Swiggy: Delivering On Business Continuity Amidst COVID-19: IBS Center For Management Research

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IBS Center for Management Research

Swiggy: Delivering on Business Continuity amidst COVID-19

This case was written by Syeda Ikrama, under the direction of Syeda Maseeha Qumer, IBS Hyderabad. It was compiled from
published sources, and is intended to be used as a basis for class discussion rather than to illustrate either effective or ineffective
handling of a management situation.
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Swiggy: Delivering on Business Continuity amidst

COVID-19
“COVID-19 and 2020 is a trial by fire for Zomato, Swiggy, and the likes. 2021 will
either see them reduced to ashes or rise like a Phoenix to rule the Indian market.1
– Pratik Bhakta and Priyanka Sahay, Special Correspondents at online business
news website Moneycontrol.com in 2020.
INTRODUCTION
In October 2020, as India embarked on the fifth phase of unlock from the COVID-19 pandemica
induced lockdown, Bengaluru-based online food delivery platform Swiggy announced that it had
processed 100 million orders across food, medicine, groceries, and other categories since the
lockdown was first announced in March 2020 and had recorded close to 85% of pre-COVID order
values. The food aggregator also reported a five-fold jump in on-boarding of premium restaurants
during the period with 7,000 new restaurants, on an average, joining the platform per month. In the
pre-COVID days, this number had been around 4,000. According to a Swiggy spokesperson, “More
than 200 cities have reached 90 percent of their pre-COVID GMV levels, with more than 70 cities
seeing a full recovery. Certain micro pockets within the country have also reached 200 percent of
their pre-COVID levels and bulk ordering has pushed up average order values by 30-40 percent” 2
On March 25, 2020, Indian Prime Minister Narendra Modi (Modi) announced a 21-day lockdown
to curb the spread of COVID-19 in India. The lockdown hit Swiggy’s business hard with
restaurants being shut and customers reluctant to place orders fearing the spread of the virus
through food. In March 2020, food orders on Swiggy dropped by 60%. To cope with the pandemic
and maintain business continuity, Swiggy adopted a multi-pronged approach and introduced
several initiatives including overhauling its food order journey, maximizing food safety at each
step of the order-delivery process, and working closely with its delivery partners to ensure their
safety by providing access to hygiene equipment and offering free on-call medical consultation
and training on best practices. It encouraged customers to opt for contactless delivery and digital
payments. The online food delivery platform also diversified into online groceries and delivery of
essentials with the launch of Swiggy ‘Genie.’ Besides, it partnered with premium hotels and
restaurants to offer curated cuisine at the doorstep of customers.
To support its delivery partners, Swiggy set up a relief fund called ‘Swiggy Hunger Savior Covid
Relief Fund’, which was used for the safety and welfare of its delivery partners and their families.
Swiggy also introduced the ‘Hope, not Hunger’ initiative to feed thousands of the underprivileged,
daily wagers, and migrant laborers stranded in different cities during the lockdown. In May 2020,
Swiggy laid off 1,100 employees – nearly 14% of its workforce – across grades and functions as
COVID-19 continued to hurt its business in different verticals. Also, Swiggy’s delivery partners
had gone on strike and staged agitations in cities such as Hyderabad and Chennai, alleging that the
company was manipulating payment structures.

