Swiggy Bets Big On Premium Food Delivery Vertical To Sustain Growth
Swiggy, India’s largest online food delivery platform, is betting on its premium food delivery vertical, Swiggy Xtra, to sustain its growth and profitability in the highly competitive market.
Swiggy Xtra is a curated selection of high-end restaurants and cuisines that cater to urban consumers’ discerning tastes and preferences. It offers exclusive benefits such as faster delivery, free desserts, complimentary drinks, and loyalty points.
What is Swiggy Xtra?
Swiggy Xtra is a premium food delivery vertical launched by Swiggy in October 2021. It is currently available in 10 cities across India, including Delhi NCR, Mumbai, Bengaluru, Hyderabad, Chennai, Pune, Kolkata, Ahmedabad, Jaipur, and Chandigarh.
Swiggy Xtra offers a curated selection of over 1,000 restaurants and cuisines handpicked by Swiggy’s food experts based on quality, popularity, and exclusivity. Some popular brands on Swiggy Xtra include The Bombay Canteen, Olive Bar & Kitchen, Farzi Cafe, Mamagoto, SodaBottleOpenerWala, Punjab Grill, and Smoke House Deli.
Swiggy Xtra also offers exclusive benefits to its customers, such as:
- Faster delivery: Swiggy Xtra promises to deliver orders within 30 minutes or less using its dedicated fleet of delivery partners.
- Free desserts: Swiggy Xtra customers get a free dessert with every order from select restaurants.
- Complimentary drinks: Swiggy Xtra customers get a complimentary drink with every order from select restaurants.
- Loyalty points: Swiggy Xtra customers earn loyalty points for every order that can be redeemed for discounts and offers on future orders.
Swiggy Xtra charges a nominal subscription fee of Rs. 99 per month or Rs. 249 per quarter for its customers. It also offers a free trial period of 14 days for new users.
Why Swiggy Xtra is a Strategic Move for Swiggy
Swiggy Xtra is a strategic move for Swiggy for several reasons:
- It taps into the growing demand for premium food delivery in India. According to a report by RedSeer Consulting, India’s excellent food delivery market is expected to grow at a compound annual growth rate (CAGR) of 35% from 2020 to 2025 and reach $2.5 billion by 2025. The report also states that premium food delivery customers have higher order frequency, basket size, and retention rate than regular customers.
- It differentiates Swiggy from its competitors. Swiggy Xtra is India’s first-of-its-kind premium food delivery vertical, offering a curated selection of high-end restaurants and cuisines and exclusive benefits. It gives Swiggy an edge over its rivals, such as Zomato, Amazon Food, and Dunzo, which offer similar food delivery services without any differentiation or value addition.
- It enhances Swiggy’s brand image and customer loyalty. Swiggy Xtra helps Swiggy position itself as a premium and aspirational brand that caters to urban consumers’ evolving needs and preferences. It also allows Swiggy to build customer loyalty and retention by offering superior service quality, value proposition, and rewards.
- It improves Swiggy’s unit economics and profitability. Swiggy Xtra helps Swiggy improve its unit economics and profitability by increasing its average order value (AOV), reducing its delivery cost per order (DCO), and generating additional revenue from subscription fees and loyalty points. According to Swiggy’s co-founder and CEO Sriharsha Majety, Swiggy Xtra has an AOV of Rs. 600-700 compared to Rs. 300-400 for regular orders and a DCO of Rs. 20-25 compared to Rs. 40-50 for standard charges.
How Swiggy Xtra Can Help Swiggy Achieve Its Long-Term Vision
Swiggy Xtra can help Swiggy achieve its long-term vision of becoming a food-tech giant that offers a range of products and services across the food value chain.
Swiggy has already diversified its offerings beyond food delivery to include cloud kitchens (Swiggy Access), grocery delivery (Instamart), convenience store delivery (Genie), subscription-based meals (Swiggy Daily), health-focused meals (Health Hub), and hyperlocal delivery (Swiggy Go).
Swiggy Xtra can complement these offerings by creating a loyal customer base that can be cross-sold and upsold other products and services from Swiggy’s ecosystem.
Swiggy Xtra can also help Swiggy expand its market share and reach the premium food delivery segment with a high growth potential and low penetration in India.
Swiggy Xtra can also help Swiggy strengthen its relationship with its restaurant partners by providing them with higher visibility, demand generation, and revenue opportunities.
Summary
Swiggy Xtra is a premium food delivery vertical offering customers a curated selection of high-end restaurants and cuisines and exclusive benefits.
Swiggy Xtra is a strategic move for Swiggy that can help it tap into the growing demand for premium food delivery in India, differentiate itself from its competitors, enhance its brand image and customer loyalty, improve its unit economics and profitability, and achieve its long-term vision of becoming a food-tech giant.
The article is “Swiggy Bets Big On Premium Food Delivery Vertical To Sustain Growth.“