Question

Do a comprehensive comparative analysis of food delivery apps (Zomato And Swiggy). Briefly explain their revenue model

Discuss in detail the good and bad UX features of each app relative to each other.

Answer 1

Zomato And Swiggy

zomato :-

Zomato is a food point search and discovery service founded in 2008 by Deepinder Goyal and Pankaj Chaddah. It is currently operates in 25 countries, including India, Australia. Brasil, New Zeland, Singapore and the United States and in middle East Qatar. Now we, Future work technologies will explain zomato business revenue model. And how it works.

Zomato Business Revenue Model -
Advertising on their website and appZomato’s advertising is to the point, when users search for specific keywords, ads of restaurants are shown for that specific keyword. This makes it highly targeted. This is also hyper local. Consulting services with data 98% of restaurants fall within the first year and Zomato can help in this! Zomato sits on a pile of data and information. They have an in-built analytics platform that run a lot of queries and get important information out. Say if a person wishes to open a new food point, they can approach with Zomato and find out the success rate of opening a restaurant in a particular location. Food point owners can also find out what is the most popular type of food in the area, understand the needs of the customers and provide a complimenting service that will help build their business.

Zomato Events :-
Zomato has forayed into the events space by partnering with restaurants and creating limited events. They make a sale through the price of the tickets. A lot of Zomato hosted annual parties were held.

• Online Food Ordering

Very late to the game, Zomato started their online food delivery service. Different from other players like Swiggy, Zomato does not have their own delivery system, they let users place the order through the website or the app and the restaurant fulfil that order through by their own.

• Zomato Restaurant Guide Discontinued

Zomato started food point guide for the famous cities in India. They tied up with the e-commerce behemoth, Flipkart and hoped to sell around 200,000 copies. The last of this food point guide was created in 2012 and has not been updated since.If you look deeper, they are building strong roots to get a strong hold of the restaurant business, not only in India but also all over the world but From the outside, Zomato may seem like a simple company with a simple product.. Yelp made revenues of $245 Million and Zomato was just at 3% of this amount. At the rate they are spreading and making a strong eco system, At one point like this , zomato will take a huge piece of Yelp’s business.

• Zomato Revenue Model

zomato open with only listing restaurants Static menu and getting reviews from users about the food served and their experience .This created a atmosphere for consumers and food point and Advertising and sponsored listing of restaurant are the main revenue earning plan. Zomato business revenue model.

Zomato also started with online food ordering and delivery but its only available in Top metro cities and premium restaurants and zomato charges from 10–15 % for online ordering and extra charges on delivery by Zomato.
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Swiggy

For all the foodies, what more could you ask for than having your favorite food from your favorite restaurant, delivered within 30 minutes, anywhere you are!

And in this fast-paced world, who would even prefer to go out to a restaurant, wait in the traffic, and then wait some more at the restaurant before the food is served?

A squad of 3 friends, Nandan Reddy, Rahul Jaimini, and Sriharsha Majety, perhaps knew these issues faced by every food-lover all too well.

So, what did they do?

They came up with their amazing all-new Swiggy app! An on-demand food ordering and delivery platform where you can order your favorite food from your favorite restaurants, and get it delivered within 30 minutes – all with just a tap!

You can also track your order to know how long it will take to get delivered.

These three entrepreneurs spotted a huge gap in the online food ordering and delivery industry of India. The next thing they did was to embrace the opportunity with open arms, and they filled the gap by launching Swiggy.

Business Model Canvas of Swiggy

The business model canvas of Swiggy is based on a hyperlocal on-demand food delivery business operation. Working as a bridge between restaurants and customers, Swiggy utilizes an innovative technology platform that works as a single point of contact.

Their app allows urban foodies to order food from nearby restaurants and get it delivered at their doorstep. A broad list of restaurants and their menus with prices are exhibited in the app to choose and order from. Apart from accumulating restaurants, Swiggy also has its own fleet of delivery partners. They pick up orders from partner restaurants and deliver it on-demand in less than 30 minutes.