a
The COVID-19 pandemic was a global pandemic of the coronavirus disease 2019 (COVID-19), caused
by the severe acute respiratory syndrome coronavirus 2 (SARS CoV 2). The outbreak was first
identified in December 2019 in Wuhan, China. The pandemic caused severe social and economic
disruptions globally.
1
Though Swiggy’s business bounced back to pre-COVID levels in October 2020, the foodtech
unicorn faced some challenges going forward including regaining customer trust, bringing more
restaurants back onto its platform, and recovering revenues. Moreover, according to some analysts,
e-commerce giant Amazon’s entry into the food delivery space in India could upset Swiggy’s
dominance in the Indian food delivery sector going forward.
With the online food delivery business in India on the road to recovery, analysts wondered: What
should Swiggy do to restore consumer confidence, help revive demand, and build brand loyalty? Can
it make a mark in the intensely competitive online grocery space in India? Even as Swiggy broadened
its offerings during the pandemic, what could it do to keep the customer experience intact?
BACKGROUND NOTE
It all began in 2014 with two engineering graduates from BITS Pilanib, Sriharsha Majety (Majety)
and Nandan Reddy, seeking to make life easier for Indians with their idea of a hyperlocal food
delivery service. Though the duo had the vision and product mindset to build the company, they
realized that they did not have the technical skills to bring their vision to life. So, they brought on
board former Myntra software engineer and IIT alumnus Rahul Jaimini (Jaimini) to develop a food
ordering and delivery website. The three co-founders used their respective skills to build a
distinctive online food ordering website. Thus was born Swiggy in August 2014. Swiggy offered
customers a selection of restaurants from nearby locations that it had enlisted. The customers could
then select and place order through its app or the website. It appointed dedicated delivery
personnel to pick the orders up from the restaurants and deliver them to customers. Initially
Swiggy began operations by signing up a few restaurants in Koramangala, Bengaluru.
In 2015, Swiggy raised its first round of funding of about Rs. 120 million from venture capital firm
Accel Partners and private equity firm SAIF Partners.3 It also launched its food delivery app in
May 2015. By the end of 2015, Swiggy had 100 restaurants onboard and was receiving about
70,000 orders per day4. In fiscal 2015, Swiggy reported revenue of Rs. 1.2 million against a loss of
Rs 21 million.5 Swiggy grew at 25% month-on-month with more than 5,000 restaurants onboard
and 3,000 delivery partners by April 2016. However, in the fiscal year ending March 2016, the
food delivery startup witnessed a 65-fold increase in losses, which went up to Rs. 1.4 billion, as it
scaled up, leading to heavy cash burn and poor unit economies.6 Swiggy generated revenue of Rs.
235.9 million during the year.
By June 2017, the food aggregator had more than 12,000 restaurant partners on its platform and
was operational in eight cities across India. In November 2017, Swiggy launched Swiggy Access,
ready-to-occupy kitchens for restaurants – otherwise called cloud kitchens, with a basic setup and
all the required facilities in it in order to bring quality food closer to consumers while enabling
business expansion for its restaurant partners. The ready-to-occupy kitchen spaces were given to
select restaurant partners where the only expense the partners incurred was to equip the kitchen
and run it as a delivery-only branch. No rent or deposit was charged for the premises. Swiggy’s
first Access kitchen spanning 3,200 sqft was set up in Bengaluru’s Marathahalli area. The place
served signature dishes from restaurants such as Leon Grill, Keventers, and Punjabi Rasoi and
Swiggy’s private brands — The Bowl Company and House of Dabbas — to consumers in the
neighborhood. In 2019, Swiggy expanded its cloud kitchen model with 1000 Swiggy Access
kitchens being set up across 14 Indian cities.
In 2018, Swiggy received seven rounds of funding from investors including SAIF Partners,
Harmony Partners, Naspers, Norwest Venture Partners, Bessemer Venture Partners, and Accel
Partners. In February 2018, Swiggy entered the Unicornc club with a market valuation of US$1.3

b
Birla Institute of Technology (BITS) located in Pilani, Rajasthan, is one the reputed engineering colleges
in India.
c
A unicorn is a privately held company with a valuation of US$1 billion or more.
2
billion. In December 2018, it raised US$1 billion from Naspers and a host of Chinese Internet
firms such as Tencent Holdings, Meituan Dianping, and others. By the end of 2018, Swiggy had
expanded to 42 additional cities and doubled in gross merchandise value. The company had close
to 120,000 active delivery partners. As of October 2018, it was handling 21 million deliveries a
month. Revenues were Rs. 4.4 billion for fiscal 2018, which was 2.3 times the revenue reported
the previous year. Swiggy reported losses of Rs. 4.0 billion in 2018 (See Exhibit I).
Swiggy launched Swiggy POP in May 2018. Swiggy POP offered curated menus for single-serve
meals to consumers in the price range of Rs. 99 to Rs. 200. In August 2018, Swiggy acquired
Mumbai-based on-demand delivery firm Scootsy Logistics Pvt. Ltd. (Scootsy)d for Rs 500 million in
an all cash deal.7 According to Swiggy, the acquisition was meant to expand the company’s network
of 40,000 restaurants by adding more curated restaurants to it. Scootsy continued to operate as an
independent app post the acquisition. The food aggregator also acquired a Bengaluru-based Artificial
Intelligence Start-up Kint.ioe to scale up its technology expertise in February 2019.
In February 2019, Swiggy ventured into the hyper-local delivery space by launching Swiggy Stores
that delivered daily essentials, including groceries, within an hour to customers at their doorstep.
Swiggy Stores, piloted in Gurugram in partnership with 3500 stores, was expanded within six months
to Hyderabad and Bengaluru. Swiggy rolled out its instant pick and drop service called Swiggy Go in
September 2019 in Bengaluru. This service could be used to pick up and drop anything from laundry
to forgotten keys, to send lunch boxes from home to office, and even to deliver documents or parcels
to clients. Swiggy planned to expand Swiggy Go to over 300 Indian cities by 2020.
As of 2019, Swiggy was one of the leading food delivery platforms in India with a market share of
60%. It processed 27 million orders per day, delivered by 250,000 delivery partners across 520
Indian cities.8 Revenues for fiscal 2019 increased by 177% to Rs. 12.97 billion compared to the
previous year. However, losses increased by six times to Rs. 23.64 billion.9 (See Exhibit II).
Swiggy ranked #4 among the Top Food Delivery Apps Worldwide for January 2020 by
Downloads, according to market intelligence firm Sensor Tower10 (See Exhibit III). By April
2020, Swiggy’s market valuation reached US$ 3.6 billion11.
COVID-19 PANDEMIC
The coronavirus pandemic caused by the severe acute respiratory syndrome coronavirus 2
(SARSCoV2) came to light in December 2019 when a cluster of cases was reported in Wuhan
city in Hubei Province, China. The World Health Organization (WHO) named the coronavirus
disease COVID-19 and declared it a pandemic on March 11, 2020. The coronavirus disease, a
respiratory illness, spread largely through droplets in the air which were expelled when an infected
person coughed or sneezed.
As of September 2020, there were 33,849,279 coronavirus cases, 1,021,741 deaths, and
25,151,387 recoveries in 215 countries. In India, there were 6,310,267 COVID-19 cases and
86,748 deaths. In order to curb the spread of the infection, Modi announced a 21-day lockdown
starting March 25, 2020. During lockdown 1.0, almost all services including transport, education,
hospitality, and factories were suspended. However, food delivery platforms were allowed to
deliver essentials. Subsequently, the lockdowns were extended and lasted till May 31, 2020.
Beginning May 30, 2020, the government eased the lockdown restrictions, retaining them only in
containment zones. However, there was a drop in food orders from customers during the lockdown
period as people feared that the virus could spread through food and delivery partners. According
to a report by management consulting firm RedSeer, orders for leading food aggregators in India

