Swiggy, a prominent player in the food delivery industry, has experienced no negative consequences following its recent choice to implement a platform fee for its users. The company remains confident that the demand for food delivery and dining services has not waned, despite prevailing macroeconomic conditions.
Rohit Kapoor, CEO of Swiggy’s food business, said, “The platform fee is a standard feature across consumer tech categories like ticket booking etc., and we have not seen any impact of it.”
In April, the food delivery platform introduced a ‘platform fee’ of INR 2 per order for all users, regardless of the value of their cart.
In March, Swiggy revealed that its food delivery segment achieved profitability by March 2023, factoring in all corporate expenses except for employee stock option costs. The company’s executive emphasized their command over the profit and loss statement and their ability to judiciously allocate investments to strategically viable areas.
Swiggy is betting heavily on AI, having established a dedicated team to spearhead its AI strategy. This strategic move has already resulted in the integration of AI across several key aspects of their platform. For instance, AI is being used to provide personalized restaurant recommendations to users and to assist them in making cuisine choices. Furthermore, Swiggy has implemented AI in enhancing customer service interactions and touchpoints.
Notably, Swiggy’s acquisition of DineOut last year has paved the way for them to experiment with restaurant reservations directly through the Swiggy app in specific markets. This trial phase is a precursor to a wider rollout. Beyond this, the company is actively engaged in enhancing the app’s user experience by introducing additional layers of social engagement, as highlighted by Kapoor. This comprehensive approach underscores Swiggy’s commitment to leveraging AI and innovation to enrich their service offerings.
Between June 2022 and 2023, the entire food marketplace has observed a year-on-year growth ranging from 15 percent to 30 percent. During this period, Swiggy expanded its presence to encompass nearly 600 cities and towns. Despite the food tech market being primarily controlled by two key players, Swiggy remains unperturbed by the emergence of newcomers such as the ONDC (Open Network for Digital Commerce).
“We don’t see it [the food delivery market] as a duopoly…Our job is to show up and do our best,” says Kapoor. “Today, a Swiggy One user spends 4x more on the app; renewals too are strong,” he adds.