Swiggy’s grocery delivery service Stores likely to face stiff competition in India, says GlobalData

Following the recent announcement that Naspers-backed India-based food-delivery start-up Swiggy is foraying into on-demand product deliveries across categories with concierge-like service ‘Swiggy Stores’ in Gurugram, a city just southwest of national capital New Delhi,

Shagun Sachdeva, Consumer Insights Analyst at GlobalData, a leading data and analytics company, offers her view:

“Swiggy, which in December 2018 raised $1bn capital to support expansion, has partnered with 3,500 stores, including Zappfresh, Ferns N Petals and drug store chain Apollo Pharmacy, to deliver groceries, medicines and other day-to-day essentials within an hour across Gurugram. Swiggy has played the card well with its one hour delivery. The latest move pits the company directly against bigger rivals such as China’s Alibaba, Google-backed Dunzo, Amazon and Walmart-owned Flipkart in the online grocery space, which is dominated by Big Basket, followed by Grofers. However, most of them have designated delivery slots and Amazon has a two-hour delivery service. In addition, Swiggy plans to deliver medicines, among other daily amenities, and this can emerge as a game changer.

“However, Swiggy’s strategic move of progressing beyond food ordering space to the next level of delivering household essentials is likely to face stiff competition in the huge pool of established e-commerce platforms. Swiggy needs to have constant funding to sustain in the huge competitive market, and find a way to avoid the discount game. Swiggy can reduce the risk of failure by learning from the other brands/products which have already under-performed, as failed innovation can severely impact the company’s profit and reputation. Eventually, Swiggy with its innovative delivery service will gain a broader appreciation in the fast-moving consumer goods industry by obtaining insights from both within and outside of the sector.”

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