d
Scootsy is an intracity service that delivered food, toys, beauty, electronics, and more to a customer’s
doorstep.
e
Kint.io was a Bengaluru-based AI startup that applied deep learning and computer vision to identify
objects in videos.
3
such as Swiggy and Zomatof dropped by about 80% in April 2020 owing to safety concerns, Work
from Home being implemented, lockdown related curfews, operations stoppages, and drop in
discretionary consumption in Tier 2+ cities on which the Foodtech players were heavily dependent
(See Exhibit IV). A Swiggy executive pointed out, “A few restaurants are open for delivery, but
every day there is a drop in the number of people ordering in. If there was an average of 10,000
deliveries in a day, it has fallen to close to 6,000 deliveries.”12
SWIGGY’S INITIATIVES TO COPE WITH THE PANDEMIC
Overhauling Food Order Journey

The public health crisis stimulated a fear initially among customers over ordering food online and
consuming it, especially as they came across news of delivery partners being affected by COVID-
19 in the media. To counter this fear and maximize food safety at each step of the order-delivery
process, Swiggy revamped its order journey (See Exhibit V).
The restaurant partners checked the health of their staff daily by monitoring their body
temperatures and checked for any symptoms related to COVID-19. Swiggy regularly sent
reminders to its delivery partners on best practices of respiratory hygiene, proper method and
frequency of washing hands, as well as identification of associated symptoms. A series of videos
capturing relevant details shot in multiple languages were circulated among them. Swiggy even
distributed N95 masks to all its delivery partners free of cost. Any staff member exhibiting any of
the COVID-19 symptoms was advised to rest at home until cleared by a doctor or they tested
negative post the mandated quarantine period. Swiggy provided financial support to delivery
partners who tested positive.
Swiggy shared a detailed advisory with all of its restaurant partners to guide them on best practices
to maintain hygiene and sanitize their kitchens. These included hand washing regimes, mandatory
temperature checks, use of 3-ply face masks for all staff, and self quarantine measures in case of
any illness. High levels of hygiene were promoted at restaurants as all possible touchpoints at these
places were sanitized every 4 hours. Hand wash stations were maintained at pickup points to allow
delivery partners to practice safe hand hygiene. Swiggy urged its restaurant partners to pack orders
of different people in separate bags to avoid direct contact with anyone during transit.
Restaurants that followed strict safety standards were promoted as those with the ‘Best Safety
Standards’ on the Swiggy app. Customers could get a peek into the kitchens of the restaurants with
the Best in Safety badge and see some of their safety processes through photos in the Safety
Standards section in their menu on Swiggy. Moreover, Swiggy’s ‘Safety First Center’ feature on
the home-screen of its app and web platforms provided information on what the food aggregator
was doing to ensure a safe, hygienic, and healthy ecosystem for everyone. Swiggy’s corporate
teams were mandated to work from home while maintaining a reduced workforce across other
essential centers. Regular communication was sent out to all employees on hygiene practices and
social distancing. Workplaces were fumigated and quarantine transit zones earmarked.
Compulsory temperature and hygiene checks were conducted across all offices.
Through gifs and videos, delivery partners were constantly alerted about the physical distancing
measures to be maintained. Swiggy followed a mask-safety guideline that used a deep learning
algorithm that allowed delivery partners to log in to the app only if they posted a selfie wearing a
mask. Swiggy trained its delivery partners in different aspects from handling food to packaging,
using gloves and masks, washing and sanitizing hands, and also in identifying COVID-19
symptoms. It released an advisory that recommended that customers transfer the food into another
container and reheat it before consuming it.

