Swiggy - Company Profile

● Swiggy is a leading food ordering and delivery startup in India.

● The company started its operations in 2014 .
● Headquartered in Bengaluru.
● Swiggy works by acting as a bridge between customers and restaurants with
the help of innovative technology platform that allows customers to order
food from nearby restaurants and eateries.
● It works as a single point of contact for ordering food from all restaurants that
may be there at a particular location.
History
The idea for Swiggy came in 2014,when the founders (Sriharsha Majety,Nandan
Reddy and Rahul Jamini) realized that there was :

● A huge gap in food ordering and delivery space.

● Manpower and untrained delivery personnel problems faced by restaurants.

Swiggy started as a small setup in August 2014,with a team of six delivery personnel
and covering 25 restaurants .

However ,the idea soon became a huge hit among customers and restaurants alike .

Swiggy now has operations in 100 cities and more than 40000 restaurants on its
platform.
Swiggy Funding
● Swiggy is backed by one of the best investors available in the market.
● It entered India’s “unicorn” club in early 2018,had raised USD 1 billion in fresh
capital,marking the biggest ever funding round in the country’s booming food tech
sector .
● This resulted in increased pressure on arch-rival Zomato to quickly raise fresh
funds.
● Swiggy has become the fifth most valuable startup ( Patym , Ola , Oyo and Byju’s)
in India at a valuation of USD 3.3 billion .
● It has received investments worth USD 155.5 million via six rounds of funding.
● Investors include SAIF Partners , Harmony Partners,Naspers,Norwest Venture
Partners,Bessemer Venture Partners and Accel Partners.
Swiggy Business Model
● Just like Grubhub in the USA, Swiggy operates on a hyperlocal on-demand food
delivery business model. It not only aggregates restaurants but also organises a fleet
of delivery partners which deliver the food (in less than 30 minutes) on-demand.

● Dual partnership model. The partners can be divided into two categories:

Restaurant Partners : The restaurant partners are restaurants which opt to deliver to
customers that come from Swiggy application and website.

Delivery Partners : They form the delivery fleet which is given the responsibility to
pick up the order from the partner restaurant and deliver it to the end consumer
Swiggy Delivery Challenge 
● The role of delivery doesn’t begin when someone places the order, but as
soon as they open the app.
● When a customer opens the app, the first call is made to the Delivery
system to figure out:

● The restaurants that are actually serviceable to the customer, which

means those from which a delivery is possible within some stipulated
time (say, at most 60 minutes).
● The expected delivery time of an order from a potential restaurant.
Serviceable Restaurants Finding and Delivery
Promise
First need to calculate :

● Assignment Delay: How long before swiggy can find a Delivery Executive

who can fulfill this order?
● First Mile: How long before they arrive at the Restaurant?
● Prep Time: How much time is required for the Restaurant to prepare the
food?
● Last Mile: How much time is required for the Delivery Executive to reach the
customer from the Restaurant?
The Central Delivery Equation

● Delivery Time = Max (Assignment Delay + First Mile Time, Prep Time) +
Last Mile Time
Cont..
● Since the assignment delay and first mile happen in parallel with the
restaurant’s food preparation, they take the maximum of the two times.

● If they show too few, the customer will not place an order since his favourite
restaurant may be unserviceable.

● At the same time, if they take too long to show the list of restaurants, they will
leave the app.

● If they show too low a delivery time and they don’t deliver within it, it leads to
bad customer experience. If they show too high a delivery time, the customer
may not order to begin with.
Goldilocks value

● Everything in Delivery is about finding the Goldilocks value.

It’s about finding just the right time to ensure delivery, but not too
high to discourage the customer from placing an order.
It’s also about providing ample choice of restaurants to the
customer , but just enough so that they can calculate their delivery
times as quickly as possible.
Estimating Last Mile Time
● Last Mile is the time taken by the Delivery Executive from the Restaurant to
the Customer’s location. ( Can’t they simply use Google maps ? )
Cont..
So short of building their own maps that scale to their needs , how do they solve
this ?

● Leveraging historical data: Swiggy, till date, has delivered millions of orders,
and has a lot of data around how long a delivery can take on a two-wheeler
from a particular Restaurant to a Customer.
● Enhancing historical data with real time signals: Swiggy’s unparalleled
hyperlocal density can help in leveraging the travel time data of Delivery
Executives currently doing orders to make predictions.
Estimating Preparation Time
The Prep Time is driven by various factors:

● Type of item: It takes much longer to make a pizza than it does to put a scoop of
ice cream into a cup.
● Number of items: It takes longer to prepare ten Kathi Kabab rolls than just one.
● Load at the Restaurant: It takes longer to prepare an order if the restaurant is
already busy serving many other orders than if it has none pending.

