Here is the Business model of Swiggy as per my understanding of the Business.
Current Revenue Streams Of Swiggy:-
· Delivery fees from Customers
· Commisions from Restaurants Partners (Amazon Pay, City bank etc)
· Commisions from Restaurants
· Subscription based model like “SUPER”
· Ad revenue from Restaurants
For other details you can reference to the below attached Business canvas of Swiggy in my understanding
Value Proposition :- Swiggy at core is an online food delivery platform who delivers Food regardless of minimum order at fast speeds with instant chat support and live order tracking functionality available.
Cost Structure :- There are two major costs in operating swiggy, one is obviously managing tech of this size and other being People( Delivery Guys & operations )
Key Partners :-
· Restaurants
· Delivery Partners( Companies like Shadow Fax)
Profitability
Right now the profitability of company is not going to be much, since if the order rate is exponential, then again the people cost is also running high almost parallelly. So there is no increase in the profitability.Let’s take the current scenario of Swiggy
Let’s say Swiggy does 10000 orders in a day in 1 city.
And One rider does 25 Deliveries/Day( Assuming he works 8 hours and does 3 in 1 hr)
So Swiggy needs 10000 / 25 = 400 Riders
Now if Swiggy doubles up the order volume by burning in marketing then order volume will become 20000, and correspondingly 800 riders. Even if they optimise by using tech or Ai , they would still be needing 650-750 Riders.
The cost to manage more people will also go up, hence in this scenarios this shall be loss making model as there are no assets that are helping Swiggy make some money.
Future Revenue Streams :-Now the question is how will it make money ?
For that Swiggy already has multiple revenue streams and will plan to continue increase them bit by bit over time. For the revenue streams and income Channels, Swiggy can do the following things in future to make money
1. Become an end to end delivery company venturing into all kind of hyperlocal deliveries and not just a food delivery platform
2. Make Swiggy delivery guys into customers themselves by giving them insurances, bike AMC’s etc
3. Becoming an Advertsing platform for food businesses in this competitive space
4. Enriching the cash flows by infusing more Cash collecting models like SUPER / something Zomato Gold
5. Increasing the Channel of Sales from just and App only to Offline retail channels as well
6. Introducing Swiggy Kitchens where Swiggy itself becomes a behemoth with excellent delivery network
7. Outsourcing it’s logistics to other Giants like Amazon, Flipkart since it already has that bandwidth, just need to plug tech
At the end I would like to conclude that as this platform matures, there will be no / very few discounting games that they do. Right now even with SUPER people have started to acknowledge that there are no free food deliveries anymore, they are only free if you go SUPER. I don’t believe they will go down easily as some people proclaim.