f
Founded in 2008, Zomato is one of the leading online food delivery platforms in India. The company’s
revenues for the fiscal year ending March 31, 2020 were US$394 million.
4
When a delivery partner was assigned the order, Swiggy applied Just in Time (JIT)g to reduce the
wait time for the delivery partner and to avoid overcrowding of delivery partners at the restaurant.
JIT was achieved by using two machine learning algorithms, one to predict the time taken for a
restaurant partner to prepare the ordered food and the other to predict the expected time taken to
reach the restaurant. Based on these two predictions, an appropriate time was assigned to a
delivery partner to collect the order so that he/she could reach the restaurant just when the food
was ready. In this way, the average wait time reduced by about 25% for delivery partners at
restaurants. In order to further reduce waiting time, delivery partners were assigned to restaurants
rather than being allotted specific orders. For this, food delivery assignments followed the FIFOh
method wherein as soon as the food was ready for a particular order, it was assigned to a delivery
partner who was already present at the restaurant. This ensured that the wait time of the delivery
partner for his order was considerably reduced.
Swiggy ramped up the supply of groceries during the lockdown period. However, a major problem
was that the delivery partners often had to spend a long time at the grocery stores while the items
were being packed. To reduce this wait time, Swiggy stationed some agents at the stores to pack
the orders. These agents packed the contents of the order and then sent a notification when the
order was ready to be delivered. A delivery partner was assigned to the order only after the
notification was received. And once the delivery partner was notified that the order was ready, he
picked it up without wasting any time in queues or waiting for it to be packed. This drastically cut
down the time the partner had to spend at the store. Swiggy encouraged contactless delivery
among its customers wherein delivery partners dropped the order off at the doorstep of the
customer and submitted a picture of the delivery every time they delivered the order.
Diversification
As the order volumes continued to decline drastically, Swiggy started to shift its focus toward online
grocery delivery in order to tap into alternative revenues streams and cater to the increasing demand
for groceries as a result of panic purchases. Swiggy rebranded its Swiggy Go platform to Swiggy
Genie where customers could order groceries not just from Swiggy grocery/ store partners but from
any store nearby at a fee. Swiggy expanded its online grocery and household essential delivery
services to 125 cities across India as of May 2020 by partnering with local distributors, FMCG
companies, and drug makers like Cipla. As part of its business continuity plans, Swiggy partnered
with the leading skin care brand Nivea India Pvt. Ltdi to deliver hygiene and essential products at the
customer’s doorstep within 60-90 minutes during the lockdown period. This initiative was started in
Mumbai, and was subsequently extended to 30 more cities in India by May 2020.
In August 2020, Swiggy launched Instamart to deliver groceries and daily essentials at the
customer’s doorstep within 45 minutes. The procurement and delivery would take place through
dark stores which were traditional retail stores that had been converted into local fulfillment
centers where the products were sourced from third parties. Gurugram was the first city where
consumers could access ‘Instamart’ within the Swiggy app. “Through Instamart, we want to
introduce the convenience grocery category in India. With the fastest deliveries in the segment
(30-45 minutes), day and night serviceability (7 am-12 midnight), a wide assortment across
categories such as instant meals, snacks, ice creams, beverages, fruits & vegetables, Instamart will
address the unmet grocery needs of the time-pressed, convenience-seeking urban consumer,”13
said a spokesperson from Swiggy.

