HOW DOES SWIGGY MAKE MONEY?
SWIGGY IS A BRAND WHICH NEEDS NO INTRODUCTION, FOUNDED IN 2014, SWIGGY IS BASED OUT OF BANGALORE, INDIA. TODAY, IT HAS BECOME A COMMON HOUSEHOLD NAME FOR ANYONE WHO WANTS TO ORDER FOOD ONLINE.
THEY HAVE CREATED OVER 2,18,000 JOBS AND GENERATED AN ANNUAL REVENUE OF AROUND RS. 875 CRORES IN NOV 2019.AS OF MARCH 2019, THEY HAVE SERVED FOOD IN AROUND 300+ CITIES ACROSS INDIA.
WELL, THAT WAS ABOUT THE NUMBERS THEY HAVE ACHIEVED SO FAR, BUT THE ELEPHANT IN THE ROOM HAS STILL NOT BEEN ADDRESSED i..e
‘HOW ARE THEY ACTUALLY MAKING MONEY?’
COMMISSION
A MAJOR PORTION OF SWIGGY’S REVENUE COMES FROM COMMISSIONS, WHICH THEY CHARGE FROM THEIR PARTNERED RESTAURANTS. THEY TYPICALLY CHARGE 15% – 25% COMMISSION ON THE ORDER BILL AMOUNT RECEIVED BY THE RESTAURANT. THIS COMMISSION IS CHARGED ON THE FULL BILL AMOUNT (GST INCLUDED).
THE PERCENTAGE OF THE COMMISSION DEPENDS ON VARIOUS FACTORS LIKE THE NUMBER OF ORDERS, LOCATION OF THE RESTURANT, THE COMMISSION CHARGED BY COMPETITORS, ETC.
ADVERTISEMENTS
SWIGGY EARNS REVENUE THROUGH ADVERTISEMENTS IN 2 WAYS:
1. 1) BANNER PROMOTIONS
2. 2) FEATURED LIST
SWIGGY PROMOTES RESTAURANTS BY SHOWING THEIR BANNER TO THE CUSTOMERS ACCORDING TO THEIR RESPECTIVE LOCATION. THEY ALSO FEATURE THE RESTAURANTS IN THEIR SPECIAL ‘FEATURED LIST’ AS A MEASURE TO BOOST THEIR VISIBILITY AND INCREASE THEIR ORDERS. HIGHER UP THE LIST THE RESTAURANT IS DISPLAYED, HIGHER IS THE COST THE RESTAURANT HAS TO PAY.
DELIVERY CHARGES
THIS IS ANOTHER WAY THROUGH WHICH SWIGGY MAKES MONEY. SWIGGY CHARGES A NOMINAL DELIVERY FE OF RS.20 TO 40 FROM ITS CUSTOMERS ON ORDERS BELOW A THRESHOLD VALUE OF RS. 250
SWIGGY RAISES THE CHARGES DURING HIGH ORDER DEMANDS, UNUSUAL WEATHER CONDITIONS, SPECIAL OCCASIONS AND MIDNIGHT DELIVERY IN SELECTED MARKETS.
THIS ACTS AS A BUSINESS STRATEGY, AS CUSTOMERS TEND TO ORDER MORE THAN THE THRESHOLD AMOUNT IN ORDER TO AVOID DELIVERY CHARGE.
AFFILIATE INCOME
BESIDES THE CORE BUSINESS PRACTICES, SWIGGY ALSO MALES MONEY IN THE FORM OF AFFILIATE INCOME BY REFERRING CREDIT CARDS TO ITS CUSTOMERS. IT HAS PARTNERED WITH TOP FINANCIAL INSTITUTIONS AND BANKS, INCLUDING AMERICAN EXPRESS, CITIBANK, ICICI BANK, HSBC, ETC.
IT ALSO ALLOWS CUSTOMERS TO RECEIVE SEVERAL CREDIT CARDS OFFERS FROM THESE FINANCIAL COMPANIES.
SWIGGY ACCESS
SWIGGY ACCESS IS ANOTHER VARIABLE OF SWIGGY’S REVENUE FUNNEL.
IT IS A CLOUD KITCHEN MODEL WHICH PROVIDES READY TO USE KITCHEN SPACES TO ITS RESTAURANT PARTNERS IN THOSE AREAS WHERE THEY DON’T CURRENTLY OPERATE IN.
MULTIPLE RESTAURANTS OPERATE IN THESE KITCHENS. RESTAURANTS ON SWIGGY ACCESS HAVE TO PAY HIGHER COMMISSIONS THAT THE EXISTING AVERAGE COMMISSIONS THAT THE PLATFORM CHARGES FOR DELIVERY ONLY.
SWIGGY SUPER
SWIGGY SUPER IS ANOTHER CUSTOMER GENERATED REVENUE MODEL OF THE COMPANY.
IT IS A MEMBERSHIP PROGRAM FOR CUSTOMERS WHICH OFFERS UNLIMITED FREE DELIVERY ON ALL ORDERS ABOVE RS.99(NOW RS.149) AND NO SURGE IN PRICING FOR WHICH THE CUSTOMER HAS TO PAY A FIXED AMOUNT.
THE MEMBERSHIP HAS TWO PLANS:
ONE- MONTH @RS. 149
THREE – MONTH @RS.349
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