Technical

How does Swiggy Make Money

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How does Swiggy manage to gain such kind of revenue with profitability? Let's go deeper into the operational revenue channels that define its success.

Swiggy makes money through various channels. From delivery charges and commissions to subscriptions and advertisements, it also earns a hefty amount of money through offering its services like Swiggy Instamart, Swiggy Genie, and, of course, Swiggy Super. Let's go through each of them:

Delivery Charges:

Swiggy has no limitations on ordering amounts, as it delivers the order worth Rs100. It charges Rs 20-Rs 40 for every order less than Rs 250 from its customers. These delivery charges may vary depending on the situation like extreme weather conditions and strong demand.

Commissions:

Swiggy earns 15-20% (including GST) commissions on every order from its partner restaurants. However, due to the emergence of ONDC, online food delivery platforms like Swiggy and Zomato are forced to reduce their commission rates.

Platform fees:

In April 2023, Swiggy started charging Rs 2 for every food delivery order in cities like Bengaluru, Chennai, and Hyderabad. Its current platform fee is Rs 3 after a discount of Rs 2. As per some sources, the food tech major showcased a platform fee of Rs 10 to select users.

The company is on the way to generating revenue along with profitability through implementing platform fees.

Advertisements:

This food tech platform accumulates money from running restaurant ads in its app, which often functions in three parts:

Banner Promotions:

Restaurants can run ads related to specific regions that appear at the top, bottom, or sides of the Swiggy app. The food tech platform charges a handsome amount for this service.

It proves to be a win-win situation for customers, restaurants, and for the company itself.

Sponsored listings or priority listings:

Restaurants can appear at the top of search results that users search for. Restaurants and other businesses have to pay some extra fees for appearing at the top of the Swiggy app.

Video Ads:

Restaurants and other businesses can opt into short video ads that play when users open the Swiggy app.

However, it's hard to mention SwIggy's exact earnings from the advertisement as it doesn't publicly disclose its advertising rates.

Membership Programs:

The hyperlocal food delivery company offers various membership programs for its customer's convenience. "Swiggy Super," "Swiggy One," and "Swiggy One Lite" are membership programs of the company.

Here is a brief description of these membership programs:

Swiggy Super:

It is the company's first membership program, launched in 2018 to gain more visibility and customers. During the coronavirus, this subscription model shut down for some reason. However, after a while, it returned with more lucrative features to serve customer needs and demands. Customers can leverage two subscription plans: one month and three months.

The monthly plan costs around Rs 99 and Rs 149, while the three-month plans cost Rs 249 and Rs 349. These rates can vary in different cities, but overall, Swiggy earns a satisfying amount of money through this membership program.

Swiggy One:

Swiggy One launched back then in November 2021. All the existing "Super" members had automatically enrolled for it for free. It provides benefits like unlimited free deliveries on food orders above a certain value, exclusive discounts on restaurants, and access to other services like Instamart (grocery delivery) and Genie (pickup and drop service). Its three-month plan costs you around Rs 400/month and One year plan costs around Rs 250/month.

Swiggy One Lite:

It is an affordable version of Swiggy One, launched in October 2023. It is a more affordable option offering a limited number of free deliveries on food and Instamart orders, along with discounts on select restaurants and Genie services. Its launch price is just Rs 99 for three months. It has a three-month membership that inculcates food orders and Instamart orders as well. The free 10 deliveries on food orders are applicable for above Rs 149. Instamart orders above Rs 199 are applicable for 10 free deliveries.

In addition to free deliveries, members enjoy up to 30% extra discounts at over 20,000 restaurants, in addition to normal deals. One Lite member received a 10% discount on Swiggy Genie orders above Rs 60.

These three membership programs contribute to the overall revenue of Swiggy.

Quick Commerce Business:

Swiggy also has its quick commerce business that is currently operational in 28 cities, named Swiggy Instamart, which launched in August 2020. With its superior technology and dedicated delivery fleet, it has become India's leading quick commerce grocery service.

As per some sources, Swiggy Instamart is responsible for the company's revenue of INR 4,735 Cr in H1FY24, along with the food delivery vertical.

Hyperlocal Courier Services:

Swiggy launched its hyperlocal courier services in September 2019, named Swiggy Go. However, after a while, in April 2020, it was rebranded as Swiggy Genie. It allows customers to avail instant pickup/dropoff service in a very secure and convenient manner.

It charges around Rs 60 for every distance up to 2 km, Rs 15/km from 2 km to 7 km, and Rs 25/km for every extra kilometer.

Affiliate Income:

Swiggy had a partnership with institutions that provide financial services like credit cards. Its partnered institutions include HSBC, ICICI Bank, American Express, Citibank, etc.

The company receives a commission anytime a user successfully applies for a financial product after being suggested by an in-app advertisement.

Restaurant Booking:

After the acquisition of Dine Out from Times Internet in May 2022, India's leading online food delivery platform started Swiggy Dine Out. It offers restaurant reservations, fine dining, lounge bars, pubs, cafes, and many other services. It contributed Rs 77.5 Cr in revenue during FY23.

Swiggy One member leveraged special benefits from dining out services along with Instamart and Genie. This integration enables Swiggy users to choose from thousands of dining-out options and enjoy discounts at over 18,000+ restaurants across 24 cities.

With its Great Indian Restaurant Festival (GIRF) and campaigns like "Sharma Ji Ki Beti," Swiggy Dineout is trying to deliver more customer-friendly discounts in 34 cities and aims to build connections with customers and establish a dining-out culture.

As of writing, most of Swiggy's revenue is generated through those points mentioned above.

To Sum Up:

Swiggy has succeeded in developing various revenue channels in a very short period. Building a global company is not everyone's cup of tea, especially when the market is already overcrowded with other companies like Zomato. Now, Swiggy is well-prepared for a public listing shortly by executing profitability.

Have you ordered from Swiggy? If not, go check out the app or website and enjoy your favorite meal with your loved ones.

Anyway, this is all about this article. Kindly tell us about any missing points or mistakes for future improvements.

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