g
Just in Time (JIT) is an inventory management system where the products are available only on demand
with no stockpiling.
h
FIFO – First In First Out method is an asset management and goods valuation method used to calculate
the cost of goods sold by assuming that the first goods purchased are the first goods sold.
i
Nivea India Pvt. Ltd., a subsidiary of Germany based Beiersdorf AG, is one of the largest skincare brands
in the world.
5
In June 2020, Swiggy integrated the operations of Scootsy within the Swiggy app as it felt that the
premium food delivery segment had a broad margin with the average order value on Scootsy being
about Rs. 1,000 compared to Rs. 400 for Swiggy. Earlier, Scootsy was operational only in Mumbai
city. But with the COVID-19 pandemic and safety measures needing to be in place, the company
believed that the customers might prefer top-notch restaurants as they expected them to follow the
prescribed protocols.
After its entry into the online grocery delivery space, Swiggy even started delivering liquor from
authorized outlets to the homes of people in three Indian states – Jharkand, Odisha, and West
Bengal.14 Authorized retailers holding a license were listed on the Swiggy app and customers
could order through the app provided they filled in certain details like customer age, user name,
and government ID that would be used for authentication when the order was delivered. Anuj
Rathi, Vice President of Products at Swiggy said, “By enabling home delivery of alcohol in a safe
and responsible manner, we can generate additional business for retail outlets while solving the
problem of overcrowding, thereby promoting social distancing.”15
Partnerships
Adding another arm to its business model, Swiggy in association with Marriott Internationalj
started the Marriott on Wheels delivery service in May 2020. The service aimed to deliver the
customer’s favourite cuisines and signature dishes from Marriott hotels located in Agra,
Bengaluru, Chandigarh, Chennai, Delhi, Goa, Hyderabad, Kolkata, Pune, and Mumbai. Swiggy
also partnered with ITC Hotelsk to deliver curated gourmet dishes from the latter’s popular food
chains – ITC Gardenia (Bangaluru), ITC Windsor (Bengaluru), ITC Grand Chola (Chennai), ITC
Grand Goa (Goa), ITC Kohenur (Hyderabad), ITC Rajputana (Jaipur), ITC Royal Bengal
(Kolkata), ITC Maurya (New Delhi), and Welcomhotel Bengaluru. ITC Hotels aimed to reach out
to a larger customer base by offering its unique culinary experience at the homes of people by
using Swiggy’s advanced distribution network. All the orders and takeaways were executed
through contactless delivery and cashless payments.
Swiggy also partnered with social networking site Instagraml to help restaurants with food order
discovery and to assist small businesses to survive amid the coronavirus-led crisis. Under this
initiative, businesses could share Instagram’s food order sticker on their stories and users could tap
on them to place their orders through the Swiggy website. Users could also re-share the stickers
with their followers to spread the word. “Supporting the small business ecosystem, especially the
restaurant business, which is severely affected, is a huge priority for us. As physical distancing
continues and businesses innovate with online models, features like the food order sticker from
Instagram will aid engagement between customers and their favourite food businesses, and ideally
have a positive impact on increasing online food delivery order volumes,”16 said Srivats TS, Vice
President Marketing, Swiggy.
Support to Restaurant Partners
In June 2020, Swiggy launched a ‘Jumpstart Package’ to assist all its restaurant partners reeling
under the impact of COVID-19. The package offered to restaurants, which were either already
operational for delivery or were restarting business operations after the implementation of Unlock
1.0, focused on easing key aspects involved in resuming operations and reducing the overall
investment required to bring back customers. As part of the package, Swiggy provided safety
grade packaging material and safety kits to restaurants at a discount of up to 40%. Business
booster programs that improved visibility and drove order volumes were offered at heavily

j
Marriott International Inc. is a US-based multi-national hospitality corporation with more than 6500
properties that are into hotels and lodging facilities.
k
ITC Hotels is one of the largest hotel chains in India with more than 100 hotels in 70+ locations across
the country.
l
Instagram is a photo and video sharing social networking service owned by Facebook, Inc.
6
subsidized rates. Further, restaurants could access subsidized financing through Swiggy’s Capital
Assist program. Bi-weekly payment options to survive the financial constraints and enable smooth
cash flows for partners were also activated. Reportedly within a week of the launch of the package,
more than 40,000 restaurant partners availed it. In June 2020, Swiggy in collaboration with the
National Restaurant Association of Indiam (NRAI) launched a campaign #AtYourService, urging
customers to support their favorite restaurants by ordering or dining in.
To boost the morale of its restaurant partners, hygiene ratings and visual safety assurances to
customers were incentivized. Benefits under the ‘Jumpstart Package’ were maximized for
restaurants with higher hygiene ratings, in a bid to incentivize strict adherence to safety and hygiene
protocols. According to Paul Varghese, Vice President, Supply, Swiggy, “Ensuring business revival,
continuity and growth for restaurant partners will be absolutely crucial to enabling Swiggy and the
industry overcome this challenging phase. Swiggy’s Jumpstart Package has been strategically
devised to achieve this by combining our learnings with clear insights from our research on present
consumer needs. This initiative will catalyse our efforts to drive focused execution in enabling quick
wins for our restaurant partners while catering to evolving consumer needs.”17
Sustenance Support to Delivery partners and General Public
During the lockdown period, Swiggy tied up with commercial kitchens, NGOs, and state
governments to provide more than 250,000 daily meals to underprivileged and migrant laborers
under its “Hope, Not Hunger” initiative. It also set up ‘The Swiggy Hunger Savior Covid Relief
Fund’ for the welfare of its delivery partners and their families with primary contributions being
made by Swiggy’s founders, senior leaders, employees, and investors. As of October 2020,
Swiggy had raised Rs. 61.1 million toward the fund and aimed to reach a target of Rs. 100 million
by the end of 2020.
Through this fund, delivery partners were covered under Income Protection Insurance, where up to
14 days of income was assured if they tested positive for COVID-19. The fund would also be used
to provide sustenance support through food and grocery care packages to the partners and their
families who were facing hardships. Additionally, the medical/hospitalization expenses related to
COVID-19 of parents and family members of delivery partners who were not covered by medical
insurance would also be covered by the fund. Swiggy introduced a tipping feature on the app as
well which allowed customers to support its delivery partners during the crisis. “Our industry is
built on the efforts of our delivery partners. It is in times like these, that we come together to
appreciate and support those who are putting their lives at risk to serve others. To assist our
delivery heroes during these testing times, we have initiated this special fund which will be
supported by Swiggy and our investors. I am overwhelmed by this collective initiative to support
one another, while also doing what we do best – serving our customers,”18 said Majety.
Restructuring
Swiggy began a restructuring exercise in May 2020 when it laid off 1,100 employees across
different grades and functions in the cities and at the head office in order to realign resources to
create capacity in higher potential areas. The effort was aimed at diverting attention toward the
high-potential areas which would bring business back to pre-COVID levels. Later, in July 2020, it
laid off 350 more employees as part of the final step in its restructuring exercise.
However, the dismissed employees were given a robust care package that included a minimum of
three months to eight months of salary based on tenure along with an extra month of ex-gratia for
every year served in addition to their notice period pay, accelerated ESOPs, extension of accident
and term insurance for impacted employees, and health insurance for them and their families till
December 2020.19 The severance package also included learning support for both technical and
professional skill development, job placement, and counseling services, among others. Commenting

