What Daily tells us about Swiggy’s appetite
I recently tweeted saying that Swiggy has one of the most interesting product cultures in India right now.
The breadth of offerings around food delivery (POP, Super, etc.) that they are building is mind-blowing. But, food delivery only scratches the surface of Swiggy’s true appetite. It’s the Indian startup ecosystem’s open secret that the company is all set to devour a multi-course meal in the logistics cuisine. Swiggy is as much a food delivery company as Google is a search company.
What data is to Google, is what logistics is to Swiggy.
What’s Daily and why is it a big deal?
Daily is a subscription service Swiggy launched last week. The value proposition is simple. You subscribe to a plan, and healthy, home-cooked meals are delivered wherever you want them, everyday.
Swiggy is already the leader in food delivery (I use Zomato primarily for discovery and I assume that’d be the common usage pattern as well). The service’s prime target group is folks in Tier-I cities between the age of 20 and 30 who have fairly significant disposable income. I would assume that ~60% of their orders come from this bucket. Now, this is a heterogenous mix of people ranging from bachelors earning 20,000 per month living in PGs to high-earning couples with low to mid six-figure monthly incomes.
Daily is a product primed for this audience.
There are two distinct personas that Daily targets — bachelors/bachelorettes living in PGs or shared accommodations and busy, young couples with no time (and more importantly, no kids).
The low-income cluster typically lives on poor quality PG breakfasts, office cafeteria lunches, or dinners at nearby QSRs. It’d be safe to say that these folks spend somewhere between INR 120 and 150 on meals everyday. The higher-income cluster probably has cooks that prepare their breakfast/dinner and have their lunches in (better) office cafeterias. Assuming that a cook for 1 costs approximately INR 2,000 per month and a good cafeteria lunch costs INR 120, this bucket is spending INR 200–250 per day on food.
Currently, this audience is most likely to order on Swiggy for dinner on weekdays and lunch and dinner on weekends. With Swiggy Daily, their daily costs don’t get affected much, but they stand to get much better meals with more variety and higher hygiene standards.
Assume that the average Joe currently orders on Swiggy twice a week (during weekdays) with an average order value of INR 150 per person. That’s a gross order value of INR 300 per week. With Daily, the average order value would likely come down to INR 80, but the frequency shoots up to 5 times or 10 times a week (a 2.5x to 5x increase) — so, the gross becomes anywhere between INR 400 to 800 per week per customer (a remarkable 33% to 266% increase).
But that’s not enough to fill Swiggy’s voracious appetite. Most companies would kill and be content to earn around 400–800 rupees per week per customer. But then, most companies aren’t Swiggy.
What’s in a name?
To me, the most interesting part about Daily is the name.
As my friend Manas puts it in this excellent blog post, Swiggy wants to occupy a much bigger part of your life by becoming Dunzo. This is evident in their acquisition of Supr Daily — a service that delivers milk and other essentials … *drumroll* daily.
Think of Swiggy as a delivery layer on top of which they did food so far. Now imagine a world where Swiggy delivers your milk, groceries, pet food, alcohol, medicines, and maybe… your self! Everyday. That’s what Daily is. Daily is not just about your daily meals being taken care of. To assume so, would be thinking small. It’s the first in a series of steps that the company will take to penetrate your daily life.
If I were to be wild, I’d go one step further from Manas’ hypothesis and argue that Swiggy is likely to become a daily services fulfilment company. A super-app wherein your maid, car cleaner, or gardener can also be subscribed to as services on Swiggy.
Imagine a morning where you’re subscribed to Swiggy’s milk delivery service, you brew your coffee using the Nescafe you ordered on Swiggy, you munch a healthy breakfast ordered on Swiggy Daily, a Swiggy maid washes your dishes, and once you’re ready, a Swiggy Chauffeur drops you at work. This is what I believe their future could be.
For some of us, food maybe life, but Swiggy understands that life offers many more channels for it to tap into. Swiggy doesn’t want to be a food delivery company. It wants to be a food and delivery company.
Can it have its cake and eat it too? Well, given how well they are executing, I certainly think so.
Disclaimer: All of the above are my opinions based on what I see publicly and my own interpretations of things— I have no specific knowledge on how Swiggy thinks, nor is this meant to be advice on what they should do. They have people far more qualified than I am, to drive their product strategy. :)