Predicting the Preparation Time is not only very important in showing an accurate
Delivery Time, but it’s also important in ensuring that the Delivery Executive reaches
the restaurant only when the food is prepared.
Estimating Assignment Delay and First Mile Time
So how do they estimate this ?
● Track all the Delivery Executives and see their status. (Tricky problem
associated with this .)
○ Need to keep track of every single Delivery Executive, what they are doing,
how long will they be delayed and then see their eligibility to deliver an
order from the list of hundreds of restaurants.
● Need to accurately predict how many customers will order at any given time to
decide whom they would be serviceable to , with limited Delivery fleet and not
everybody who opens the app ends up ordering.
● What if the Delivery Executive whom they have reserved ,rejects the order?
Cont..
● These can be solved by cleverly calculating Goldilocks Value.

○ Make estimates based on the current load of the Delivery fleet in

the hyperlocal region and the current distribution of fleet around
the restaurants.
○ Need to correctly trade off the buffer time to ensure that they
show a high enough value not to give a misleading promise, but
low enough not to discourage the customer from placing the
order.
Artificial
Intelligence in
Food delivery
and Grocery
business.
Chatbots for food and grocery delivery
● Customizable AI platform can be trained to fit different types of Industries.And
these chatbots with 86 per cent accuracy can replace humans , and be available
24 * 7 to serve their clients and consumers.
● Introducing AI into current marketing systems can alleviate many problems that
manual systems encounter on a daily basis.
● If in some cases the chatbots fail to understand a specific demand ,humans will
be around to take care of the matter for the time being and with better training
and programming , the AI interface will improve and become better at
processes.
Improved Search Results
● Improved and faster search results will lead to higher customer satisfaction.
● Greater chances of sale conversions
(This will in turn influence sales and increases them by at least 40 per cent).

● Conduct grouped keyword searches and check their performance.

● Tag products individually and in group, so the search is more effective and
efficient.
● Market the same product under different categories ,and train the bot to identify
tags.
Categorization of Products
● The AI system can be trained to classify as many as 5,00,000+ products in a
days’ time , which might take several days to be done , otherwise.

● The bot can be trained to categorize new and existing products automatically.

● It can also suggest new categories , or combine similar one ,thus reducing
duplication and mistakes that might arise out of manual categorization.
Inventory Management
● Manual inventory management is a tedious task and poor management of
inventory can result in out of stocks , pricing errors and wastage of products .

● AI utilises visual recognition and machine learning technologies to identify

products that are out of stock , spoiled or expired ,and out of season.

● It can also notify the people in charge to recognize and take immediate actions.
Marketing and Promotion
● Customised marketing and promotions can also be made possible by including
AI into the delivery business and apps.
The patterns discovered based on the customer’s consumption is recorded
.Similar data can be used to offer personalized marketing offers to consumers ,
like :
➔ Product combinations based on consumers choices
➔ Product assortments based on local marketing conditions
➔ Promotions and banners to promote new products and weekly offers.
● This will impact sales and improve conversions to a great extent.
● Gain an edge over the existing competition in the food and grocery delivery
market segment.
Swiggy And AI
● Swiggy uses AI and machine learning (ML) for matching consumer demand with supply
from restaurants and delivery partners.
● On the consumer side, it uses AI to deliver a personalised discovery experience to
customers based on their usage pattern.
● This experience is powered by ML-driven investments in
○ catalogue intelligence (for classifying products as veg/egg/ non-veg) ,
○ customer intelligence ( understand the preferences of our users ) ,
○ relevance (if they are affordability-conscious customers) and
○ personalised customer experience (to deliver a personalised listing of
restaurants in the listing page and search) and
○ real-time signals (last-mile distance between the restaurant and customer
location).
● On the restaurant side, it is using AI for time-series based demand prediction models that
help its partners plan ahead for demand.,
Cont..
● On Feb. 04, Bengaluru-headquartered Swiggy said it has acquired artificial
intelligence startup Kint.io, which applies deep learning and computer vision for
object recognition in videos.
● Kint.io’s capabilities will help Swiggy enhance its customer experience as object
recognition can be applied to the discovery of restaurants using images and
recommendations based on image search.
● Kint.io is Swiggy’s fourth acquisition. Last year, it had acquired on-demand
delivery startup Scootsy for Rs 50 crore ($7 million), and SuprDaily, a milk delivery
startup, to launch micro-delivery of staples such as milk, bread, and eggs. In
December 2017, it had bought 48East to strengthen its supply capabilities.
Cont..
Banking heavily on technology capabilities, Swiggy has recently introduced two new
features into its feathers,
● ‘Swiggy Scheduled’ which enables users to plan and order their meals in
advance and
● Swiggy POP, for people looking for the simplest ordering-in experience at
affordable prices.
Both these services are in line with Swiggy’s promise of being the most reliable and
convenient food delivery platform in the marketplace.
Sources
● https://bytes.swiggy.com/the-swiggy-delivery-challenge-part-one-6a2abb4f82f6
● https://nurturingtechnolab.com/blog/artificial-intelligence-in-food-delivery-and-gr
ocery-business/
● https://www.hindustantimes.com/tech/food-delivery-apps-bet-big-on-artificial-int
elligence-to-boost-delivery-in-india/story-d0WRS5O2Rz45eAXi9PdjJN.html
● https://www.feedough.com/swiggy-business-model-how-swiggy-works-makes-
money/