m
Founded in 1982, NRAI represents independent and chain restaurant owners and operators in India.
7
on the restructuring, Majety said, “The core food delivery business has been severely impacted and
will stay impacted over the short term but is expected to start growing again after that. We also need
to build a much leaner organisation and reduce costs to be able to withstand any further risks from
the uncertainty. We are choosing to scale down or shut down adjacent businesses that are either
going to be highly volatile or will not be highly relevant for the next 18 months.20
Swiggy said it was also going to scale down or shut down adjacent businesses that were either
going to be highly volatile or would not be highly relevant for the next 18 months. A case in point
was Swiggy Access kitchens, with Swiggy shutting down multiple Access kitchens after the
outbreak. “The biggest impact here is on the Cloud kitchens business, with many unknowns about
volumes through the year. Since the onset of Covid-19, we have already begun the process of
shutting down our kitchen facilities temporarily or permanently, depending on their outlook and
profitability profile. We are already operating at significantly lower levels on our staffing and
physical infra than our earlier footprint, and will continue to optimize before we get more clarity
on order volumes for food delivery,”21 said Majety.
RESULTS
According to Swiggy, demand had bounced back to pre-COVID levels as it onboarded thousands
of restaurants every month and more customers ordered food online. In October 2020, Swiggy
announced that its pan-India food delivery had recovered to around 80-85% of pre-COVID-19
order value as the unlock phase progressed and more restaurants resumed operations. The recovery
was further fueled by IPL 2020n which led to a surge in orders. “Our pan India food delivery has
recovered around 80-85 per cent of pre-COVID order value. In many markets, it is at 95 per cent,
some even over 100 per cent. Overall Swiggy has delivered over 100 million orders since the
beginning of the lockdown,”22 stated the company.
Swiggy said that more than 200 cities on its platform had reached 90% of pre-COVID order value
or gross merchandise valueo (GMV), with 70 cities seeing full recovery to pre-COVID levels as
the unlock progressed and consumers' fears around the transmission of COVID-19 infection
through food slowly dissipated. On the supply side, Swiggy witnessed more than 7,000 new
restaurants being onboarded per month on its platform. Prior to the COVID-19 outbreak in the
country, this number had stood at 4000. As of October 2020, Swiggy had about 100,000
restaurants on its platform. Talking about Swiggy’s recovery, its COO, Vivek Sunder, said, “You
are speaking to us in arguably much better times than we were two-three months ago. At that point
of time, most people had written off 2020 as a sort of gone case. But I would look at it as a glass
half full. And say that there's a lot that we have seen since the unlock has happened for us to be
happy about. It is true that the restaurant industry has been battered but a lot of them who we
thought are going to never recover, have actually come back and almost in a phoenix sort of
fashion, come back from the dead.”23
CHALLENGES AHEAD
According to analysts, though Swiggy’s food orders were reaching pre-COVID levels, it faced
several challenges going forward. One of the biggest challenges was growing competition. In May
2020, ecommerce giant Amazon launched its online food delivery service called Amazon Food in
Bengaluru. According to some analysts, Amazon’s entry into the food delivery space would
impact the business of Swiggy and its competitors including Zomato and Uber Eats.p “We believe

