Both Swiggy and Zomato saw multiple restaurants on their platforms shutting down operations temporarily even as the order volume took a hit amid the nationwide lockdown that began March 25.
Along with diversifying revenue streams by expanding grocery delivery service and launching liquor-at-home facility, food delivery company Swiggy is now trying to help restaurants, bruised and battered in lockdown, get up and running. Both Swiggy and Zomato saw multiple restaurants on their platforms shutting down operations temporarily even as the order volume took a hit amid the nationwide lockdown that began March 25. Now, Swiggy is looking to provide credit to restaurants, which are facing challenges in procuring raw materials, as part of a service that is currently in the pilot stage, a source aware of the development told Financial Express Online.
The new B2B service called Swiggy StaplesPlus will supply more than 250 raw materials, packaging material, fruits and vegetables, poultry and grocery, and dairy essentials apart from credit facility to restaurants, another source said.
- Zomato, IRCTC, Mindtree stocks, others stare at $1 billion inflows after possible entry in MSCI India index
- Zomato share price may fall 9%, JP Morgan initiates with underweight rating; premium valuations not justified
- Zomato co-founder Gaurav Gupta quits weeks after bumper IPO; says, taking new turn in life
Swiggy, however, declined to comment on it. “We don’t have anything to share on this right now,” a Swiggy official told Financial Express Online.
“This is primarily to help them (restaurants) source their raw materials cheaper. It is likely to be an offering across restaurants while credit is part of the service but it is still very early days for the service to say how it will grow,” the source added. Restaurants can access the service currently through the owner or the partner app.
The supply base of most restaurants has been significantly impacted as suppliers have either been facing challenges in delivering goods or have halted their businesses during the lockdown. “The procurement of supplies has been very erratic while demand has also declined steeply. Restaurants had to shut businesses due to these challenges. The restaurant supply chain is anyways far from being completely organized or streamlined by existing players. So, while this might help but if the demand doesn’t recover in weeks ahead then it will be another challenge for restaurants to pay back,” a Delhi-based restaurant owner told Financial Express Online.
Swiggy had last month expanded its grocery delivery business to 125 cities through tie-ups with HUL, P&G, Godrej, Dabur, Marico, Cipla, Vishal Mega Mart, etc. Moreover, it revamped its hyperlocal delivery service Swiggy Go as Swiggy Genie with the launch in more than 15 cities to deliver packages, or essentials, or medicines etc. Earlier this month, Swiggy’s co-founder Rahul Jaimini had quit the company after six years to join an ed-tech startup Pesto Tech as its co-founder.