Abstract
This article presents the SWOT analysis of Swiggy. The analysis provides an in-depth insights into how internal and external environmental forces are determining Swiggy’s competitive positioning in the market. Market researchers, policy makers, strategic management teachers and students may find the article useful to gain insights into Swiggy’s business strategies. Article also provides useful information about latest trends that are shaping the environment of Indian online food delivery industry.
1. Introduction
Swiggy is India’s #1 online food delivery company. The success story of Swiggy tells us how a startup became India’s largest food delivery service in only a few years. Swiggy attained 12th rank in Forbes’ most innovative companies list.
This article presents the SWOT analysis of Swiggy by identifying key strengths, weaknesses, opportunities and threats.
2. Company overview
| Swiggy company name | Bundl Technologies Private Limited |
| Year founded | 2014 |
| Headquarters | Bangalore |
| Industry | Online food delivery industry |
| Swiggy brand value 2023 | $6.38 billion |
| Swiggy revenue 2022 | Rs. 3444 crore |
| Competitors of Swiggy | Zomato, Uber Eats, DoorDash, Deliveroo, Grub-Hub |
3. SWOT Analysis of Swiggy
3.1. Strengths of Swiggy
3.1.1. Improved competitive positioning
Swiggy holds strong competitive positioning in the market. In 2021, Swiggy surpassed its biggest competitor- Zomato, and became India’s #1 online food delivery company:
Source: Statista
3.1.2. Superior value curve
Swiggy offers superior value to its customers than Zomato. Here is the value curve of Swiggy:
Source: Kannan (2022)
Swiggy outperforms the competitors based on:
• Wider choice
• No minimum order requirements
• Quicker and more reliable service
3.1.3. Strong brand image
According to ETC Group, Swiggy is world’s 9th largest food-tech startup. Moreover, Swiggy is India’s #1 largest online food delivery app, with more than 1,500,000 downloads.
Although, Swiggy is not present at international stage, but the company has strong presence in home market. Swiggy is particularly popular in Mumbai, Chennai, and Banglore.
3.1.4. User-friendly interface
Customers particularly prefer Swiggy for its user-friendly interface. Swiggy manages to pack more data in smaller space without overkilling the space usage, as done by Zomato:
Source: Nanduri 2021
On left, it’s Zomato, and on right, it’s Swiggy.
3.1.5. Hygienic packaging
Swiggy is popular for its hygienic and temper-proof packaging. The company also offers packaging solutions to the restaurants through its ‘Swiggy packaging assistant’. The solutions are tailored according to the restaurants’ menu needs.
3.1.6. Skilled personnel
In 2022, Swiggy launched ‘Swiggy Skills Academy’ to develop a fleet of highly skilled, confident and empowered delivery executives.
3.1.7. Strong partnership with restaurants
In 2023, Swiggy launched the ‘0%’ commission offer for the first month to restaurants, food entrepreneurs and cloud kitchens. This move can expand and deepen the Swiggy’s ties with its food partners.
3.1.8. Digital wallet
In 2020, Swiggy launched ‘digital wallet’ to offer a single-click-checkout experience to its customers. By using digital wallet, customers can store money, and use it to pay for food delivery orders.
3.1.9. Diverse revenue sources
Swiggy makes incomes from diverse revenue sources, as depicted in following graph:
Source: Statista
Swiggy has also partnered with banks to earn the affiliate income. Its key banking partners are ICICI, HSBC and Citibank. This partnerships allows Swiggy to earn additional income, and allows Swiggy’s customers to avail various credit card offers.
Swiggy actively uses the social media to interact and engage with customers. The company mainly relies on the digital and social media marketing strategies to interact with millennial audience. Swiggy regularly posts food order related themes over Instagram and other social networking sites:
| Social networking sites | Number of followers |
| 402K | |
| 999K | |
| 196K | |
| TikTok | 206K |
3.1.11. Brand equity
A comparative study on online food app customers revealed that Swiggy customers are more brand loyal than others. For instance, the study found that 56% of the customers recommend Swiggy to others for buying food online, 28% of customers suggested the Zomato to others, and only 16% customers suggested Uber Eats to others.
3.2. Weaknesses of Swiggy
3.2.1. Net loss
Although, Swiggy is beating the competition based on revenue, but the company is unable to make profit. In 2022, Swiggy reported ₹ 3,900 crore net loss. In 2022, its net loss doubled than 2021:
Source: ENTRACKR 2023
3.2.2. Poor hiring decisions
Swiggy’s over hiring is clearly a case of poor judgment- said Swiggy CEO. CEO further announced that in 2023, the company will lay off 380 employees, as the demand has slowed down, and company is unable to operate on profit.
On one hand, the company is laying off employees, and on other hand, Swiggy was forced to temporarily shut its pick and drop services in Mumbai, Bengaluru and Hyderabad due to staff shortage. The company needs to improve its staffing practices to keep pace with changing market conditions.
3.2.3. Technical glitches
The technical glitches affect the Swiggy’s ability to process and deliver orders on time. Recently, a technical default in the Amazon Web Services Platform (which runs the Swiggy’s platform) caused an hour-long glitch. The Down Detector collected 771 reports, showing the company was unable to timely respond to the glitch, which affected the customer experience.