n
The Indian Premier League (IPL) is a professional Twenty20 cricket league held annually in India.
o
Gross Merchandise Value is the total sales value of the merchandise sold through an online retailing
marketplace.
p
Uber Eats is a US-based online food delivery company launched by Uber in 2014. Uber Eats’ business in
India was acquired by Zomato for US$ 206 million in January 2020. It was one of the top five food
aggregators in India as of 2019.
8
the entry of a cash-rich player such as Amazon has the potential to impact the path to sustainable
profitability for both the incumbents [Zomato and Swiggy] over the medium-to-long-term,”24
stated a report by financial services company, JM Financials. Some analysts were skeptical about
Swiggy’s foray into hyperlocal deliveries and grocery and wondered whether it would pay off as
the market was very challenging. “Grocery is a thin margin business. If they cannot make food
delivery viable, making grocery delivery work will be a greater challenge,”25 said Rohan Agarwal,
Director of RedSeer Management Consulting.
Though the lockdown had been relaxed, the prospects for restaurant-prepared food did not seem to
be healthy in the near future, said analysts. According to a survey carried out in September 2020
by Local-Circles, a community social media platform cum-polling platform, 87% of the 24,000
respondents said that they did not want to visit a restaurant in the next 30 days due to the fear of
getting infected. Around 65% said they would not order restaurant food through food delivery apps
in the coming months. A majority was also reluctant to spend on eating out. According to N
Chandramouli, CEO of Brand Intelligence and Data Insights Company Trust Research Advisory,
“Swiggy and Zomato will have to innovate to stay relevant for themselves, and also their riders. If
the riders jump ship, they won’t have anything. Today, it is about who is able to meet consumers’
needs and deliver on time [….]. The one who is able to crack a comprehensive deal for all the
stakeholders, like the consumers, riders, restaurants, etc., will win.”26
In September 2020, Swiggy’s delivery partners in Hyderabad went on strike due to changes in
payout rates. They claimed that during the COVID-19 lockdown, their minimum payout rate per
order had been reduced from Rs 35 to Rs 15. Earlier in August 2020, delivery partners in Chennai
too went on strike for the same reason. Managing personnel overhead costs was a challenge for
Swiggy as it had more than a lakh delivery partners on its rolls, said analysts. Earlier in May 2020,
Jaimini, one of Swiggy’s founders, quit the company to join Pesto Tech, a career accelerator
startup. However, Jaimini would continue to be on the board of the company. He was replaced by
Dale Vez, Head of Engineering & AI at Swiggy.
Moreover, according to some analysts, the souring relationship between restaurant owners and
delivery platforms over commission payouts would make an already bad situation worseq. The
NRAI was allegedly encouraging member restaurants to build their own technology partnerships.
“Commissions and exclusive deals are a few of the reasons many restaurants are looking to set up
their niche customer base outside the aggregators through their own online channels,”27 said
Rishabh Mastaram, founder of the law firm RGM Legal.
The food-delivery business in India was picking up but at an excruciatingly slow pace. The food
delivery market in India was set to double by 2025 to US$8.6 billion from US$3.6 billion in
2020.28 In order to accelerate growth, Swiggy might need to innovate, cut down costs, and come
up with pocket friendly home delivery menus to retain customers, said analysts. Swiggy was
hopeful of profits as more restaurants resumed operations and order volumes grew. “The market
will start looking up again once the restrictions start going down. This will certainly help food
tech and food delivery platforms to regain business…. unfortunately, one still does not know of the
end date of the pandemic,”29 noted Dipti Lavya Swain, partner at corporate law firm HSA
Advocates.

q
2019 was marked by a tussle between NRAI and Zomato over commission payout through multiple “log
out” campaigns by restaurants.
9
Exhibit I:
Swiggy’s Revenues (2014-19)
(in Millions of Indian Rupees)
Compiled from various sources
Exhibit II:
Key Financials of Swiggy (2018 and 2019)
(In Millions of Indian Rupees)
Source: https://entrackr.com/2019/12/chasing-scale-swiggys-losses-rise-500-to-rs-2636-cr/
10
Exhibit III:
Top Food Delivery Apps Worldwide for January 2020 by Downloads
Overall Downloads App Store Downloads Google Play Downloads
1. Uber Eats 1. Uber Eats 1. Uber Eats
2. Grab 2. DoorDash 2. Grab
3. Zomato 3. KFC Home Delivery 3. Zomato
4. Swiggy 4. Grab 4. Swiggy
5. iFood 5. Luckin Coffee 5. iFood
6. Domino’s 6. Domino’s 6. Foodpand
7. DoorDash 7. US Grup Take-Out 7. Domino’s
8. FoodPanda 8. Hungry? 8. Gojek
9. KFC Home Delivery 9. Yelp 9. Rappi
10. Rappi 10. Box Horse 10. Glovo
Source: “Top Food Delivery Apps Worldwide for January 2020 by Downloads,” www.sensortower.com,
February 19, 2020.
Exhibit IV:
Average Daily Orders for Swiggy and Zomato (Jan 2020-April 2020)
(in thousands)
Source: https://redseer.com/newsletters/india-ecommerce-and-foodtech-covid-19-impact-and-way-forward/
11
Exhibit V:
Food Order Journey at Swiggy
Step 1. Before the Order was Placed
Step 2. When the Delivery Partner was Assigned to Order
Step 3. When the Order was Picked
Source: https://bytes.swiggy.com/facing-up-to-a-pandemic-a-look-at-swiggys-efforts-to-counter-the-covid-19-
threat-7b9ec0bd7e5f
End Notes:

