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Swiggy Ltd

Swiggy, founded in 2014 and based in Bangalore, has evolved from a food delivery startup to one of India's largest online food and quick commerce platforms, serving over 580 cities. Initially focused solely on connecting users with a wide network of restaurants, Swiggy has built a reputation for fast deliveries and reliable service, with features like live order tracking, in-app support, and multiple payment options. Beyond food, Swiggy has diversified to meet broader urban lifestyle needs through Swiggy Instamart, a quick commerce service for grocery and daily essentials with 15–30- minute delivery times, and Swiggy Genie, which facilitates same-day delivery of packages, documents, and essentials within cities. This range of services has positioned Swiggy as a go-to platform for convenience in India’s bustling metropolitan areas.

Unified app for consistent user experience across services

Swiggy has a single app for its services- food delivery, quick commerce, and otherservices. The unified app approach and high frequency offerings helps increase user engagement across multiple offerings, ensures user stickiness, and enables the quick introduction of adjacent and new offerings cost-effectively. This creates an opportunity for cross-selling helping lower consumer acquisition costs. For example, it can tap into the Food Delivery fleet during non-meal hours to service Quick Commerce orders, which helps meet delivery expectations and fulfil orders efficiently. The company also offers dinning out, event booking and other services

Quick Commerce penetration

As of September 10, 2024, Instamart has expanded its footprint in India with a network of 605 active dark stores across 43 cities, a strategic move to capitalize on the rapidly growing quick commerce sector. The share of quick commerce in the online retail market has surged from approximately 0.14% in 2018 to 4.8% in 2023. Projections indicate a continued fast-paced growth of 60-80% annually until 2028, with penetration rates anticipated to reach between 17-30% of online retail, translating to a market size of ?2,320-4,240 billion (US$ 29-53 billion). However, entry into this lucrative market segment is complicated by challenges such as managing delivery fleets, potential channel conflicts between scheduled and on-demand delivery models, and the optimization of fulfillment networks.

Valuation and View:

While the lower valuations are attractive but the consistent lossmaking nature of business and negative cashflowsis denting the sentiments. We recommend to AVOID due to the above reasons.

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