ENP 3711

ASSIGNMENT 01
A CASE STUDY ON THE BUSINESS PLANS OF SWIGGY AND
ZOMATO

YASH SHARMA
]BBA SEM 6 180010201076
20 APRIL 2021

CASE STUDY ON SWIGGY:

Swiggy is food ordering and delivering company based in Bangalore. It provides a single
window for ordering from a wide range of restaurants and have their own exclusive fleet of
delivery personnel pick up orders from restaurants and deliver it to customers.It is a
complete food ordering and delivery solution that connects neighborhood restaurants with
urban foodies.

Swiggy Founders:

Swiggy was founded by Nandan Reddy, Sriharsha Majety, and Rahul Jaimini in August
2014. Nandan Reddy aged 29 and Sriharsha Majety aged 31 both are both alumni of Birla
Institute of Technology and Science (BITS) Pilani while Rahul Jaimini aged 31 is an
alumnus of IIT Kharagpur.
Nandan Reddy and Sriharsha Majety in 2013, started their first venture named Bundl, which
was a logistics aggregator that connected small and medium companies to courier service
providers. After almost a year in business, they realized their focus had to change. They
had spotted the need for an online hyperlocal logistics company in the restaurant industry.
Then In August 2014, the duo rolled out the online food ordering and delivery startup
Swiggy, along with Rahul Jaimini.

Swiggy Journey:

Swiggy began its Journey from Bengaluru with six delivery executives and 25 restaurants
on its platform. In the time of 3 years, it has scaled up with over 6,000 delivery executives
across India in more than 8 cities like Delhi-NCR, Mumbai, Bengaluru, Hyderabad, Chennai,
Kolkata, and Pune.
Swiggy Business Model:

Swiggy has two major revenue streams.

1. The major part of Swiggy’s revenue from commission it collects from restaurants
for lead generation and for serving as a delivery partner.
2. Swiggy also charges a nominal delivery fee from customers on orders below a
threshold value which is 200 rupees for most cities.

Swiggy Funding:

Swiggy is backed by one of best investors available in the market. Swiggy has raised a total
of 75.5 million dollars in funding from various investors, including Bessemer Venture
Partners, Norwest Venture, Accel Partners, SAIF Partners, Harmony Venture Partners, RB
Investments and Apoletto.

Swiggy Competitors:

Indian food delivery market is valued at 15 billion dollars and set for exponential growth.
Food delivery has become a very competitive market in India. Swiggy is in direct
competition with major on-demand food aggregators like Zomato. Whereas there are other
small startups like Foodpanda and Faasos are also in the competition.

Now that Uber has finally released its food delivery app UberEATS in Mumbai and Google
has launched its hyperlocal services and meal delivery app Areo in Bangalore and Mumbai.
The competition is getting tougher for Swiggy. Swiggy is aiming to maintain its market share
by keeping their maximum focus on 8 major cities which are Mumbai, Pune, Bangalore,
Hyderabad, Chennai, Delhi, Gurgaon, and Kolkata.
Swiggy Marketing Strategies

Swiggy’s marketing strategy consists of both online and offline marketing campaigns.It
promotes its campaigns via Facebook, Twitter, Youtube, Pinterest, and Instagram. Some of
its campaigns include Second Mom,#DiwaliGharAayi, #SingwithSwiggy and Know your food
series of pictures and food walks in a local area. The company has successfully built its
brand awareness and connects with its audience through these channels. Their facebook
page is quite active with regular updates, averaging to one post a day. Swiggy uses its
Social media not only for campaigning but to engage with its customers from solving the
grievances to taking the feedback.

BUSINESS PLAN OF SWIGGY:

 BUSINESS MODEL CANVAS OF SWIGGY

The business model canvas of Swiggy is based on a hyperlocal on-demand food delivery
business operation. Working as a bridge between restaurants and customers, Swiggy
utilizes an innovative technology platform that works as a single point of contact.

