No Binge, no Purge
As rivals resort to
layoffs, Swiggy eyes allied opportunities to flank the food ordering business
In the past few months
Bengaluru-based food delivery ven ture Swiggy has watched its largest rivals
wither. First TinyOwl announced it was laying off a couple of hundred employees
and shuttering offices nationwide to slow down cash burn.And earlier this week
Foodpanda reportedly laid off a little over 300 employees, roughly 15% of its
workforce.
For Sriharsha Majety, these
stories have offered a cautionary tale of greed for growth with little focus on
building a stable business. He hopes to avoid these air pockets with his
business, which raised its last round of $30 million in June 2015 from Norwest
Venture Partners, SAIF and Accel Partners and is already in the market for its
next tranche -reportedly in the region of $100 million. “We are only in eight
cities and cover some 5,000 restaurants,“ he says. “We are taking time to build
a scalable business, because we want to change the way India eats.“
To try to build a meatier
business, Swiggy says it wants customers to order off its platform as many as
four times a day. “We see our business growing 50 or 60-fold in the next three
or four years as we bring more restaurants online and people too get
comfortable ordering a variety of food,“ says Majety. “We went from one city to
eight cities in six months and proved that the model is highly scalable.“
Now, it appears Swiggy is
pausing and taking a breath, surveying the markets it is currently in and where
it needs to go. “We are widely present in Bengaluru and Hyderabad, but scantily
in other cities including Mumbai and Delhi, which present massive opportunities
for us,“ he explains. “We need to make sure we get our strategy right.“
Going forward, he may need
to rethink Swiggy as a business.While food ordering may have been the way it
got started, the future may hold a different opportunity for the company. For
example, Swiggy is a night and weekend-heavy business, even as many restaurants
they work with are trying to build all-day businesses. Second, popular chains
may not have a physical presence close from where it gets a bulk of its orders.
For the first challenge, Majety and Co want to work with a broader range of
businesses (think of caterers, for example) to try and evolve food into
something of a utility. “We eventually want breakfast to ar rive automatically
at a customer 's doorstep like the newspaper and milk... it should become a
pre-ordered set up, with little headache for the customer,“ he says.Then,
Swiggy wants to use some part of the funding it has raised to jointly set u p s
e r v i c e o n ly kitchens for these joints to tap areas wh e re t h e y ge t
plenty of orders from but are relatively geographi cally distant.
Majety believes Swiggy can
use its growing base of customer orders and to build a personalised interface
for individual customers and help them make informed choices. “Like music,
movies and books, people usually have barely 30 minutes to eat a meal... people
are happy to get help with their choices,“ says Majety. And the profit
imperative? “Profitability is a goal post... it doesn't have to be immediate,“
he adds.
ETM3JAN16
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