Swiggy, a popular food and grocery delivery company based in India, has been taking measures to cut costs and streamline its operations. One such measure involved the recent sale of its cloud kitchen business, Swiggy Access, to Kitchens@, a brand owned by Loyal Hospitality.
Swiggy Access provided kitchen spaces to restaurants both online and offline, allowing them to expand their reach and ensure faster delivery to customers. This acquisition has resulted in Swiggy becoming a stakeholder in Kitchens@.
According to Kitchens@, the combined gross merchandise value (GMV) of the two companies is expected to be around $65 million, with plans to increase it to $100 million within the next six months. This acquisition is part of Swiggy’s wider cost-cutting measures due to slow growth in its food delivery business and a funding crunch caused by macroeconomic factors.
Junaiz Kizhakkayil, CEO of Kitchens@. Said “The addition of Swiggy’s Access kitchens will bolster the reach and operations of Kitchens@’s in four cities across 52 locations and 700+ kitchens, providing customers with more convenient and efficient food delivery options.”
Rahul Bothra, Chief Financial Officer of Swiggy, said “Swiggy Access was started with the aim to bridge hyperlocal gaps in restaurant supply and solve for variety, quality, and convenience of food. Since its inception, Access has enabled several restaurant partners to innovate and expand their reach to new customers in a cost-effective manner.” and added “We are confident that Kitchens@ is fully equipped to nurture this ecosystem by innovating and building more supply. Swiggy continues to believe in the potential of this space and remains invested as a stakeholder in Kitchens@.”
As part of its cost-cutting efforts, Swiggy recently tightened its password-sharing policy for Swiggy One users, a loyalty program that offers free deliveries and other benefits to its customers. This change limits multiple logins to two devices, helping to prevent users from sharing their login credentials with others.
Swiggy has also recently launched several new units to expand its offerings. Handpicked is a premium grocery delivery service, Minis is a direct-to-commerce ecommerce marketplace, and DineOut is a restaurant table reservation service. These new units demonstrate Swiggy’s commitment to innovation and expanding its business beyond just food delivery.
Swiggy’s recent actions highlight the challenges faced by food delivery companies in a competitive market. While the company is taking measures to streamline its operations and cut costs, it is also actively seeking new opportunities to grow and diversify its offerings.
