'Swiggy's return on investment for tech initiatives pretty massive'

We measure RoI for each of our technology initiatives, depending on various contributing factors such as the design, the product, the technology used, said Rao

Artificial intelligence (AI) and other technologies are core to Swiggy’s business, says Madhusudhan Rao , who was recently appointed the food delivery firm’s chief technology officer (CTO) . The company is “doubling down” on its technology-driven bets, Rao told Aryaman Gupta in an interview via video calling. Edited excerpts

What is Swiggy’s investment strategy for technology?

We are an AI-first company and have always invested in technology. The only way to deliver orders within strict timelines – roughly 30 minutes for food orders, and around 15 minutes for Instamart orders – at such a scale, in a manner that is not cost-prohibitive, is by using technology. 
 

Technology is central to the Swiggy journey.

Over the years, we have continuously made investments in many areas including resilience, security, faster turnaround times, improving discovery for customers, improving earnings for our delivery partners, and customer-support aids. We have ramped up our investment in generative AI. We are also using generative AI to improve efficiency.

What return on investment (RoI) are you seeing with your technology initiatives, especially AI?

Almost all our initiatives are AI-led, and this has been the case for at least the past four or five years. The RoI for each of our initiatives is pretty massive. We measure RoI for each of our technology initiatives, depending on various contributing factors such as the design, the product, the technology used. The returns we are seeing are quite significant.

What are your recent technology initiatives, especially for generative AI?
 

We have recently accelerated the adoption of generative AI. And this is allowing us to deliver better discovery outcomes for our customers. We recently launched ‘neural search’ which enables users to search for dishes and restaurants using conversational and open-ended queries and receive recommendations tailored to their specific needs. For instance, if a customer searches for “traditional dishes of Karnataka,” it would throw up results irrespective of whether the dishes are tagged as such.

We have made significant investments in understanding voice, sentiment and other patterns in, perhaps, very noisy environments, or when customers use different languages.

We recently announced ‘menu score’ as well on the restaurant side. Customers prefer ordering from restaurants where they can see detailed images of the food, product descriptions, etc. This is data that restaurants usually don’t have in a structured fashion. Menu score provides them access to factors like popularity, profitability, uniqueness and customer feedback. 
 

We are piloting a few more offerings in generative AI for our restaurant partners. We are also building a pilot for a chatbot with a large partner, where we are leveraging GPT-4 to deliver a much better contact center experience for our customers as well. We have also launched offerings like ‘What To Eat’, where, based on their moods, customers can discover and order what they want. 
 

One area that has worked well for us is our investments in building capabilities that can be leveraged across all our verticals like food delivery, Dineout, Instamart. This means that instead of building technology capabilities for each vertical separately, we are now able to leverage them across verticals. This allows us to spin out new verticals very rapidly, thereby reducing our costs.

Have your initiatives cut costs?
 

We are digital native, which means that the company needs technology to do the things it is doing, and do them better. When operating at this scale, it is important to keep the cost of running these things low, which has also been a key focus area for us. Especially with the adoption of generative AI, the inferencing costs can be significant. We are, therefore, making investments in these areas to keep our infrastructure and hardware costs low to ensure the savings are passed on to the overall ecosystem of customers, delivery partners and restaurants. It is more about unlocking capabilities.

Do you plan increasing investment?
 

We are doubling down on our efforts in terms of our technology initiatives and investments, especially in the realm of generative AI. We have quite a few more technology initiatives in the works as well. The way we look at is how do we deliver higher impact year-on-year with the same per capita costs or team sizes. Our previous and continuing investments is allowing the same set of team members to do a lot more. All of this is coming on the back of the efficiency and capability building that we have done.