How Swiggy Changed the Online Food Ordering Industry

The story of Swiggy, a product that fundamentally changed the way both customers and competitors approached food delivery


Having insatiable cravings at the end of a long day at work? We have all faced that at some point or another but the thought of going to the restaurant, picking up the order then driving through dense traffic just to reach home in time to find your food cold, sounds like a hassle and kind of defeats the purpose of ordering in. This has been the case in the Indian food delivery scene for many years, at least until August of 2014 when Swiggy came onto the scene and turned the tables by revolutionising the food delivery industry.

Swiggy: How It Began

Swiggy is many things but at its core, it is a hyper-local food delivery app that has streamlined the ordering and delivery process beyond anyone’s wildest expectations and it is every entrepreneur’s dream. Swiggy is the brainchild of Sriharsha Majety, Nandan Reddy and Rahul Jaimini and had its roots put down in Bengaluru’s neighbourhood Koramangala, in August of 2014.

Swiggy stood out from day one of its inception into the market, a market which at that point was already quite saturated. It should be noted that players like Zomato were already active and thriving when Swiggy was just starting out, but they all fell to the back of the crowd because did not seize the opportunity. In the years preceding Swiggy, the online food-delivery scene was not a very attractive prospect for many of the big players as it was quite a fragmented beast to tame. This pushed the likes of Zomato to look elsewhere for its expansion, a decision that it would come to regret.

Going against the grain, Swiggy proved otherwise and its expansion exploded in about four years, making it India’s fastest-growing platforms and earning it the coveted ‘unicorn’ title. In late June of 2018, with a total valuation of $ 1.3 Billion, Swiggy had officially entered the unicorn club. Just to put how extraordinary that is into perspective, it took Flipkart, which was previously considered as India’s largest and fastest-growing start-up around six years to do what this food delivery app did in just four.

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Swiggy took the path less taken and because it invested so much into building an extensive logistics network it was able to corner the market.

What Makes Swiggy Stand Out as a Product

Much of Swiggy’s success can be boiled down to its approach and format. In a market so over-crowded with industry giants that have had years to set up a business network, the only way to stand out was to execute a maverick move, which Swiggy did in the form of its app. It is a well-known fact that a business that controls the value chain in a market, has greater control over the market itself, hence the entire premise of the app was based around building up and reinforcing an excellent logistics operation.

Building a logistics network is a tedious and time-consuming task that does not yield much customer retention out the gate, which is why most start-ups tend to shift focus to first getting their name out into the market sphere through apps, marketing and outreach activities. Swiggy proved that while this was a big task for a start-up to undertake in its formative years, it was a worthwhile one.

Thanks to this approach, the very concept of the app and how it functioned served as the foundation for the brand’s success. Yes, brands like Zomato, TinyOwl and Foodpanda performed a similar function of connecting customers to their restaurants of choice but in doing so, they completely neglected the delivery aspect of it and left that task to other third-party delivery services or the restaurants themselves. Needless to say, this left the delivery and customer-care end of things lacking in timely deliveries, quality of service and severely limited the restaurant’s ability to live up to the demand as a restaurant can only do so much delivery when the primary focus is on their in-house customers.

The Swiggy app on the other hand completely cuts out all the middle-persons and keeps its sole focus on connecting hungry customers with their food orders. Operating on a hyper-local food delivery system, Swiggy has a vast network of delivery personnel whose primary goal is to get the food to the customers in 30 to 40 minutes. Keep in mind that this was at a time when online delivery as a concept was not too popular with restaurants and much of the competition as well. The reason why Swiggy was able to rise above the doubt was thanks to investors who saw its potential, coupled with a strong combination of a solid logistics network and a streamlined technology backboard to support the vast delivery network.

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Swiggy's Delivery app has a myriad of features that make it user friendly, but the most important feature is that the app facilitates inclusivity and has something for everyone.

Swiggy's Various Features and Options

The App, the Features, the Success

Like many online platforms today, Swiggy does have a website where it features updates, policies, and a well-maintained customer-care line to reach them through, but it is the mobile app that is the star of the show. So, without further delay here are the features of the app and why that makes Swiggy king of its domain:

The Delivery Fleet

Since Swiggy has its own fleet of delivery persons, it does not have to rely on the restaurants to undertake that task and at this point, it becomes more than just a connecting or ordering platform, it becomes a service. Each member of the Swiggy fleet who is registered under the app can be contacted and tracked through the app’s simple interface making the process that much easier.

While Zomato, Swiggy’s biggest competitor to date, also has a fleet of delivery personnel, it is nowhere close to Swiggy on that front as the brand primarily caters to connecting people to restaurants and handles bookings and reviews on behalf of the customers. This makes the delivery business a secondary priority, and to succeed or overtake a market, the sole focus should be on a single purpose, which is why Swiggy excels with the delivery service.