3.2.4. Misleading UPI claims
In 2022, Swiggy faced criticism when customers flagged the company’s misleading UPI claims on Twitter:
Source: Money Control.com
Such misleading claims affect the brand image, and hamper the customers’ trust.
3.2.5. Limited reach
Swiggy only targets the zonal restaurants with closer proximity to the customers. Whereas, competitors of Swiggy are expanding the reach to cover more restaurants.
3.2.6. No presence at international stage
Unlike its competitor- Zomato, which is operating in 23 countries, Swiggy only operates in India. The lack of international exposure increases the company’s reliance on its home market.
3.2.7. Swiggy pick up and drop service charges
Swiggy passes packaging and delivery costs to customers. Recently, a customer shared his experience of ordering food online. As per him, the offline cost of the breakfast meal from Dakshin Café, was only Rs. 440. Swiggy charged Rs. 823 (68% higher), while Zomato charged Rs. 785 (60% higher) for the same meal. Read full story here.
3.3. Swiggy Opportunities
3.3.1. Expanding online food delivery market
Indian online food delivery market will grow with 28.13% CAGR from 2022 to 2026:
Source: PR Newswire
The high growth forecast suggests that Swiggy can further penetrate in growing Indian market.
3.3.2. Grocery delivery segment
Indian grocery delivery segment will grow with 26.38% from 2023 to 2027 due to customers’ growing online delivery preferences. So, other than penetrating in the food delivery market, Swiggy can also expand its presence in the grocery delivery segment.
3.3.3. International expansion
International online food delivery market is projected to grow with 12.6% CAGR from 2023 to 2027. While, Asian Pacific online food delivery market will record 15.4% growth, and will reach $6.4 billion by 2025.
Following graph shows the expansion of online food delivery market in Asian Pacific region:
Source: Market Research
Considering the growth trends, Swiggy can explore the international expansion opportunities (particularly in Asian region) to fuel the growth.
3.3.4. Expansion of Zonal restaurants
Swiggy can expand its network of zonal restaurants to extend the market reach, and give more options to the customers.
Considering the rise of social commerce, Swiggy can add new selling lines by adding fresh farm produce and organic groceries in its food delivery list. Swiggy has already planned to launch ‘Swiggy Bazaar’ to enter the fashion and lifestyle spaces.
3.3.6. Go Public
Swiggy has planned to ‘go public’ in second half of 2023. It will offer an opportunity to raise the capital, and gain higher share valuation.
3.3.7. Artificial intelligence and machine learning
Swiggy can invest on the artificial intelligence, data science and machine learning to grow the order value up to 200%. AI can help Swiggy in delivering more efficient, convenient and personalized service experience.
3.3.8. Drone delivery
From 2018 to 2028, delivery drone market will grow with 12% CAGR, and Asia Pacific will be the fastest growing segment. Swiggy can also expand the investment on drone technology to deliver groceries.
3.4. Swiggy Threats
3.4.1. Security concerns
In 2017, hackers infiltrated the Indian food delivery app- Zomato, and stole data of more than 17 million customers. Therefore, Indian online food delivery customers are increasingly getting concerned over privacy and security of food delivery apps.
3.4.2. Customer dissatisfaction
A recent research on Indian online food delivery customers revealed that around 48% of customers are dissatisfied with the online food delivery platforms. Common reasons for dissatisfaction are- ineffective grievance redressal, high fees and poor food packaging.
3.4.3. Rising inflation
Forbes reported that in April 2022, inflation hit the record high of 7.79% in India. The rising inflation is making online food delivery services costlier.
3.4.4. Growing health consciousness
In India, the number of health conscious customers will grow from 108 million in 2020 to 176 million by 2026. Due to growing health consciousness, customers may hesitate to order the food online, as they cannot confirm whether the restaurant follows the cleanliness and hygiene standards.
3.4.5. Intensifying competition
Competition in Indian online food delivery market is growing with time. Positive growth forecast of Indian online food delivery market is attracting new players. Competition already established players like Zomato and Uber Eats is also getting intense for Swiggy.
3.4.6. Increase in GST
Indian government announced that it will impose 5% GST on food delivery apps for their restaurant services. It will affect the financing models and supply chain of online food delivery services.
3.4.7. Workers’ strikes
In 2022, more than 30,000 Swiggy workers went on strike, and demanded to hike the minimum wage from Rs. 20 to Rs. 35 for each delivery. Such strikes can affect the Swiggy’s business operations
Based on overall SWOT analysis of Swiggy, we propose following recommendations:
4. Recommendations
• Swiggy should improve its hiring decisions to avoid staff layoff and shortage issues
• Expand operations at international stage
• Increase focus on grocery delivery segment
• Invest on drone technology for grocery delivery
• Expand the zonal restaurants
• Invest on AI and ML to make more well-informed decisions
• Add new selling lines by adding fresh farm produce and organic groceries
5. Conclusion
SWOT analysis of Swiggy has highlighted various strengths, including- quick and efficient service, user-friendly interface, and strong presence in home market. Net loss, limited reach, and delivery charges are key weaknesses.
Key opportunities available to Swiggy include- expansion at local and international stage, and investment on drone, AI and ML. Rising inflation, health consciousness, workers’ strikes and intensifying competition are key threats that affect Swiggy’s business performance.
Click here to read Swiggy marketing strategy.
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6. References
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