1
Pratik Bhakta & Priyanka Sahay, “What’s Next for Zomato and Swiggy after the Coronavirus
Clobbering?” www.moneycontrol.com, July 31, 2020.
2
Pratik Bhakta,” Zomato Claims Business Back to Pre-COVID Levels, While Swiggy Records Total
Order Values at 85%,” www.moneycontrol.com, October 13, 2020.
3
Peerzada Abrar, “Food Delivery Startup Swiggy Picks Up Rs 12 Crore from Accel, SAIF,”
www.economictimes.indiatimes.com, April 3, 2015.
4
Sayan Chakraborty, “Swiggy Posts 65-fold Increase in Losses,” www.livemint.com, November 18, 2016.
12

5
“Swiggy FY 14-15 Revenue at INR 11.6 Lacs, Losses at INR 2.1 Crores,” www.tofler.in, January 12, 2016.
6
Sayan Chakraborty, “Swiggy Posts 65-fold Increase in Losses,” www.livemint.com, November 18, 2016.
7
Supraja Srinivasan, “Swiggy Acquires Scootsy in all-cash Deal Valued at Rs 50 Crore,”
www.economictimes.indiatimes.com, August 3, 2018.
8
Moulishree Srivastava, “Online Food Delivery Startup Swiggy Raises USD 113 Million Led by
Naspers,” www.kr-asia.com, February 20, 2020.
9
S. Mahadevan, “Swiggy’s Losses Increased Six-Fold to Rs 2,364 Crore in FY19,” www.thenewsminute.
com, December 17, 2019.
10
“Top Food Delivery Apps Worldwide for January 2020 by Downloads,” www.sensortower.com,
February 19, 2020.
11
Sophia Kunthara, “India’s Swiggy Reaches $3.6B Valuation with Latest Raise of $43M,”
www.news.crunchbase.com, April 6, 2020.
12
Sindhu Kashyaap, “How Coronavirus has Landed Foodtech Players Swiggy and Zomato a Double
Whammy,” www.yourstory.com, March 27, 2020.
13
Harsh Upadhyay, “Swiggy Launches 45-min Grocery and Essentials Delivery Service Via Instamart,”
www.entrackr.com, August 10, 2020.
14
“Swiggy Expands Alcohol Delivery to West Bengal after Jharkhand, Odisha,” www.livemint.com, June
4, 2020.
15
Kritti Bhalla, “Swiggy, Zomato Begin Alcohol Home Delivery, Starting with Jharkhand,”
www.inc42.com, May 21, 2020.
16
Saumya Tiwari, “Instagram Partners Swiggy, Zomato to Help Restaurants with Food Order Discovery,”
www.livemint.com, June 4, 2020.
17
“Swiggy Launches ‘Jumpstart Package’ to Assist Restaurants Resuming Operations,” www.cnbctv18.
com, June 16, 2020.
18
“Launching the Swiggy Hunger Savior Covid Relief Fund,” www.blog.swiggy.com, March 31, 2020.
19
Sandeep Soni, “Swiggy Layoffs Round 2: 350 People Fired in ‘final’ Realignment as Food Delivery
Recovered Only 50%,” www.financialexpress.com, July 27, 2020.
20
“Swiggy to Axe 1,100 Jobs as Covid-19 Crisis Hits Business,” www.economictimes.indiatimes.com,
May 18, 2020.
21
“Swiggy Sacks 1100 Employees as Covid-19 Derails Cloud Kitchens, Food Delivery,”
www.outlookindia.com, May 18, 2020.
22
“Swiggy Says Food Delivery at 85% of Pre-Covid Value,” www.economictimes.indiatimes.com, October
23, 2020.
23
Chandra R Srikanth, “Swiggy 'Super-Optimistic' as Food Delivery Bounces Back to Pre-COVID Levels,”
www.timesnownews.com, October 9, 2020.
24
Harshit Rakheja, “Amazon’s Entry in Food Delivery Set to Challenge Zomato, Swiggy Duopoly,”
www.inc42.com, August 13, 2020.
25
Pratik Bhakta & Priyanka Sahay, “What's Next for Zomato and Swiggy after the Coronavirus
26
Abid Hussain Barlaskar, “Amazon Enters Food Delivery Space: How Bad is the News for Swiggy and
Zomato?” www.afaqs.com, May 22, 2020.
27
28
Sanchita Das, “Amazon’s Entry in Food Delivery is a Speed Bump on Zomato and Swiggy’s Race to
Profitability, Says Report,”, www.businessinsiderin, August 12, 2020.
29
Clobbering?” www.moneycontrol.com, July 31, 2020
13

Swiggy: Delivering On Business Continuity Amidst COVID-19: IBS Center For Management Research

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Swiggy: Delivering on Business Continuity amidst COVID-19

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Swiggy: Delivering on Business Continuity amidst

SWIGGY’S INITIATIVES TO COPE WITH THE PANDEMIC

Overhauling Food Order Journey

Compiled from various sources

Step 2. When the Delivery Partner was Assigned to Order

Step 3. When the Order was Picked

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