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swiggy: Swiggy eyes commerce play with Minis marketplace


Bengaluru: Food delivery app Swiggy is testing the waters for a broader ecommerce play, sources aware of the matter said.

The restaurant aggregator platform is working on a marketplace model to onboard local stores and direct-to-consumer (D2C) brands, multiple people aware of the matter said, adding that and a pilot project is already under way.

ET has seen at least one of the brands being tested on the marketplace.

This is yet another instance of the SoftBank-backed company looking to diversify outside of its core food delivery business.

“The idea right now is to onboard local electronics and fashion retailers onto the Swiggy platform,” one source said.

According to the content of the pilot that ET has reviewed, Swiggy’s delivery fleet will not deliver the orders. Instead, the merchant will fulfill the order.

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The company may look at using its existing delivery fleet in the future though.

How Swiggy's businesses stack upETtech

Illustration: Rahul Awasthi

“This is not a hyperlocal play. They (Swiggy) are building it as a national marketplace looking to enter the e-commerce business now. They are onboarding electronics merchants, too,” a person aware of the plan said.

One of the sources said the company had initially planned to build a social commerce platform – called Bazaar internally – but the idea evolved over time into a marketplace for local stores and brands.

“We’re currently piloting a platform named Minis on Swiggy that enables D2C brands, small businesses and individual entrepreneurs to showcase their offerings directly to lakhs of customers,” Swiggy confirmed the development to ET.

“We are continuously experimenting with ways in which we can delight our customers and enable our brand partners to succeed,” it added.

The ecommerce foray comes at a time when its core food delivery business has slowed.

Rival

, which went public last year, has seen its monthly active users plateau over the last three quarters to around 15 million.

Zomato’s gross order value (total value of food orders on the platform) has also seen muted growth over the last three quarters.

Meanwhile, Swiggy has been increasing its focus on its
grocery delivery service Instamart and
has committed $700 million for the business, cofounder and chief executive Sriharsha Majety told ET in December last year.

He had said that the gross merchandise value (GMV) run rate from its quick commerce business would touch $1 billion in the following three quarters and that the food delivery business has already touched a lifetime high of $3 billion in GMV run rate.

Run rate is a forecast of financial performance that takes a company’s current revenue in a certain period – one month or a quarter – and converts it to an annual figure to get the full-year equivalent.

“Essentially, food delivery players have built some capabilities over the years. Now they are looking at innovating and fully leveraging the platform they have built, be it the distribution capability or the partnerships they have built, and they would want to replicate the model to as many places as possible,” said Ashutosh Sharma, vice president and research director at market research firm Forrester Research.

Swiggy’s experiment into ecommerce comes at a time when the company is scaling down its subscription-based daily essential service Supr Daily.

ET reported on May 11 that the company had halted its pick-and-drop service, Genie, in some of the major metros as food delivery
companies struggle to hire enough delivery workers to meet demand.

Swiggy resumed the service on May 17 in Bengaluru, Hyderabad, and Mumbai, albeit only for short-distance deliveries from 7 am to 8 pm.

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