“There have been many first-time users in new categories like groceries, alcohol, Genie”: Srivats TS, Swiggy

Swiggy announced that its food delivery business has recovered to around 80-85 per cent of its pre-COVID order value. The platform resumed operations in 500 cities.

Over the last several months of the COVID-induced lockdown, Swiggy has transformed from being just a food ordering and delivery platform to an ‘on-demand delivery platform’. Apart from its core food tech, it has expanded into other categories like local deliveries with Swiggy Genie (like Dunzo), healthy food ordering with Health Hub and alcohol delivery, while also bumping up its grocery delivery services.

The platform is active in all the 500 cities it is operational in, and is galloping towards a full recovery. The brand announced that its food delivery business has recovered to around 80-85 per cent of its pre-COVID order value. The average order value has seen a 30-40 per cent growth over pre-COVID levels due to bulk (home) ordering. Over 200 cities have reached 90 per cent of their pre-COVID GMV (gross merchandise value) levels, with 70-plus cities seeing a full recovery to their pre-COVID levels.

Swiggy is primarily a platform, like a marketplace, where customers discover choices and make a purchase. The platform facilitates the discovery, transaction and logistics; and, in turn, charges for it. That way, while Swiggy can generate a great deal of demand, it doesn’t exercise an equal amount of control over supply.

As the country went into lockdown, it forced restaurants (Swiggy’s largest source of business) to down shutters, and completely plugged the business of 'outdoor food'. The early (lockdown) days saw the number of restaurants on the platform drop to 30-35 per cent.

However, since ‘Unlock 1.0’, around 70 per cent of Swiggy’s partners are back. With over one lakh restaurants on the platform, Swiggy is adding around 7,000 new restaurants every month (3,000 more than pre-COVID onboarding). With restaurants resuming operations and improving on-ground activity, order volumes in over 70 cities are back to normal.

The COVID crisis shifted the focus to essential products like packed food, household requirements and groceries, breathing new life into the platform’s ‘grocery’ arm ‘Swiggy Stores’, which lists products from local shops. Swiggy is currently testing InstaMart, a 45-minute delivery service for groceries and daily essentials, a solution to the key consumer pain point of delayed deliveries from rivals like Grofers and BigBasket.

This was accompanied by further bolstering its on-demand pick-up and delivery service ‘Genie’, a re-branded version of ‘Swiggy Go’ launched last September. Genie is currently present in 65 cities and more than 50,000 customers use it every month to send items like food, etc., to their friends and families.

Now, all of this was happening while there were strict limitations on ground operations and business, especially because of the varying degrees of the lockdown across regions and aspects like ‘red containment zones’, etc. This would pose a serious challenge, as the company had a few lakh on-ground delivery personnel.

“It was almost a life or death situation. We began operating as an essential service, and worked things out really quickly with government partners, delivery partners, restaurant partners, etc. Many people turned to Swiggy to get food – particularly in the first few weeks (of the lockdown). We worked on multiple fronts – auditing restaurants, safety protocols, no-contact deliveries, training delivery partners, providing hygiene gear, etc.,” says Srivats TS, Swiggy’s VP – marketing.

Srivats says that as customers took to both food and essentials delivery as a lifeline, a large amount of work went into swiftly working with local authorities, ensuring safe passage for delivery partners, procuring passes, along with building new features and products. “It was a lot of operational work that had to be done in a responsible way. This was the first two months of the lockdown.”

The following months (May-June) were about stabilising operations and scaling up, in light of the ‘new normal’. Apart from efficiency of delivery and restaurant partners, it was also about building new offerings like delivering alcohol, books, and 5-star meals in partnership with luxury hotels.

“It was more about carrying on a lot of the work done during the initial days of the lockdown. Business operations started returning to normal, but in a very COVID-centric way. That’s when we saw the efforts translate into strong consumer sentiments. Consumers turn to brands that they trust in times of a crisis.”