Because Swiggy operates as a dual-partnership model, it also benefits restaurants that can receive more orders from customers using their own Swiggy app.

Once the order is placed, they will know the order details, prepare the order and deliver it to Swiggy drivers. This way, restaurants don’t need to use their own delivery personnel, saving costs and efforts.

All the Swiggy drivers in the vicinity receive a broadcast signal on their own Swiggy drive app when the order is placed. After they accept the order, they deliver it right on the customer’s doorsteps.

1. Customer Segments of Swiggy

The customer segments of Swiggy include those people who do not wish to go out to restaurants and eateries to buy food. People who want to order food online and want to get it delivered at their doorsteps are the principal customers of Swiggy.

After its recent business expansion, people who want to buy and get other products delivered from nearby shops and stores of groceries, pharmacies, electronics, flower shops and gift shops in the city are also Swiggy’s customers.

Few examples of stores currently available on Swiggy platform are Sodhi Super Marche, Garg Dastak, Best Basket and V.M Retail.

2. Value Propositions of Swiggy
The main value proposition of Swiggy is its no-restriction order policy and efficient online payment system.

* Swiggy has no minimum order requirement for delivery which is why it often receives orders amounted to less than Rs. 100. It is the reason for Swiggy scaling up to 14 million orders per month.
* Easy access to customers on Swiggy’s app is the main value proposition offered to restaurant partners on the platform. Also, partner restaurants that join Swiggy’s Access can save up to 25% of their operational costs.
* Swiggy Stores deliver groceries, flowers, medicines, and other things to the doorstep of its customers within an hour.
* Swiggy Go – It offers instant pick & drop services used by customers to send packages, lunch boxes to their kids, documents to the office, and parcels anywhere across the city. Also, customers can use Swiggy Go services to drop laundry or fetch forgotten keys.

Digital Wallets

* Paytm – Pay through your Paytm account and enjoy plenty of wonderful offers and food deals.
* PhonePe – Get the ultimate convenience by paying through PhonePe, the simplest digital wallet for online payment.
* Freecharge – Swiggy has also included Freecharge as an online payment method to facilitate its customers efficiently.
* Mobikwik – Now you can collect SuperCash through Mobikwik’s offers. So, get ready to avail amazing benefits on many services.

Cards

• Credit and Debit Cards – Via Swiggy’s net banking facility, you can use any debit and credit card. Plus, you can also avail great offers on them, and you can even save your card details for your future payments.
• Sodexo Meal, Ticket Restaurants Meal & Zeta Food Card – Got these meal cards? Great! Use them on Swiggy for your food orders.

Others

• LazyPay – Pay now or pay later for your meals, LazyPay is here on Swiggy for you to handle your lazy moods of payments!
• Cash-On-Delivery – Old is gold, isn’t it? Pay for your Swiggy orders in cash if that is more convenient for you.

Another value proposition is its delivery competency. Its fleet size increased to 45,000 delivery personnel. It has over 20,000 active restaurant partners on its platform.

It’s operating in 8 cities and has even launched a central kitchen base facility for various restaurants. Swiggy has more than a million app downloads.

3. Customer Relationships of Swiggy
Swiggy has positive customer relationships. It provides 24/7 active customer support to help customers anytime, anywhere. It uses ‘Customer Support Chat’ services.
It also has active social media pages where it responds promptly. To stay in touch with its customers and partners, it has developed excellent rating, review, and feedback systems.

4. Channels of Swiggy
The channels of Swiggy are mobile app, websites, and digital marketing. Its mobile app is available on both Android and iOS. In 2019, Swiggy launched Swiggy Stores and Swiggy Go to expand beyond food delivery.

5. Key Resources of Swiggy
As it has partnerships with local restaurant and shops, its main resources are local partners. To name a few, Biryani Blues, Keventers, BombayKery, Wok Paper Scissors, and Yogisthaan are the bestselling restaurants at Swiggy. Other key resources are delivery providers and its own human resources to manage administrative and technical operations. Technology is another resource it uses to operate its apps.

