the total amount of the bill, which includes the Goods and Services Tax that has been added to the menu price.

Swiggy constantly attempts to get restaurants to only be found on Swiggy. Restaurants receive benefits like increased visibility and, on occasion, a 2-3% reduction in commission. These tactics, designed to make money, are based on our swiggy model.
The percentage of commission is determined by several factors, including the frequency with which orders are received, the restaurant's location, its reliance on the Swiggy service, percentages charged by other restaurants, penetration by the restaurant into a new area, etc.

Delivery Charge

Swiggy has no minimum order for delivery. The company receives many orders that are less than 100 rupees. The cost of shipping per order increases.

Swiggy began charging small order delivery fees once it had established a stronghold on the market (depending on city-to-city). Delivery charges for orders below Rs 250 are usually around Rs 20. Swiggy can also increase delivery charges during high demand, such as when it rains, on special occasions, or for midnight deliveries in certain markets. It also encourages customers to place orders above the minimum to avoid delivery fees. Swiggy's business model included introducing small changes as the brand grew.

Advertisement

Swiggy started earning advertising revenue using two models: priority restaurant listing and banner promotions. Swiggy's business model relies heavily on advertising.

Apps and websites promote and display restaurants in certain regions. Rates for each region are displayed on the page depending on how visible the restaurant is through the banner.

Swiggy only shares customer data with restaurants, which means that they must rely on an increased level of visibility to generate revenue. Swiggy's commitment to privacy is also a positive aspect of its business model. Swiggy shows its customers a list of available restaurants. The potential revenue has become a reality by charging restaurants a premium for priority listings. The more a restaurant appears on the list, the more it costs.

Restaurants

Swiggy has launched its restaurants. They are displayed prominently on the app and the website, with maximum visibility. The service began in Bangalore and will soon be available in Mumbai and Hyderabad. It is yet another addition to the swiggy model.

Swiggy Access

Swiggy Access is a similar facility to a central base that houses the kitchens of various restaurants, including Swiggy’s private labels. It was launched in 2019, and it's a new service. The cloud kitchen model allows restaurants to establish kitchens even if they aren't physically present.

The first restaurant opened in Bangalore, India, last year. It has expanded to 30 restaurants and 36 kitchens across new cities such as Kolkata, Delhi, Mumbai, and Hyderabad. It is another addition to the swiggy model.

This inter-city concept is expected to revolutionize how Tier 2 and Tier 3 cities are marketed. Access kitchens currently account for approximately 8 - 25 percent of orders in the markets where Access has been launched. Access requires restaurants to pay higher commissions than the current platform average for delivery.

Swiggy Super

Swiggy has launched Swiggy Super - a membership program for customers. It offers unlimited free shipping on orders over Rs 99. It does not use surge prices, which require the customer to pay an amount.

The price of a one-month subscription is Rs 149, and the price for a three-month membership is Rs 349, but there are introductory offers at Rs 49 and Rs 129. Swiggy expects to see a significant increase in revenue from the membership program.

Earnings through Affiliates

Swiggy earns money through affiliate income in addition to its core business practices. Swiggy refers to credit cards for customers. The company partners with banks and financial institutions such as American Express and Citibank to offer credit cards to its customers.

Where is Swiggy’s money going?

Swiggy must spend money to deliver this commendable service and adhere to the Swiggy model. Start by managing and incentivizing the delivery fleet. Costs are determined by factors such as the frequency of deliveries and the delivery partners' profile. The revenue is a large part of what's used to develop and maintain applications and websites. To keep the business going and partners happy, a lot of money is spent on advertising and administrative costs.

Swiggy has many wonders hidden within its name. The swiggy model has revolutionized the food delivery and ordering industry.

Swiggy’s Future

Swiggy is the first aggregator that offers customers free or 30-minute delivery. Only a handful of restaurants in select cities offer this service. It is still a relief for customers who must wait 40-60 minutes before their food arrives. Swiggy is responsible for 70% to 80% of any costs if they fail to deliver their food on time. Restaurants will cover the remaining cost when Swiggy becomes fully operational.

Swiggy has also launched the Swiggy POP, a single-serve meal to save you time. The Swiggy POP is designed for professionals on the move who want to save time and have a mix that will never fail.

Swiggy allows its customers to order meals in advance via Swiggy Scheduled. Customers can place orders up to 48 hours ahead in increments of 30 minutes. Swiggy's frequent orders will enjoy a better experience. Swiggy's business model will continue to grow in the future.

Swiggy could soon have a competitive edge and grow its customer base because of its diverse features. Thanks to its innovative features, Swiggy's growth will be organic, which every company wants.

Conclusion

You now know the swiggy business model and what it is. The swiggy model is truly impressive. It is possible to expand. It is one of the most popular on-demand categories because people always need to eat.

Swiggy has made ordering food a breeze. With its easy-to-use app, extensive restaurant network, and efficient delivery service, it has become a trusted name in the food delivery industry. From browsing through menus to tracking your delivery, Swiggy has everything covered to ensure a seamless experience for its users. So why wait? Download the app, place your order, and let Swiggy take care of the rest.