Acquisition of Scootsy will add muscle to Swiggy's network of restaurants

Swiggy is in a hurry. Last week, the online food delivery company scooped up Mumbai-based on-demand delivery firm Scootsy. The acquisition of three-year-old Scootsy will serve two purposes: One, it will add muscle to Swiggy’s network of 40,000 restaurants, and two, it will help diversify its delivery repertoire. According to reports, Swiggy wants to move beyond food to cover pharma, electronics and groceries.

If that is so, fulfilling the promise of timely delivery over and over again will remain its key challenge. Too many players in the industry have fallen by the wayside failing to win customer trust, faltering on the promise of on-time delivery. Swiggy wants to make that — on-time every time — the cornerstone of its strategy, a la Indigo Airline. With its own fleet network of 55,000 two-wheelers — the largest in the industry — the company is perfectly poised to seize the initiative. It boasts of the lowest turnaround delivery time of 32 minutes against the industry average of 40 minutes. “One of our key differentiators from the beginning has been our logistical strength, through which we have end-to-end control over the entire delivery experience,” says Srivats TS, vice-president, marketing, Swiggy. 

Achieving precision in demand forecasting to area-level mapping of cities to help delivery partners navigate a route in the shortest possible time are two key elements that have helped Swiggy get the logistics part right. For example, despite heavy rains in Mumbai over the last two months, Swiggy claims to have had its service up and running in the city without disruption. Judicious allocation of delivery partners, equipping them with rain gear and resting hubs have helped the company to motivate its delivery partners to stick to the promised delivery timelines. 

Swiggy has been applying the learnings from its established markets to newly added cities such as Jaipur. Take this case, for instance. On debuting in one of the non-metros, Swiggy realised that the team was taking longer than the company’s average fulfilment time to deliver the orders. Based on the city’s topography and terrain, the firm then optimised the routing algorithm to help partners reach their destination faster. It also worked backwards — encouraging restaurant partners to reduce the food preparation time. These steps helped it cut down despatch time to 29 minutes in the non-metros, which tend to have smaller service areas.

Srivats TS, Vice-president, Marketing, Swiggy

Ayan Banik, associate vice-president, strategic planning, Cheil India, says, “The online food delivery space, like the taxi aggregator business, is all about addressing and meeting consumer needs at a time of his choice. The reason why Uber and Ola have managed to score over traditional taxi services is that they have killed the uncertainty associated with the time taken for a vehicle to come to the consumer’s doorstep. The same principle applies to the online food space. With assured delivery timelines Swiggy has managed to win consumer trust by eliminating the uncertainty associated with the delivery.”  

Swiggy has been quick to learn from the experiences of companies in other industries, often related. Banik points out that Flipkart became a category leader on the strength of its in-house logistics system assuring timely delivery to buyers. Swiggy, too, has done the same as it has been quick to realise that it cannot fulfil the on-time delivery promise by relying on the services of a third party logistics provider. To speed up the process, Swiggy invested heavily on data analytics to get the demand forecast right. 

“The team looks at multiple elements including population of an area, upcoming local festivals or events, holidays if any and local weather to forecast food demand. Based on historical data during festivities, we know which part of the day is likely to see a surge in demand. The company provisions for supplies and work shifts for its delivery partners accordingly,” says Srivats.

Swiggy relies on technology to streamline pickup from its restaurant partners. Based on history of orders received, delivery partners are stationed near the pickup points. Of course, for all this to fall in place training and skill upgradation of personnel is key. To that end, the company has put in place a strong onboarding process for its delivery partners. The learning module covers end-to-end familiarisation and usage of the delivery partner app via scenario-planning. This is followed by on-ground training with mock orders. Sharing learning modules on expected behaviour, road safety, rewards and recognition with its delivery partners is now a hygiene factor.

All along Swiggy has been closely following its consumers, understanding them, taking their feedback, identifying and fixing their pain points. It has done away with the restrictions related to minimum order size and delivery charges. All these steps have helped it increase consumer traction. Swiggy is present in 17 cities at the moment and plans to expand into more markets over the next few months. Its latest acquisition — Scootsy -— fits in perfectly with this plan.