Their app allows urban foodies to order food from nearby restaurants and get it delivered at
their doorstep. A broad list of restaurants and their menus with prices are exhibited in the
app to choose and order from.

Apart from accumulating restaurants, Swiggy also has its own fleet of delivery partners.
They pick up orders from partner restaurants and deliver it on-demand in less than 30
minutes.

Because Swiggy operates as a dual-partnership model, it also benefits restaurants that can
receive more orders from customers using their own Swiggy app.
Once the order is placed, they will know the order details, prepare the order and deliver it to
Swiggy drivers. This way, restaurants don’t need to use their own delivery personnel, saving
costs and efforts.

All the Swiggy drivers in the vicinity receive a broadcast signal on their own Swiggy drive
app when the order is placed. After they accept the order, they deliver it right on the
customer’s doorsteps.

SWIGGY IOS APP STORE

1. Customer Segments of Swiggy

The customer segments of Swiggy include those people who do not wish to go out to
restaurants and eateries to buy food. People who want to order food online and want to get
it delivered at their doorsteps are the principal customers of Swiggy.

After its recent business expansion, people who want to buy and get other products
delivered from nearby shops and stores of groceries, pharmacies, electronics, flower shops
and gift shops in the city are also Swiggy’s customers.
Few examples of stores currently available on Swiggy platform are Sodhi Super Marche,
Garg Dastak, Best Basket and V.M Retail.

2. Value Propositions of Swiggy

The main value proposition of Swiggy is its no-restriction order policy and efficient online
payment system.

● Swiggy has no minimum order requirement for delivery which is why it often receives
orders amounted to less than Rs. 100. It is the reason for Swiggy scaling up to 14
million orders per month.
● Easy access to customers on Swiggy’s app is the main value proposition offered to
restaurant partners on the platform. Also, partner restaurants that join Swiggy’s
Access can save up to 25% of their operational costs.
● Swiggy Stores deliver groceries, flowers, medicines, and other things to the doorstep
of its customers within an hour.
● Swiggy Go – It offers instant pick & drop services used by customers to send
packages, lunch boxes to their kids, documents to the office, and parcels anywhere
across the city. Also, customers can use Swiggy Go services to drop laundry or fetch
forgotten keys.
Swiggy provides 8 different payment methods for its customers to pay conveniently for
Swiggy orders. These can be categorized in 3 ways:

Digital Wallets

1. Paytm – Pay through your Paytm account and enjoy plenty of wonderful offers and
food deals.
2. PhonePe – Get the ultimate convenience by paying through PhonePe, the simplest
digital wallet for online payment.
3. Freecharge – Swiggy has also included Freecharge as an online payment method to
facilitate its customers efficiently.
4. Mobikwik – Now you can collect SuperCash through Mobikwik’s offers. So, get ready
to avail amazing benefits on many services.
Cards

1. Credit and Debit Cards – Via Swiggy’s net banking facility, you can use any debit and
credit card. Plus, you can also avail great offers on them, and you can even save
your card details for your future payments.
2. Sodexo Meal, Ticket Restaurants Meal & Zeta Food Card – Got these meal cards?
Great! Use them on Swiggy for your food orders.

Others

1. LazyPay – Pay now or pay later for your meals, LazyPay is here on Swiggy for you
to handle your lazy moods of payments!
2. Cash-On-Delivery – Old is gold, isn’t it? Pay for your Swiggy orders in cash if that is
more convenient for you.

Another value proposition is its delivery competency. Its fleet size increased to 45,000
delivery personnel. It has over 20,000 active restaurant partners on its platform.

It’s operating in 8 cities and has even launched a central kitchen base facility for various
restaurants. Swiggy has more than a million app downloads.

3. Customer Relationships of Swiggy

Swiggy has positive customer relationships. It provides 24/7 active customer support to help
customers anytime, anywhere. It uses ‘Customer Support Chat’ services.

