The CEO - food marketplace, also talked about how Swiggy recently achieved profitability and how it’s becoming an ad medium.
Over the last couple of years, leading food aggregator Swiggy has become ubiquitous during the Indian Premier League (IPL) season, with its ‘Match Day Mania’ campaign. The online food ordering platform has been running the campaign since 2018.
It ran the campaign this IPL season as well, and launched two TVCs about special offers and discounts. However, the ‘mania’ wasn’t comparable to its previous editions.
Speaking to afaqs! during Goafest last week, Rohit Kapoor, CEO - food marketplace, Swiggy, said that this year, it has taken a slightly different approach and is focussing on regional markets.
"We are focussing on those regional markets where there’s a significant uptick during the IPL. While the IPL remains a major event for everyone, including us, we have chosen to be more targeted in our approach. This approach has proven to be effective, delivering positive results, in terms of the numbers."
Nine years after its launch, Swiggy announced, last month, that it has achieved profitability in its food delivery business. This success has involved identifying areas that can be improved to enhance margins, and eliminating costs that don’t contribute to the overall health and performance of the business.
Kapoor said, "Achieving profitability has been a lengthy and continuous effort, rather than a one-time occurrence."
During the conversation, Kapoor also spoke about Swiggy’s marketing efforts, and how the platform is becoming an ad medium.
What has driven Swiggy’s journey towards profitability?
For all companies, profitability is an evolution. Let me provide some background. Swiggy is one of the youngest companies to achieve scale and profitability. Despite being just nine years old, it pioneered food delivery in India, where the concept was previously limited to discovery.
At a certain point in our growth trajectory, we were able to optimise practically all aspects of the business. This process has been ongoing for the past one or two years, where every quarter, we identify areas that can be improved to enhance margins and eliminate any costs that don't contribute to the overall health and performance of the business.
Which segments are driving the growth?
The growth has been observed across various segments. In the grocery business, we're experiencing rapid growth, while the food business is also witnessing significant expansion. The growth is widespread, reflecting our company's strong focus on both growth and profitability.
Which cities do you plan to expand into this year, particularly in the gourmet segment?
We have seen significant enthusiasm for the gourmet segment in top-tier cities, including metros and the next tier towns. Currently, we operate in 32 cities, and may expand into another five or 10 cities. But beyond that, even within the cities we're already present in, there is a tremendous opportunity for further growth in the gourmet sector.
Within the segment that values gourmet, there are still many consumers who're yet to experience it. There's ample room to reach out to a much larger audience. We anticipate many new brands and restaurants coming in. Gourmet is also a set of restaurants and brands that are very specific to gourmet. We're seeing new companies and brands wanting to be that category, or creating new new brands just for the category.
Overall, where is Swiggy witnessing growth?
Swiggy is experiencing strong growth, particularly in Tier-II/III cities. We have expanded our presence to over 550 towns across India.
In the previous years, Swiggy has had several iconic ads during the IPL. But this year, we haven't seen the brand advertising as much. What's the reason for that?
When we're planning our campaigns, we first analyse the traffic that we desire during the specific period, considering data and past patterns. Based on this analysis, we formulate a plan that aligns with what works best for us at that time. The 'Match Day Mania' is working quite well for us. One may not remember this campaign five years later, but right now, it's delivering the numbers.
This year, we've taken a slightly different approach. We're focussing on those regional markets where we've observed a significant uptick during the IPL. As a result, we released the ad, featuring Neena Gupta, in 6-8 languages.
While the IPL remains a major event for everyone, including us, we have chosen to be more targeted in our approach. This approach has proven to be effective, delivering positive results, in terms of the numbers.
Swiggy has been offering advertising opportunity for other brands. For example, SonyLIV promoted its show 'Rocket Boys' on Swiggy. How do you view the opportunity?
It's a fantastic opportunity for Swiggy. The high traffic volume makes it a valuable platform for brands that are looking to reach out to a large audience. Not many apps or platforms have the level of traffic that Swiggy attracts. We're constrained by how much space we can offer, and not by the demand.
We strive to ensure that our advertising remains relevant to the consumer's interests and aligns with their needs. We have a dedicated team focussing on third-party partnerships and ads.
Additionally, we have other properties such as Dineout, which is a well-established business in its own right, and SteppinOut, one of India's largest companies for festivals and music events. Cross-collaboration across platforms is possible, creating further opportunities for brands.
Certain occasions and events naturally lend themselves to specific advertising opportunities. For instance, during the IPL, snack time becomes prevalent, offering beverage brands a chance to capitalise on high consumer engagement. Being present in these moments makes perfect sense. We aim to provide value and ensure a mutually beneficial partnership with all the brands that choose to invest in advertising with us.
Our focus is not solely on the revenue generated from advertising. We're equally obsessed about ensuring that advertisers receive significant returns on their investment. We aim to create long-term value for all the stakeholders involved. Building something that doesn't deliver value to each party involved, would be counterproductive.
Swiggy has become a verb now - 'let's Swiggy it'. The brand name is now synonymous with the idea of ordering food. Your thoughts?
We consider ourselves incredibly fortunate to have achieved such recognition. However, this accomplishment isn't solely the result of brand campaigns or marketing efforts. People choose to use Swiggy repeatedly because of a few key factors. They find it easy to discover the food they desire, enjoy engaging with the user-friendly app, experience fast transactions, and receive relevant information.
Moreover, the food arrives in good condition and on time, with prompt resolution of any issues. While these may seem like simple aspects, repeating this positive experience a million times, is where the true magic lies. Additionally, effective creative marketing plays a significant role in enhancing our (brand) presence and potentially transforming it into a verb.
Similarly, one of the actors in Swiggy ads has become popular as 'The Swiggy Uncle'.
Certain things have a way of sticking with people, and the association of 'The Swiggy Uncle' and the 'Gulab Jamun' ad is one such example. It's truly commendable that our team was successful in creating an impact. Full marks for just landing it right. How many ads can you recall years later? The actor who portrayed the character did an outstanding job of establishing a connection with the audience and being relatable. His portrayal has certainly left a lasting impression.
It's, indeed, a positive outcome when people associate individuals with a particular brand. It generates organic conversations and discussions, without any forced promotion.