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Swiggy, India, a SoftBank-backed food delivery group, aims to outperform its listed rival Zomato by shifting most of its business to delivering groceries and other commodities. ..
Sriharsha Majety, co-founder and CEO of Swiggy, told the Financial Times that non-restaurant food delivery accounted for about a quarter of the company’s revenue, more than 50% over the next few years. He said he wanted to.
Swiggy launched several alternative services, including grocery delivery and courier Genie, and last month $ 1.25 billion, including SoftBank, Prosus, and others designed to drive growth in these areas. Completed the funding round.
“Some companies are in a really exciting place to take you to the next level from here. Some of them will be bigger. [restaurant] The food delivery business in the next four to five years, “Majetti said. “I’d like to come back a few years later and talk about how business is bigger than food.”
Swiggy’s plans come true when Zomato completes its $ 1.25 billion list last month. The first Zomato IPO by a leading Indian tech company was well received by investors who wanted to attend a record stock market rally, even though the company had never made a profit.Its share has risen by 80 percent Their issue price..
Majeti said Swiggy wanted to be on the list but didn’t provide a timeline.
Swiggy’s diversifying plans highlight a lasting struggle to build a profitable business in food delivery. Some analysts question the sustainability of the business, as India’s average order value is less than $ 5 compared to more than $ 30 in the United States.
Online grocery delivery represents a much greater opportunity. Indians still rely overwhelmingly on small local stores and street vendors for groceries, and analysts believe online sales will grow faster than other e-commerce sectors. Securities firm Motilal Oswal predicts that the online grocery market will grow 59% annually to $ 18 billion by 2024.
Satish Meena, an independent analyst based in Delhi, said Swiggy needs to go beyond restaurant cooking to continue to grow. “We have passed the high growth period [in food delivery].. It will take more time to add customers and orders, “Meena said. “They have to come up with other ways.”
Swiggy and Zomato are effective Squeezed out Many large companies, former food delivery competitors such as Uber Eats, are targeting the online grocery sector.This is from Mukesh Ambani JioMart, Big Basket and Amazon owned by Tata.
Majeti said Swiggy will benefit from the existing base of loyal, high-paying customers who are already accustomed to ordering from restaurants on the platform.
Some analysts say that the high-income e-commerce market in urban areas is likely to shrink in the short term, but they have a “nearly 100 million” Indian market. He said he was targeting.
“Many players are competing,” he added. “It’s fierce … But when it comes to niches, we go after we really feel better.”
Ultimately, Majeti said he wants to build a platform that offers a variety of services to urban consumers. “We are also not sticking to the idea of delivery. The idea for us is to provide convenience to consumers. Delivery happens to be one-way.”
Indian food delivery group Swiggy targets grocery business Source link Indian food delivery group Swiggy targets grocery business