It also has active social media pages where it responds promptly. To stay in touch with its
customers and partners, it has developed excellent rating, review, and feedback systems.
4. Channels of Swiggy
The channels of Swiggy are mobile app, websites, and digital marketing. Its mobile app is
available on both Android and iOS.

In 2019, Swiggy launched Swiggy Stores and Swiggy Go to expand beyond food delivery.

5. Key Resources of Swiggy

As it has partnerships with local restaurant and shops, its main resources are local partners.

To name a few, Biryani Blues, Keventers, BombayKery, Wok Paper Scissors, and
Yogisthaan are the bestselling restaurants at Swiggy.

Other key resources are delivery providers and its own human resources to manage
administrative and technical operations. Technology is another resource it uses to operate
its apps.

6. Key Activities of Swiggy

Its key activities include:

1. Building partnerships with eateries and retail shops

2. Hiring delivery providers and suppliers (full-time/part-time/freelancers)
3. Acquiring customers and managing their orders
4. Managing delivery and payment process
5. Managing technical operations
6. Updating system and building IT infrastructure
7. Handling queries and concerns of customers and partners
8. Picking and delivering items for customers via Swiggy Go
7. Key Partners of Swiggy
The key partners of Swiggy are:

● Restaurants and shops – Restaurants who wish to have food delivery services to
provide customers with food on-demand. Other than eateries, key partners of Swiggy
are shops (like pharmacies, groceries, etc.) who wish to offer their own products and
services as Swiggy’s partner.
● Grocery Stores like Sodhi Super Marche, Garg Dastak, and Best Basket are few of
the Swiggy partners. While it is now on the exploratory talks with many online
pharma players like MedPlus, Medlife, PharmEasy, and Myra to partner with them.
● Instagram – Swiggy recently partnered with Instagram allowing businesses to share
Instagram’s food order sticker on their stories with customers. Users can tap on the
stickers to place similar orders using Swiggy’s website.
 ● Delivery providers – These are the delivery suppliers. They can be full-time or
freelancers who wish to work and earn some extra money. For the first 4 km,
Swiggy pays delivery boys Rs. 4 per km. It then pays Rs. 6 per km after they
have traveled 4 km. Besides, they are paid an additional Rs.20 in unseasonal
weather like rainy days. Also, Incentives are given on the basis of productive
performance.

8. Cost Structure of Swiggy

Swiggy has to incur costs and expenditures for its day-to-day functions. Its major cost
sources are:

● Payroll expenses for its employees and delivery partners. It also includes incentives
and benefits which Swiggy offers to restaurants. For example, giving a commission
of about 2- 3%.
● Costs of application and website development
● Running costs and maintenance charges
● Administrative, advertising, and marketing costs
 ● Additional costs in terms of promotional offers and benefits given to customers
● Kitchen base-like facility setup and maintenance costs
● Returns, refunds, and miscellaneous expenses

9. Revenue Streams of Swiggy

Now, comes the most critical question:

How does Swiggy make money?

To get a definitive answer, we need to analyze Swiggy’s Revenue Model. As it’s expanding
its business strategy and operations day by day, the revenue streams of Swiggy are also
considerably increasing.

There are mainly 6 revenue streams at present through which Swiggy makes money:

1. Delivery charges

The first type of revenue stream Swiggy obtained is from its customers. A nominal delivery
fee of Rs. 20 to Rs. 40 is charged from customers on orders below a threshold value of Rs.
250. Swiggy raises the charges during high order demands or unusual weather conditions.

2. Commissions

Swiggy acquires another major part of the revenue stream from commissions. It collects
commissions from restaurants to generate sales leads and to deliver their food items
through Swiggy’s fleet. Restaurants have to pay 15% to 25% on every order placed from
Swiggy’s website.

3. Advertising

Swiggy earns advertising revenue in the following ways:

 ● Banner Promotions – Swiggy promotes and displays ads of various restaurants on
its app. Restaurants, related to different regions, receive greater visibility via banner
promotion and pay price for the displayed page.
● Priority listing of restaurants – Swiggy charges restaurants premium rates to give
them priority in the list of available restaurants. A restaurant has to pay high if it
wants to be displayed higher on the list.

