A four year-old company with around $465.5 million in funding spread across seven rounds, Swiggy seems to have outgrown being just about basic food delivery. Swiggy’s Srivats TS in an interaction with Shinmin Bali speaks about its expansion to tier II cities, expectations from its membership programme, and more. Edited excerpts:
Swiggy has recently upped its city count with expansion into tier II cities. What is the focus now?
We are present in 22 cities now, having recently launched in Dehradun, Mysore and Pondicherry. Over the last few months, we have realised that there are many people who are aware of the brand and are keen to try it out; this has resulted in the brand’s expansion to new cities. The focus on delivering experiences has held us in good stead. The second part of our focus is, food as a category never goes out of fashion and we have been able to change with consumer needs. This has resulted in us launching Swiggy POP, Swiggy Scheduled and Swiggy Super for consumers, and Swiggy Capital Assist and Swiggy Packaging Assist for our restaurant partners.
Swiggy has recently delisted restaurants following the FSSAI initiative. Why?
We have delisted restaurants that are not compliant with the FSSAI regulation or have poor customer rating. We have also set up an FSSAI assist programme to help non-compliant restaurants to procure their license within the agreed time frame. We are also working with Equinox Labs to ensure that the food is being prepared in keeping with the hygiene standards.
What do your communication spends and RoI look like?
We have always focussed on multiple channels in terms of marketing the brand. In the last five to 10 months or so, following our very first campaign on TV and then the IPL campaign, we saw an increase in brand awareness as well as in business with fresh demand in the newer cities we opened in. For us, 40-50% of overall spends are on the offline channel, around 30-40% on digital and the remaining 10-20% are on remarketing, research, insights, etc. The key metric that we track in measuring RoI is the growth of new users on our platform. Typically, we see anywhere between 30-40% of growth in new users post the conclusion of a campaign.
What are the investments in enhancing Swiggy’s technological capabilities?
The latest round (series G in June) will enable Swiggy to ramp up its supply chain network and expand to new markets, while investing in core capabilities that enhance consumer experience. The company will also double its technology headcount to build robust operations, deep personalisation and connected supply chain systems. We are also investing in data sciences and AI.
What are the expectations from Swiggy Super — your membership programme?
It gives our users unlimited free deliveries from all restaurants. This is a programme where we are looking to bring in a lot more action in the next few months for our core users. We would like 50-70% of our consumer base to become a part of the subscription programme over the next year or so. Swiggy Super will help us to grow our repeat rate to 30-40%.
Have Capital Assist and Packaging Assist attracted interest from your partners?
We launched Capital Assist (CA) in October, 2017 and Packaging Assist (PA) in September, 2018. CA is our partner-financing programme where we give them access to additional working capital. Through this, we help restaurants take their brand to more cities. So far, 360 restaurants across 10 cities have availed loans through CA. PA is currently present in Bengaluru, Mumbai and Pune with plans to roll out to other cities in the next three months. Through PA, we have set up a marketplace where our partners can access a variety of packing solutions. So far, we have over 300 restaurants that have made purchases on the platform.
What growth is Swiggy seeing currently?
Our orders have grown 4.4 times from August, 2017 to August, 2018 which is a sign of growing at a faster rate at a higher scale. Revenue has increased over four times in the same period.
What is Swiggy’s view on discounting?
We are strong believers in building the brand and getting consumers for our proposition of fast, reliable food delivery and the convenience factor. Even in our campaigns, there is no mention of discounts. We want to build the brand the right way with brand engagement. Discounts for us are tactical and we will use them selectively for growth; strategically, we will focus on category creation.