Swiggy Blames ‘Weekend Peak Hours’ for Late Deliveries

“As it is a weekend peak hour, the restaurant is facing heavy demand,” Customer service from Swiggy responded in writing concerning a delivery delay. The consumer vented his displeasure on social media when customer care claimed that it was the "weekend" busy hour. Ironically, the chat took place on a Tuesday at approximately 5 p.m.

The two leading firms in the fiercely competitive Indian online meal delivery market are Zomato and Swiggy. In 2014, Rahul Jaimini, Nandan Reddy, and Sriharsha Majety established Swiggy. Swiggy made Rs 5,704.9 crores in FY22, but during that same time, it lost three times as much money as Zomato, one of its main rivals. Zomato reported earnings of Rs 1,220.3 crore, whereas Swiggy lost Rs 3,628.9 crore.

Is there a need for renovating, remaking, or rebuilding the image?

Swiggy's aggressive acquisition strategy and sales records have had an impact on the company's performance in the unlisted share market. However, the main point that needs to be addressed is how this would benefit average investors. With a large user base of twenty million, Swiggy stated in its most recent financial report for FY23 that its cost-effective tactics allowed its meal delivery service to become profitable. The price of a Swiggy share rose from Rs 287 to Rs 360 as a direct result of this announcement. The business is still researching ways to boost sales, though.

How can Swiggy restore their customer’s faith?

Currently, reducing its operational expenses is the biggest change Swiggy can make going forward. The corporation recently disclosed that it intends to sell its cloud kitchen division to pay for this. This choice was made to reduce costs as quickly as feasible. Cloud kitchens require substantial investment in infrastructure, equipment, and staffing to operate efficiently.

However, the returns on these investments may take time to materialize, especially with increasing competition and evolving market dynamics in the food delivery industry. By divesting its cloud kitchen division, Swiggy aims to offload these high operational expenses and streamline its business model. This not only frees up capital tied to the cloud kitchen operations but also reduces ongoing expenses associated with maintenance, logistics, and workforce management.

The Swiggy Share price reflects the confidence that investors have placed in the company's growth strategy. With its ongoing acquisitions, Swiggy will undoubtedly strengthen its position in the fiercely competitive meal delivery industry. They have made active investments in several businesses throughout the years. One noteworthy investment was in Rapido, when on April 15, 2022, they raised $180 million in Series D capital by leading the investment round.

How is India’s food delivery industry?

The broad variety of cuisines offered and the rising need for convenience are driving the rapid expansion of the online meal delivery market in India. In 2024, the online food delivery business in India is expected to generate US$43.78 billion in sales. A 16.14% annual growth rate (CAGR 2024–2029) is anticipated. Swiggy has quickly become India's quickest food delivery service, meeting the needs of millions of people all around the country.

In terms of growth and acquisitions, the business has acquired six different companies. On July 13, 2023, they made their most recent acquisition of LYNK Logistics. They have also acquired 48East, Dine Out, Kint.io, Supr Daily, and Scootsy. Swiggy has demonstrated an increased willingness to purchase businesses in a variety of transaction formats; LYNK Logistics is perhaps an effort to increase its logistics capabilities.

Is Swiggy Investable?

It will be interesting to see what strategies Swiggy incorporates to reduce the losses. Swiggy is working on lowering the expenses, which is a wise move in the slow growth year of 2023. The company is also preparing for its IPO, which is the perfect time to buy Swiggy unlisted shares when the stock prices are low. As the company approaches IPO, swiggy share price is expected to increase and bring large returns for its shareholders. You can purchase unlisted swiggy shares through Stockify.