From 10K to 1.5L orders: Magicpin's recipe for food delivery disruption

In a fiercely competitive food delivery industry dominated by Swiggy and Zomato, Magicpin is charting its own course by positioning itself as the third-largest food delivery app in India. This is a rare move in an industry where brands often vie for the top spot. Yet, the hyperlocal discovery platform's approach has worked, boosting its growth from 10,000 daily orders in May 2023 to 1.5 lakh by September 2024 (on ONDC)—an impressive fifteen-fold increase in just 16 months.

Anshoo Sharma, co-founder and CEO of Magicpin, which launched its food delivery business in April 2023, told afaqs! that the company emphasises on the facts that resonate deeply with its customers, serving as a foundation for its growth.

"In just one year, we’ve captured 10% of the food delivery market share in key regions such as Delhi and Bengaluru,” he says.

With over two lakh merchants and 10 million active users, the hyperlocal retail discovery platform that connects users with local businesses, now operates in 12 major cities across India.

One of Magicpin’s most striking differentiators is its value-driven model. The platform allows users to earn rewards and cashbacks through purchases made at both local retailers and online platforms, enhancing their shopping experience while supporting local commerce.

“Our platform acts as a performance marketing tool for merchants, requiring them to pay only when they generate business through us. This model aligns well with the needs of value-conscious merchants who prioritise measurable returns on their investments,” explains Sharma.

The platform is the largest food delivery app on the Open Network for Digital Commerce (ONDC), fulfilling 90% of the network’s food orders.

(Trivia: ONDC is a Government of India (GoI)-backed technology infrastructure. It is a network-centric model, wherein buyers and sellers can transact irrespective of the platforms/applications they use as long as “platforms/applications are connected to this open network.”)

Prominent food brands now available on the platform include Burger King, Domino's, Taco Bell, McDonald's, Faasos, Subway, and Behrouz Biryani. In the fashion segment, the platform features brands such as US Polo Assn, Louis Philippe, Puma, Levi's, Van Heusen, and Lee Cooper, among others.

Competitive landscape

In the food delivery sector, Magicpin faces competition from two major players, Swiggy and Zomato, with the latter being an early investor in the company. In 2021, Magicpin raised $60 million in Series D funding, led by Zomato, to support its expansion plans.

Despite being backed by Zomato, Magicpin competes with its investor in the food delivery space. Sharma sees this as an opportunity rather than a challenge, emphasising the platform’s unique approach. “Zomato recognised the immense potential of the retail and offline market early on, which is why they invested in us,” he says. “Our focus is on making hyperlocal experiences economically viable for everyone.”

It helps the platform to maintain a competitive edge over its competition.

Sharma says that a McDonald’s burger is the same regardless of which platform delivers it, "but if our app offers it for Rs 50 less, it’s a simple choice to make for a customer". He asserts that over the past year, word-of-mouth driven by competitive pricing has played a pivotal role in rapidly expanding the user base.

The company positions itself as unrivalled in the Indian hyperlocal space. Globally, it identifies Meituan, a Chinese delivery platform, as a comparable player. However, in specific categories like fashion, it competes directly with established brands such as Myntra, Ajio, and Tata Cliq.
“Our combined positioning as a hyperlocal super app is unique. For merchants, we offer an incremental channel, and for customers, we provide multiple use cases in one app, making us a one-of-a-kind platform in the market," says Sharma.

In November 2024, during the festive season, Magicpin reduced its platform fees to Rs 5 per delivery, down from Rs 7, while competitors Swiggy and Zomato raised their platform charges to Rs 10. This move contributed to Magicpin recording 5 lakh orders over the festive weekend.

Marketing: Leveraging creativity and context

Magicpin places a strong emphasis on out-of-home (OOH) advertising, using topical campaigns to create buzz and connect with current events. A notable example was an OOH campaign referencing the BCCI's decision to not allow the Indian cricket team to travel to Pakistan for the Champions Trophy, with the tagline: "The Men in Blue will not deliver in Pakistan."

The platform also showcased its wit during Swiggy’s IPO announcement, launching an OOH campaign with the tagline: "Your IPO is nailing it, just like our food prices." These campaigns underline Magicpin’s ability to merge creativity with relevance, making its marketing memorable.
“Our approach is content-led. The medium—be it OOH, online, or radio—is secondary,” says Sharma, adding, “What sets us apart is that the content always takes centre stage.”

“OOH campaigns are central to our strategy as they represent the real world, aligning with our mission to connect people to offline experiences. Other physical mediums like print and radio complement this.”

In 2022, Magicpin collaborated with actor Vijay Raaz for a campaign that showcased the app's various features, further cementing its commitment to content-driven marketing.

Future plans

For the fiscal year ending March 2023, the Gurgaon-headquartered brand reported revenue of approximately Rs 315 crore, a significant increase from Rs 162 crore in FY22, according to Entrackr. The report also noted a 40% reduction in advertising expenses, which dropped to Rs 114 crore in FY23 from Rs 149 crore in FY22.

Magicpin has announced an investment of Rs 100 crore to onboard one lakh new restaurants and cloud kitchens on ONDC. In July 2024, the company expanded its network by adding 1,000 consumer brands and 75,000 local merchants.

While food delivery accounts for one-third of the platform's business, the remaining two-thirds are driven by users exploring local retail experiences. It is also expanding into high-ticket, low-frequency categories like furniture.

“By focusing on local offline retail, we address both existing and emerging merchant needs, connecting them with users in their neighbourhoods,” Sharma notes.

With a strong foothold in India’s hyperlocal ecosystem, Magicpin aims to continuously innovate and expand its offerings. The company’s focus is on establishing a strong presence across multiple neighbourhoods within the top 20 cities in India, says Sharma.