4. Swiggy Access

An entirely new idea based on the cloud kitchen concept, Swiggy came up with its Swiggy
Access facility. It provides ready-to-use kitchen spaces to its restaurant partners in those
areas where they don’t operate.

With the aim of bringing food nearer to its customers, Swiggy enables restaurants to set up
their kitchens in new locations and let the food delivered to them at the fastest speed.

Expecting around 25% of revenues in 2 years, Swiggy expands its cloud kitchen model to
include 30 restaurants onboard with 36 kitchens to four new cities.

5. Swiggy Super

Swiggy has launched a membership program called ‘Swiggy Super’ for customers. This
program offers unlimited free delivery on all orders above ₹99. After subscribing to this
program, customers don’t have to pay surge pricing during excessive demands.

6. Swiggy Go

Another revenue stream for Swiggy is a concierge service Swiggy Go that was launched in
2019 to offer instant pick & drop service.

Through Swiggy Go, the company earns by helping customers to send, pick, and drop
anything to and from different locations anywhere across the city.
7. Affiliate Income

Swiggy earns revenue by partnering with various financial institutions like Citibank, HSBC,
and ICICI Bank. This affiliate income is a new yet successful revenue stream where both
parties benefit. It also allows customers to receive several credit card offers from those
financial companies.

HOW DOES SWIGGY MAKE MONEY ?

CONCLUSION
Swiggy has undoubtedly become a leading online food ordering and delivery company.
Having changed the entire landscape of how India eats, its innovative business model has
made the life of every foodie easier, tastier, and more fun.
With its fast deliveries, live order tracking, and no restrictions on order amount, Swiggy is
not far from taking a huge chunk of India’s food-tech market. It has been demonstrated
through Swiggy’s business model.

CASE STUDY OF ZOMATO :

About:

Zomato was founded by Deepinder Goyal and Pankaj Chaddah in

2008 and is the Indian restaurant aggregator and food supplies
service. Zomato provides restaurants with information, menus,
and user feedback, as well as food supply optioned from partner
restaurants in specific cities.

STORY BEHIND THE Concept:

Zomato is an Indian group founded in Delhi NCR in 2008 by

Deepinder Goyal and Pankaj Chaddah.

Zomato originally began as a ‘’Foodie Bay” but was renamed

‘’Zomato; in November 2010. Two IIT graduates, Deepinder Goyal
and Pankaj Chaddah were formed to found Zomato. In July 2008,
 Zomato was created. In New Delhi, they were Bain & Co-workers.
Deepinder once saw his colleagues who were continuously
demanding food from different restaurants. That’s when
Deepinder came up with the idea to turn these restaurant menus
into a digital application.

ZOMATO Business Plan:

Zomato is an Indian food supply company offering the search

application.

Which have restaurant detailed details?

It assists consumers globally in discovering rates, reviewing

restaurants, and creating a network of trustworthy foodies.

