Swiggy Business Model (How Swiggy Works) {UPDATED}

In today’s article, I will tell you how Swiggy works and what is the Swiggy Business Model? Let me tell you that Swiggy has become a $3.3 Billion-Dollar company in the last 4 years.

So if you want to know, how does Swiggy makes money, then read this article completely. Through which you will understand that in what ways does Swiggy make money?

How does Swiggy Work?

You must have seen in Swiggy’s app or website that where you want to order food, Swiggy shows you the restaurants and hotels around it from where you can order food.

As soon as you place an order to get the food, the notification goes to the restaurant because they also have the Swiggy App so that they know who has ordered the food and deliver the food to them at which location is.

So after that, the restaurant accepts the order and starts cooking and if the food is already prepared then it starts packing for delivery.

At the same time, a notification goes to all the delivery partners, and the first one of them accepts the order, he gets the order, then he goes to the restaurant to pick up the food and take food from there to the customer’s house.

Google map Also Integrated by Swiggy

Swiggy has also integrated Google Maps, which lets customers know how long time it may take for food to be delivered.

Swiggy manages their all delivery partners by own.

The best thing about Swiggy is that Swiggy manages her delivery partner herself. The advantage of this is that it can increase its efficiency and at the same time control the quality, so the better the quality, the more customers like Swiggy and trust in it.

Swiggy Business Model Case Study

Let us now know what is the business model of Swiggy and how Swiggy earns money.

Swiggy makes money by 7 ways that I am going to tell you one by one right now.

Business Model of Swiggy — 7 Income Sources of Swiggy

Commission — (Swiggy Business Model)

All the restaurants you order food from Swiggy pay a commission of 15% to 25% to Swiggy.

All these restaurants give this commission to Swiggy because Swiggy brings so many orders for them so that their food reaches more and more people and they are able to earn more and more money of which they give money to Swiggy as commission.

There are some restaurants whose food Swiggy sells on its own platform (Swiggy Exclusive) so Swiggy charges a small commission (2% to 5%) from them. Because they are selling their food on Swiggy’s platform.

Delivery Charges — (Swiggy Business Model)

As you know, there is no minimum order value for ordering food from Swiggy, that is, you can even order @20rs food on Swiggy.

Now the thing to understand here is that if you ordered a meal of ₹ 50 from Swiggy, then you will spend more than the commission of that meal on the delivery charges.

So Swiggy will not make any profit from it, so he takes a delivery charge from us.

You may have noticed that delivery charges sometimes seem less than sometimes more.

This happens because delivery charges depend on some of the items below and according to the delivery charges are incurred —

  • How far is the restaurant from your house?
  • How big is your order?
  • How much money have you ordered?

However, most of the delivery charges range from ₹ 20 to ₹ 100 only.

Sometimes it happens that orders are too much for Swiggy and the delivery partner is less. At such a time, Swiggy also takes the help of companies like Ola and Uber in which you have to pay a little more than the delivery charge, so Swiggy earns extra money this way too.

Cloud Kitchen — (Business Model of Swiggy)

Now Swiggy has also started its own cloud kitchen service. Let me tell you that over 20 million orders are received every month on Swiggy, which means about 6.5 lakh orders are received in 1 day.

In this way, Swiggy has so much data so that they know all the areas in which people like what kind of food.

In this way, using this data, Swiggy starts his cloud kitchen in that area and then delivers the food.

People who don’t know what cloud kitchens are?

Let me tell them that cloud kitchens are just delivery units like you can only order food but by going there you cannot eat food and this is called a cloud kitchen.

Since Swiggy manages the cloud kitchen itself, Swiggy keeps all his profits with himself and thus earns a lot of money from the Swiggy cloud kitchen.

Swiggy access — (Revenue Model of Swiggy)

Swiggy Access is a central kitchen. In which, along with their own cloud kitchen, there are also kitchens of other company and stabilized brand.

In this way, when a brand wants to expand to another city, for that, the brand has to do a lot of research on what kind of food people like to eat in that area for which they have to test.

After that they have to build the infrastructure, then have to set up their kitchens in that area and in doing all this, the cost of that brand will be very HIGH.

That is why the brand goes to Swiggy instead of spending so much money because Swiggy has a lot of data so that he can easily find out what kind of food people like in a particular area.

Thus, that brand does not have to spend any kind of market research cost and because Swiggy has its own Swiggy access i.e. cloud kitchen which has a very large infrastructure that has all the kitchen equipment. That is why that brand does not have to spend money on infrastructure.

Thus, these brands can start their operations elsewhere without spending much. In which Swiggy helps them even more such as– What stocks are needed and how to plan, how is the demand for food orders, how to do the preparation of food quickly, All these advice Swiggy gives to that brand.

Swiggy subscription — (Swiggy Business Model Canvas)

As you know Zomato also has a Zomato Gold Subscription, in the same way, Swiggy has also launched its Swiggy super subscription through which Swiggy earns money.

In which if you take a super subscription of Swiggy, then you will not have to pay any delivery charge for delivering food to Swiggy for 1 month. The per month cost of the Swiggy Super subscription plan is only ₹ 49.

Swiggy shows advertisement in its app and website, in which Swiggy shows two types of advertisement:

  1. Banner Ads: When you open Swiggy’s app or website, the restaurants you see upwards in it are called Banner Ads.
  2. Other Ads: When you see the listing of the restaurant in Swiggy’s app or website. So if you want your restaurant to be shown first on that list, then you have to run the Ad of your restaurant there so that your restaurant will be shown first on that list. So that more and more people will be able to see your restaurant and you will get more and more orders.

Affiliate Marketing — (Swiggy Business Model)

sometimes you must have seen that when you order food from Swiggy, you see a credit card advertisement in the app or website below, such as American Express, city bank, etc. So if you click on the advertisement of that credit card and buy their credit card, then Swiggy gets some commission.

Conclusion

Now you must have known about the Business Model of Swiggy and what are the ways in which Swiggy earns money.

In this article, we have told you about 7 ways of the “Swiggy Business Model”

So if you have a business then you can also apply these methods in your business and create a very big brand of your own like “SWIGGY”

We hope that you must have liked this article, if you want to know about the business model of another brand, then write in the comment below.

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