Lockdown diaries:
Day 1: Got an extra weekend to relax and chill. Yayay!
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Day 15 : It’ll be over super soon. We are gonna get back and meet our friends.
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Day xyz: Someone please expunge 2020 memories. My poor mind can’t deal with it. I miss my friends, birthday parties, sorted summer parties and much more :(
Yes, ever since stringent social distancing norms were put upon us, we all are missing hanging out with our friends. Everyone desires to relive those days. With all the buzz around Unlock 1.0, let me get you acquainted with not-so-pleasing reality, that dining isn’t gonna be the same.
Amidst all the gloom, Swiggy Sunday Potluck seems a viable solution to your long long desire of celebrating with your ami.
Obsess over your foodies
Throw a party this sunday and get flipkart coupons worth Rs. 5000 :)
Sounds cool? Yes it is.
Celebrate with your friends by swapping dishes via Genie and celebrating the moment. Post the moment as your instagram story, and if you are among the 10 lucky winners, you’ll win flipkart vouchers worth Rs. 5000. An excellent move in terms of ameliorating user engagement.
Swiggy wants to make a hold on the delivery ecosystem ever since COVID took a hit on the revenue. Food delivery represented about 70% of their revenue and currently they are working with only half of the partners, who managed to carry out operations. Supply has been limited to 25–40% compared with pre-covid levels, with operational partners being concentrated in tier-1 cities. Layoffs being the witness of the struggle of the startup.
All these paved the ground for the shift to delivery ecosystem and connecting more and more foodies worked as a promotional strategy for them. Hence Swiggy Sunday Potluck is just a marketing gimmick intended to engage the dormant chunk of its users.
But what about the costs?
Swiggy had been delivering the medicines, groceries and home cooked meals even before the lockdown. So yes, Swiggy had plans to venture out completely into hyperlocal delivery and COVID was just a cake to lay icing on.
But Swiggy incurred a net loss of ₹2,367 crore in FY19, which was a six-fold increase from ₹385 crore losses posted in FY18. The orders also increased to 1.4 million daily across India, compared with about 700,000 orders per day in 2018.
But simple maths can tell you that the cost of doubling the orders doesn’t hint at a sustainable model.
And venturing out completely in hyperlocal delivery is just going to make them burn more cash per every order, making me doubt whether Swiggy has ambitions to pursue even after the lockdown gets over.
But Dunzo has been doing the same, then what’s the problem?
The problem is that hyperlocal delivery hasn’t been profitable ever since it was started because startups like Swiggy, Dunzo have been creating a demand for something that’s not quintessential. They have been bleeding heavily to get the customer on board and develop a new habit. And you guessed it right, they have been successful in doing so. Albeit, at the cost of fancy coupons and offers.
And the outcomes aren’t so rosy either. Even Dunzo incurred a net loss of around ₹168.9 cr in FY19 which was an eight-fold increase from the reported loss in FY18. So as evident from the stats, Dunzo hasn’t been doing a great job either except for the habit building and user base growth.
Swiggy’s got us friends :P
It’s the food that makes us love Swiggy. And what would be better if Swiggy hits the goal of habituating us to virtual celebrations. With tech giants like Google, Shopify and Twitter already embracing the new era of Work From Home, this might be a common trend in the coming year.
Success of Houseparty and Netflix Party extension already validate the efficacy of virtual socializing. Personal connection is something that people are looking for. Be it watching movies or partying, unique epiphany matters during these super boring quarantine times and Swiggy knows it.
Your friends can send you the dishes by placing the orders from their city restaurant and you can have a party!
Party being the keyword here. You could do it even before Potluck was rolled out, but it’s all about the habit development which is directly proportional to the frequency.
On a concluding note, I would like to know your views on whether Swiggy would go all way round to compete with Dunzo one on one.
Will be waiting for your comments :)
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