While the strength of Swiggy’s user base is under wraps, Srivats says that the number has grown rapidly in the last few months. Many customers have used the platform for the very first time as it became a need (from a want). Orders swelled in size and inclined towards homes from the previous trend of office ordering. Swiggy has seen a growth of 30-40 per cent in average order value now, as compared to pre-COVID levels.

“There are a lot more at-home orders now, and what used to be mostly meal-for-one, is now for multiple people. Again, a lot of the dormant users, who didn’t use the category frequently, became active. People who had kitchens themselves, but did not have a cook, had to fend for themselves. At home occasions, saving effort, indulging, inability to go out, many such use cases came up for the very first time during lockdown,” Srivats reveals.

A healthy share of the recovery was based on demand in smaller towns. A key lockdown trend was reverse migration from metro cities like Bengaluru, Delhi and Mumbai to smaller towns. This resulted in redistribution of customers. Apart from metros, cities like Kochi, Lucknow, Vizag, Guwahati and Mysore have exceeded their pre-COVID numbers.

Apart from food, Srivats says, there has been a lot of first-time users in the new categories like groceries, alcohol and Genie. “We have seen a very strong repeat usage in these new categories. There has been a lot of existing users of the Swiggy brand, who turned into cross-category users.”

A major addition to Swiggy’s services was the introduction of home delivery of alcohol (in May). Swiggy currently facilitates alcohol delivery in 24 cities (in Jharkhand, Odisha and West Bengal). A major task for the brand has been to navigate local regulations and to apply robust customer verification processes. Enabling online delivery of alcohol has not just helped retailers, but also made women comfortable to order alcohol online.

“We worked very hard with the government and the local authorities to put things into order. We have been adding new retailers every week. A lot of our partners have expressed interest in coming on board. In general, it has surpassed our expectations.”

Speaking on the recovery of restaurants, Srivats says that restaurants which implemented safety measures and advertised this both during and before the COVID months, have managed to salvage a decent amount of business. For example, Domino’s Pizza. Also, restaurants with a focus on dining in will take longer to recover.

With the food and essentials delivery segment continuing to register an upward trend, Swiggy expects consistent growth in order volumes during the ongoing cricketing (IPL) and upcoming festive season (Diwali). The brand even launched cricket-themed TVCs for the IPL season.

As a brand, Swiggy has been heavy on advertising across mediums. The core messaging has been around offers/discounts and convenience. The ads for long have been targeted across age groups. With the change in consumer sentiments, the messaging had to change too.

“Assuring consumers (about hygiene and precautions) was the single biggest thing that we focused on over the last eight months. It had to be effective and efficient. It was essentially about making sure that all the safety initiatives that we were taking as a company and as a brand, were communicated in a believable and understandable way to consumers,” Srivats says.

A major share of the conversation with Swiggy’s advertising partners and in-house teams is about building trust and confidence with consumers. “The consumer mindset and behaviour has shifted. So, how do you tap into what are the new mindsets, new behaviours, attitudes, beliefs from a consumer’s perspective? How are we, as marketers, agency partners and creative teams, tapping into these insights? By either developing things from a product perspective or (developing) communication campaigns,” mentions Srivats.

The brand maintained conversation with its customers “... to find how their lives have changed, how they think about the category, and then continuously funnel that into our product initiatives. That helped us a lot.”

Once the trust building initiatives started bearing results, the next step was to take it to a wider audience. The brand’s ‘Trusted by 1Cr+ Indians’ campaign highlighted the fact that a crore Indians had already ordered on the platform, post the lockdown. Apart from TV, the campaign ran on social channels, etc.

“The communication had to reflect how crores of people ordered during lockdown. Social influencing is a real way of building trust in consumers. It’s like asking, ‘So many people around are doing it, why aren’t you’,” Srivats adds.

While Swiggy has resumed operations in all the cities it’s present in, the focus currently is on servicing them instead of expanding into other cities. “It’s about ramping up our services in these cities very well. There are quite a few cities which do not have all the services like Genie and InstaMart,” he signs off.