● Restaurant Listings / Advertising: Zomato was merely

a listing website and a restaurant directory in its first
avatar. This brought in revenues from ads from
restaurants that entered the network. Extending this
further after the introduction of food delivery and
restaurant reservations, Zomato now charges
restaurant commissions to be prominently put on the
list. Restaurants can pay for promoting their events or
deals as well as their overall banner which brings
 increased visibility and conversions from users of
Zomato.
● Food Delivery: For example, Zomato charges a
commission to the restaurants on the basis of orders
through its food delivery company. Although users pay
a delivery fee, Zomato receives a commission for each
delivery to restaurants which are then divided
between the delivery partner and the client.
Restaurant commissions differ depending on whether
Zomato is shipping, or whether the restaurant is using
its own riders. This is said to add to the overall profits
of the company in a limited way due to the massive
rivalry and the need for profound discounts etc.
● Subscription programs: With Zomato Gold for
customers and guests, and restaurant subscription
options, Zomato has opened up a steady revenue
stream. While users are paying a subscription fee to
access the Zomato Gold loyalty program which brings
exclusive deals, restaurants are also paying a monthly
fee to be part of Zomato’s bouquet. Restaurants also
pay Zomato a monthly fee for miscellaneous services
such as live monitoring, tamper-proof packaging
branded with Zomato, and more.
● Live Events: Zomato joined last year’s branded live
events market with Zomaland. Zomato charges an
entry fee for users to visit Zomaland, where they can
experience live musical performances and other
activities, in addition to food. It had organized the
entertainment carnival in Delhi, Pune, and Bengaluru
in 2018, where over 100 K people appeared to be
claimed by Zomato. Zomaland heads for Pune, Delhi,
Bangalore, Hyderabad, Mumbai, Jaipur, Pune,
Chandigarh, and Kolkata this year.
● White Label Access: Zomato also allows companies
such as Zomato Whitelabel to create a personalized
food delivery app to offer restaurants offers. It also
works with consulting companies for cloud kitchens
 and restaurants. Zomato partners with select
restaurant operators to help locate expansion sites at a
low fixed cost, but with greater product choices. It
gives those restaurant partners the necessary licenses
and operational enabling.
● Zomato Kitchens: To facilitate the selection of
restaurant operators to provide kitchen infrastructure
services, Zomato partners with entrepreneurs to
create and operate Zomato Kitchens under various
labels. With an investment of INR 35 Lakh and more
this helps entrepreneurs finance restaurants in the
right place. Zomato says that it offers investors returns
within the range of INR 2 Lakh to INR 4 Lakh per
month, with 180 + affiliate kitchens already in service.

As it has increased in size and scope, Zomato has attempted to

reduce dependency on cash-burn-reliant models and simplified
the entry into enabling and other revenue streams produced by
users. Zomato’s cash burn primarily involves keeping users
against her competitor Swiggy. However, Zomato could soon be
able to benefit from other parts of its business model, being in
the line of fire for extreme discounting practices.

FUNDING by INVESTORS:

1.2010–2013: raised by $16.7 million from Info Edge India.

● Zomato’s five rounds of fundraising.

● August 2010: $1mn.
● September 2011: $ 3mn
● September2012: $2.3mn
● February 2013: $10mn
● November 2013: $37mn
 2. November 2013: Raised by $37 million from Sequoia Capital
and Info Edge India.

3. September 2015: Raised by $60 million from Temasek and Vy

capital.

4. October 2018: Raised by $250 million from Alibaba.

5. later 2018: additional raised by $150 million from Ant Financial.

Marketing strategy:

● Festival market strategies

● Strong brand name
● Product Strategy
● Pricing strategy
● A telephone call and direct mail promotion
● Coupons and price offer
● Online delivery application

Challenges faced by Zomato:

● There is already a very strong competition on the

market, which has defined customer criteria to
succeed.
● Zomato brands stake its name if anything goes wrong
that ends customers are affected by.
● Zomato must feel totally in the regular food market,
operate with a very low 50/-ticket size without
minimum order delivery order necessary. The biggest
challenge is to keep up high margins because of costs
 associated with food production, processing, and
supply.
● The biggest challenge they had faced was to find a way
to cover all the cities to not miss a single, fine
restaurant and to have a variety of fine restaurants on
all menus.

The successive factor of Zomato:

● Strong advertising channel.

● Efficient personnel.
● The good rating system and social media.
● Experienced sources of funds.

Result:

Zomato becomes one of the successful food delivery apps in

India. In the financial year ended March 31, 2019, Zomato
reported a three-fold rise in sales of $206 million, while the
topline’s remarkable growth was attributed to a splash of money
for new customers than before.

“Zomato’s perfect” is a wonderful food order service online.

Indians love this application and they can order our food in a few
minutes. In their office door. Even they can pick their favorite
restaurants and include food in their cart and order. Even the
customers appreciate the Zomato food delivery apps start-up in
India.