Delivery businesses. What they have for us?

Photo by Kai Pilger on Unsplash

Do you believe, delivery modeled business like Swiggy and Zomato only deliver the food to you and it goes home. Get ready to know what is really happening behind the scenes.

This quarantine period has paved the way for many businesses to perish and many businesses to flourish. You would’ve seen or heard about business going out of the game just because of this long halt. Business is a system, that needs to run continuously for seamless flow. If it doesn't, it gets jammed, broken, and sometimes gets vanished.

And I’ve been observing a business for a long time, which has put a strong base and is going to take flight as soon as the economy rallies back. And that is the delivery business. Particularly Swiggy and Zomato.

I have both Swiggy and Zomato apps though I’m not a regular user of it. And I used to receive notifications about food and restaurants every day, and the notification bell goes more vigorous during the last working day of the month. What is more special about the last working day of the month. It is the salary day. And if the salary day falls on Friday, then no one can dam Swiggy or Zomato for the next couple of days.

But, as soon as the lock-down dawned, the restaurants around us were closed, people were not willing to buy anything other than essentials because of the fear of running out of cash. But even some Richie Riches refused to order food from Swiggy and Zomato after a few of their delivery agents were tested positive to Covid19. So Swiggy and Zomato faced a huge revenue drop day by day like any other business. But Swiggy and Zomato had remembered a golden quote at that time.

You can’t turn the wind, so turn your sail.

And now rather than a simple food delivery business, it is slowly migrating into a complete, everything deliverable business. But this has not started just now. For Swiggy this model has been seeded in early 2019 when it introduced Swiggy Stores, and Zomato recently has an option of Zomato Market which delivers products from around your stores. But, it fell on deaf ears at that time.

India's online grocery market is expected to be worth between $400 billion and $600 billion presently and may reach $700 billion in the next three years, according to a report by Knowledge@Wharton.

And Swiggy and Zomato want a piece of the pie in it. But, the market is not untapped. There are huge competitors like Walmart behind Flipkart, Amazon, Big Basket, and much more. But the analyst says that Swiggy and Zomato may have an edge over the other competitors because of their strong network of the delivery chains.

So, being a retailer or a consumer, what is the catch for us?

Previously the above-mentioned delivery business was completely like a business tie-up model. The user can only order the items, and Swiggy/Zomato takes those orders, buys it from the retailers who are only tied up with them, and delivers it to the customer. But, now Swiggy/Zomato prompts users for the shops from where they should bring the product from. And users say their preferred nearby stores due to the sentiments and relationships they have with the stores.

And I hope it would save tons of retailers from the other giants like Amazon, Flipkart from which users prefer to buy, only because of their home delivery options and discounts.

Now Swiggy and Zomato already got a good chain of delivery models. And has a good name and reputation with a huge customer base. Along with that, the customers' sentiment of buying goods from their favorite nearby stores are joining hands.

Will it help the retailers to compete with Amazon, Flipkart, and other e-commerce giants. Only time has the answer. 

News crunch:

Online food and grocery retail were expected to touch $10.5 billion by 2023.

But wait, is this going to be beneficial to the retailer in the long run. Read further.

Now back to the first line. The big pitfall that these retailers are expected to have is data handled by Swiggy and Zomato. Do you believe, Swiggy and Zomato only deliver the food and other products to the users and it goes home. No, it doesn't. They have been studying us. They know, what we eat, what we like, what we don’t like, when we order the most, when we don’t order, where the business is more and where it is less. So what does Swiggy/Zomato do with this data?

One expected answer is they sell these data to new restaurants and the new restaurants know what to prepare, how to sell this to customers, and much more. And the unsure answer, which I’m expecting is, Swiggy/Zomato soon to launch its own retail/food business down the streets.

It has the data and it uses it on, what to prepare, on what taste, on what quantity, on what day, and moreover we will be more attracted to the orange-colored and red-colored name billboard hanging up there with the most known names which have got good reputations (or simply they might have registered their names in our mind) all these days.

And next time when you see an orange-colored Swiggy or a red-colored Zomato store well designed, and with a decent architecture which knows what is your preferred food, which knows what you are going to buy, and offers the same with amazing discounts vs a typical hotel with a master in his vest at the entrance tossing the food or grilling the chicken, where would you prefer to go?

Comment down.

Written by

-Balaji SV