No More Minimum Order

The dreaded ‘minimum order policy’ which states that a minimum value of food needs to be ordered from the restaurant to have it delivered, a concept removed by Swiggy. Since the Swiggy app cuts out the middle-men and has its own fleet, there is no minimum order policy. Instead, Swiggy takes out a commission from the restaurant and a minimal fee for the delivery charges, letting customers order as much or as little as they wish to. This is a key factor in why the app has such high customer satisfaction and retention rate.

Speed Is Everything

Swiggy maintains a delivery target time of roughly 30 to 40 minutes, which can be further tracked through the app in real-time. This time is also segmented into portions of when the order is placed when the delivery personnel arrive at the restaurant and the time taken to the customer’s doorstep. This greatly improves customer oversight and keeps the process compartmentalised and streamlined. Swiggy has thus far brought the average delivery time down to 37 minutes, which has proven quite essential to maintaining customer satisfaction levels.

To put this into the perspective of why it is so important to the success of the app and the brand as a whole, take Domino’s Pizza, for example, a pizza chain that renowned for their 30-minute delivery policy. A successful model for the simple reason that hungry customers want food fast, achieving that inspired brand loyalty and higher customer retention.

Going the Distance

Another reason why the engagement on the app is so high is variety. Yes, other delivery apps are catching up to that and have a wide variety of restaurant options as well, but Swiggy has wider coverage. The app enables customers to order from beyond just their immediate vicinity. This aspect of the app speaks to the sheer level of convenience and comfort brought to the customer base as users can try a wider selection of foods in their respective areas.

The Swiggy Wallet and Price Points

The Wallet option lends itself to quick and easy payments through the app and further extends the engagement of the platform as wallet users can access special coupons and offers that would otherwise not be accessible. This funnels in customers to invest more into the core functionalities of the platform and drives the brand engagement as well.

Most of the offers can be availed through partner banks and payment gateways which are streamlined through the app making the singular point of access all the more convenient.

Swiggy took it a step further and offered users a ‘pocket-friendly’ option that lists all restaurants options that fit into the budget category. A smart move on the brand’s part as it prevents alienating the segment of customers who also want to order in but have a budgetary restriction. A strategy that greatly increases the scope of brand expansion and drives app engagement in every customer segment.

Swiggy Genie

The Swiggy Genie feature lets customers get things picked up and dropped off anything outside the scope of food. This includes sending gifts to people, ordering medicines and even groceries from the local supermarket. Given that the platform has such a strong core functionality it allows Swiggy to branch off into such diverse ventures which play in favour of brand expansion and drives the engagement up more for the business through the app as people will have more use for it beyond just food.

Speaking of diversification, the app also has a ‘Meat and Fish’ feature which delivers fresh meat products to customers from reliable, partnered vendors in the city. Ideal for those of us who are looking to make a fancy home-cooked meal or want to skip the hassle of the meat market early in the morning.

Street Vendors and Covid Safety

The only way to survive in the aftermath of the pandemic was to adapt, and adapt it did. Swiggy’s now-infamous no contact delivery system, which is now being used throughout the industry as a catch-all, was that solution. Though sanitary safety measures are commonplace now, Swiggy hit the mark early as it partnered with restaurants during the peak pandemic months to meet the sanitary requirements. This drove up brand loyalty and app engagement as people relied heavily on this type of delivery given that everyone was stuck at home and had been itching to try something other than home-cooked food.

Seeing this trend Swiggy also rightly seized the opportunity to bridge a major pain point in the market, which were the street vendors. In early December of 2010 Swiggy announced the launch of the ‘Street Food Vendor’ Program that would benefit around 36,000 people in 125 tier 2 and tier 3 cities in the first phase of the launch.

The venture was in partnership with the ‘Prime Minister Street Vendor’s AtmaNibhar Nidhi’ (PM SVANidhi) scheme that ensured all vendors are registered with the Food Safety and Standards Authority of India (FSSAI) receive a Food Safety Training and Certification (FOSTAC) in partnership with FSSAI. This bridged a major gap in the market left by the pandemic as street vendors make up a large portion of the market and were hit the hardest by the lockdown. A great strategy that helped Swiggy expand its reach into a market hardly touched by much of the competition.

Swiggy Safety Protocols and No-Contact Delivery

The Wrap-Up

As of April of 2020, Swiggy reached a total valuation of $ 3.6 Billion and is active in over 400 Indian cities. Given how much they have diversified over such a short period and still managed to rise to success despite the pandemic, it speaks volumes about the smart entrepreneurial decisions made by the founders.

Having said that, at the core of why the app was so successful as a product and platform was due to a customer-first approach and speedy service that stood as the cornerstone upon which every variant and branch-off of the platform was built. Essentially, the reason they were able to overtake the market out of the blue was because they dared to not follow the crowd and they did not alienate any segment of the market or customer base; there was something for everyone. To think that all this started because Sriharsha Majety and Nandan Reddy wanted to make life easier for the Indian restaurant-goer with a tap of a button.

For more inspiring stories like this visit our Inspire Section.

DU Desk
DU Desk
Stories from DU Desk are the collective efforts of our in-house authors, guest authors and subject matter experts who collate and distill their ideas and thoughts to bring out actionable insights for our readers.

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