On-demand convenience platform Swiggy’s food delivery business has turned profitable, making it one of the very few global players in the sector to achieve such a feat in less than nine years since inception, company CEO and Co-founder Sriharsha Majety said on Thursday.
Bullish on India’s journey of eating out and food delivery, Majety, in a blogpost, said, Swiggy is “very sanguine about the growth potential over the next two decades” and would continue to drive further growth in food delivery.
“Our sharp focus on innovation, coupled with strong execution has led to yet another milestone. As of March 2023, Swiggy’s food delivery business has turned profitable (after factoring in all corporate costs; excluding employee stock option costs),” he wrote.
Further, Majety said, “This is a milestone for food delivery globally, not just for us, as Swiggy has become one of the very few global food delivery platforms to achieve profitability in less than nine years since its inception.” The company expects to reach more such milestones in the coming quarters, he added.
He applauded all the partners of the company in helping it achieve the milestone, adding that Swiggy has a strong relationship with its customers with “industry-best NPS (net promoter scores), repeat and retention rates.” “We continue to make strides in gaining customer favour, including strong traction in Tier 2 and 3 markets. Our teams are more in sync than ever with restaurant partners to improve their experience with Swiggy and create mutual wins. As a result, our restaurant NPS has improved by over 100 percent in the past eight quarters,” Majety said.
The company CEO noted that when Swiggy started off in 2014, with food delivery its first foray and core offering, on-demand food delivery experience was new and broken and many viewed it as an unviable business model.
On the road ahead, he said, “We strongly believe it is still very early days in India’s journey of eating out and food delivery, and are very sanguine about the growth potential over the next two decades. We will continue to make responsible and measured interventions to fuel further growth in food delivery.” There are many underserved geographic and consumer segments, he pointed out, adding, “our goal remains to outpace industry growth by continuously investing in the right levers”.
While the investments in food delivery are starting to pay off successfully, Majety said, Swiggy is “also very excited about the trajectory of our quick commerce business, Instamart”.
After building the category from the grounds up, and making “disproportionate investments in Instamart given the attractiveness of the consumer proposition and its strategic importance to us”, he said, “The peak of our investments is behind us and today, Instamart is one of the leading players in the quick commerce space globally.” In addition, he said, “We’ve also made strong progress on the profitability of the business and we’re on track to hit contribution neutrality for this 3-year-old business in the next few weeks.” On Dineout, which Swiggy acquired last year that enabled it to cater to consumers for every food occasion — either delivery or dining out, he said, “Today, Dineout is fully integrated within Swiggy and is the leader in the dining out category with more than 21,000 restaurant partners across 34 cities.” Majety’s blogpost comes two days after US-based asset management firm Baron Capital Group reduced its valuation of Swiggy by 34 percent to $7.1 billion (roughly Rs. 58,624 crore) as of December 2022.