Swiggy, a food delivery company in India, launched a premium grocery service, “Handpicked”, on a pilot basis, to offer high-end products that are either imported or manufactured domestically. The move is part of the food aggregator’s efforts to diversify into non-food delivery services amid rising competition in the online grocery service space. With the new service, Swiggy has an opportunity to capitalize on the rising premiumization trend across the CPG industry, fueled by consumer willingness to pay a premium for high-quality products, says GlobalData, a leading data and analytics company.

Suneera Joseph, Consumer Analyst at GlobalData, comments: “Looking to diversify beyond its mainstay, Swiggy launched Handpicked to target premium consumers. The premium grocery service launched in Bengaluru on a pilot basis and is an invite-only platform for now. This is the company’s second delivery business, following the success of its first online grocery service, Instamart.

“The premium platform is curated to offer unique and high-end grocery products that are not easily accessible in supermarkets. This is in line with GlobalData’s Q4 2022 consumer survey results, wherein 40% of the Indian respondents find products made by foreign/global brands of luxury quality, while 47% perceived them to be good quality*.”

The COVID-19 pandemic led to a dramatic change in consumer shopping habits during the lockdown periods, accelerating the shift to online shopping. To capitalize on the opportunities presented by lockdowns as hotels, restaurants, and other foodservice outlets had to close, Swiggy and its rival, Zomato, ventured into non-food delivery services, including express grocery delivery. The strong growth potential for e-grocery services in India indicates untapped growth potential for online food delivery platforms such as Swiggy and Zomato. The strong demand for e-groceries is substantiated by GlobalData’s Q4 2022 survey, wherein 36% of Indian consumers said they continue to purchase grocery products online, while 23% of Indian consumers said they shop online more frequently**.

Joseph concludes: “To stand out from competition and increase profitability, online food delivery platforms are focusing on expanding their footprint in the online grocery business as they move away from pureplay food aggregation. These platforms should focus on expanding their product range with high-end and gourmet groceries that are not easily accessible and appeal to Indian consumers who are willing to pay a premium.”

*GlobalData Q4 2022 Consumer Survey—India, with 554 respondents, published in November 2022

**GlobalData Q4 2022 Consumer Survey—India, with 554 respondents, published in November 2022