Hello guys , today we will discuss how swiggy will give heavy discounts ?, How swiggy do business ?,And swiggy business model.

Swiggy was started in August 2014 and was founded by three friends named as Rahul Jaimini, Nandan Reddy, and Sriharsha Majety.

Unlike any other food service companies , swiggy have their delivery fleet, on other hand, zomoto outsources their delivery service and it is the most important reason for their fast success of swiggy.
Customers are the main target of swiggy business model.
Swiggy is a online food service and restaurants aggregater platform that allows customers to order their favourite dishes from favourite restaurants and get delivered to their doorsteps.

But.......

How swiggy make/earn money ?

Commission

This is primary revenue generating activity for swiggy. They charge commission from restaurants for every order and charge commission upto 15 -25%. The commission may varies with restaurants location, popularity and weather etc.

2. Swiggy access

Swiggy offers readymade kitchens to restaurants or in simple we say it is centralised kitchen for 4 to 5 restaurants at one place. It will meet up the demand of eaters in those area where supply is low and demand is high ,they charge high commission for it.

3. Advertisement

Swiggy charge restaurants to show their banner advertisement on the app. As it will have higher visibility on the app and higher chances of getting order.
They also charge restaurants for priority listing.An restaurants has to incur charges according to how high they want to display their restaurant in the top list of the app or website.

4. Swiggy super

It is a swiggy membership plan that offers unlimited free delivery , no surge fee during rains and high demand.This will generate significant amount to swiggy.

But then why ?

Swiggy was incurring losses in past years and how swiggy give heavy discounts to customer ?

How swiggy give heavy discounts ? And what is swiggy business model ?

"You will be thinking that swiggy has lots of funds that it burns/use to give heavy discounts in form of 30-40% coupon code."

But these is not wholly true. Yes, swiggy has funds which come from big Investor globally. But why the investor will invest in company which is making losses.

"Now you say because it is generating growth of users by giving discounts and afterwards it will stop giving discounts and earn profits."

From here the question arises that will you order food when it will stop giving discounts? No...

It means this is not the business plan to grow customers .

Then what ?

The business plan of swiggy be.....

Swiggy give 30-40% discounts on orders but how ?
It increases prices of food by 15-20% . And as mentioned above taking commission from restaurants upto 15-25% for increasing their order delivery.
As in restaurants business profits margin is approx. 50% , so restaurants happily give 20% commission .
They also give their delivery boys higher than other food servicers, so it will increases user experiences .
It means their is no cash burns/use for giving discounts of investors.
They uses this cash for their application maintenance , research expenses etc.

But the question arises why investors invest in swiggy ?

Because they have very large database of food dishes , food habits in different-different States. They provide consultancy services to new restaurants about which type of restaurants should be open at particular place, what is favourite dishes at particular place , what food price should be maintained for particular dish etc.for which they charge high fees.
As they have high database about dishes ,it means if will open restaurants of their own it will be successful in no time.

Conclusion

Swiggy is a online restaurant aggregater which let restaurants to mention their business online and increases their customers without creating their own website and spend money for domain , hosting etc.
After reading this post , what you think about swiggy business plan ?

Swiggy, on-demand delivery platform, launches a ‘Jumpstart Package’ for all its restaurant partners who are restarting business operations after covid -19.

Pepsi on Thursday announced a fund-raising initiative with the National Restaurant Association of India (NRAI) and Swiggy to provide 25 lakh meals to the workers of restaurant community who are in distress.