Swiggy Business model – How it works & earn revenue?

 


In this fast-paced world, no one would prefer going to the restaurant as they have to wait in the traffic and wait for some more time in the restaurant before the food is served. In 2014, Nandan Reddy, Rahul Jaimini, and Sriharsha Majety founded Swiggy. It is an online food ordering & delivery platform where people can order their favourite food from their local restaurant. Moreover, the order will be delivered within 30 minutes of order confirmation. 

This takes the food industry to the next level. There is no wonder that people show more interest in food delivery apps. Therefore the demand for such apps also increased a lot in recent times and expected to grow further in the coming years. Meanwhile, this encourages young entrepreneurs to enter the online food delivery industry with an app like Swiggy. 

Are you one of these entrepreneurs? If yes, this blog is for. You will get insightful information about the business model canvas of Swiggy. Reading this will help you frame your business plan and implement it.



Swiggy operates as a dual-partnership model

Its business model is based on a hyperlocal food delivery business operation. It bridges the gap between restaurants and customers. The Swiggy app offers a wide range of restaurants from which customers can choose it. As Swiggy operates as a dual-partnership model, it benefits both restaurants and customers. Here is how the Swiggy apps work.

Customers register with the app. They search for the food they love from a nearby restaurant and select it. After placing the order, the restaurant will get to know the order details and prepare the order. Then, the app will send a broadcast message to all the nearby Swiggy drivers. The available delivery executive will accept the delivery request and collect the order. Lastly, the order will be delivered to the customers. Notably, the restaurants will not use their own delivery executives to save costs. 

Takeaway the 3 significant points from Swiggy while 

  1. Value proposition 

There are no minimum value requirements. This is the main reason why they receive order even less than Rs.100. Moreover, the restaurants that register with the app can save their operational costs of nearly 25%. Apart from delivering foods, they deliver groceries, medicines, flowers and other things to the customer's doorsteps.

Notably, they offer 8 different payment options to the customers. These can be categorized into the following.

Digital wallets – Paytm, PhonePe, Freecharge, and Mobiwik.

Cards – Credit/debit card and meal cards

Others – LazyPay and Cash-On-Delivery

  1. Customer support

They provide 24/7 customer support to customers. Swiggy uses the Customer Support Chat service and has social media pages to help customers at any time. They incorporated the Reviews & Ratings feature in the app. Upon getting feedback, there is a lot more opportunity to improvise the app. 

  1. Revenue streams

With the ever-changing market, they keep on expanding their business strategy and operations. Then, how does Swiggy make money? At present, they make income from 6 revenue models. Some of them are as follows.

  • Commissions

They collect money from restaurants as a commission fee for generating sales leads. Restaurants who have registered with the app have to pay nearly 15% to 25% for each order. 

  • Delivery fee

It is the standard revenue model followed by all the food delivery apps. They collect a delivery fee from the customers. A nominal delivery fee is of Rs.20 to Rs.40 when the customers place an order value of below Rs.250. They increase the delivery fee when the demand surges during any occasions and unusual weather conditions.

  • Advertisements

As Swiggy has a broader user base, the in-app advertisement is an effective way to earn money. The app will allow the restaurants to promote their services by displaying the ads. Additionally, restaurants have to pay a considerable amount of money if they have to list at the top of the search results.

Bottom line

Undoubtedly, Swiggy is the leading food ordering and delivery platform. Its business model sets an example for other online food businesses. The business strategies they follow is quite impressive, and it paves the way to gain more customer base in a short duration. 

I hope this blog is informative and valuable to you. Are you planning to plunge into the online food business with an app like Swiggy? A clone app solution is a good choice as it empowers you to launch your app instantly. Looking for mobile app development? Reach out to us for Swiggy clone app development.

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