6. Key Activities of Swiggy

• Building partnerships with eateries and retail shops
• Hiring delivery providers and suppliers (full-time/part-time/freelancers)
• Acquiring customers and managing their orders
• Managing delivery and payment process
• Managing technical operations
• Updating system and building IT infrastructure
• Handling queries and concerns of customers and partners
• Picking and delivering items for customers via Swiggy Go

7. Cost Structure of Swiggy
Swiggy has to incur costs and expenditures for its day-to-day functions. Its major cost sources are:

• Payroll expenses for its employees and delivery partners. It also includes incentives and benefits which Swiggy offers to restaurants. For example, giving a commission of about 2- 3%.
• Costs of application and website development
• Running costs and maintenance charges
• Administrative, advertising, and marketing costs
• Additional costs in terms of promotional offers and benefits given to customers
• Kitchen base-like facility setup and maintenance costs
• Returns, refunds, and miscellaneous expenses

8. Revenue Streams of Swiggy

• Delivery charges-

The first type of revenue stream Swiggy obtained is from its customers. A nominal delivery fee of Rs. 20 to Rs. 40 is charged from customers on orders below a threshold value of Rs. 250. Swiggy raises the charges during high order demands or unusual weather conditions.

• Commissions-

Swiggy acquires another major part of the revenue stream from commissions. It collects commissions from restaurants to generate sales leads and to deliver their food items through Swiggy’s fleet. Restaurants have to pay 15% to 25% on every order placed from Swiggy’s website.

• Advertising -

Swiggy earns advertising revenue in the following ways:

Banner Promotions – Swiggy promotes and displays ads of various restaurants on its app. Restaurants, related to different regions, receive greater visibility via banner promotion and pay price for the displayed page.
Priority listing of restaurants – Swiggy charges restaurants premium rates to give them priority in the list of available restaurants. A restaurant has to pay high if it wants to be displayed higher on the list.   

• Swiggy Access -

An entirely new idea based on the cloud kitchen concept, Swiggy came up with its Swiggy Access facility. It provides ready-to-use kitchen spaces to its restaurant partners in those areas where they don’t operate.

With the aim of bringing food nearer to its customers, Swiggy enables restaurants to set up their kitchens in new locations and let the food delivered to them at the fastest speed.

Expecting around 25% of revenues in 2 years, Swiggy expands its cloud kitchen model to include 30 restaurants onboard with 36 kitchens to four new cities.   

• Swiggy Super -

Swiggy has launched a membership program called ‘Swiggy Super’ for customers. This program offers unlimited free delivery on all orders above ?99. After subscribing to this program, customers don’t have to pay surge pricing during excessive demands.

• Swiggy Go-

Another revenue stream for Swiggy is a concierge service Swiggy Go that was launched in 2019 to offer instant pick & drop service.

UX features of each app

• Zomato:- Forces you to switch on location first. The good thing: You never get your order delivered to the wrong location. But for them to take such a measure, there must have been PLENTY of data to back it. I would love to see how many times customers sent delivery boys scampering to a different location. The data must be pretty incredible to validate this. LOL. ?? Oh, and the bad thing: It’s annoying AF. It’s super irritating and is a battery drain. But that begs the question: How many manually turn off their location? I do, because of the drain on my battery. Sigh…
• Swiggy:- You can dive right in and place an order, but the blue screen stands out and warns you to select your location first.
• Zomato:- Auto-detects location. Check. Basic. For some reason the images didn’t load. And no, the internet was just fine. Must have been an off day. Three buttons on the bottom. Feels simple. There’s A LOT of clutter and colour. I used to hate this, but it is what it is. Swiggy used toere’s a fine line to be drawn here to gauge what works and what doesn’t. It should ideally be a mix of the two — something I used to see in Swiggy earlier.