Industry News

Online Food Aggregator, Swiggy, Sets Up Cloud Kitchen in Bengaluru

India: Increasing internet users, rising disposable income, growing middle class population has propelled the Bengaluru based company, Swiggy to diversify its business. Swiggy has collaborated with famous restaurants in Bengaluru to offer the food items from its cloud kitchen model. The company will facilitate lead generation, payment and delivery of orders for its partner restaurants.

Initially, the company plans to test its cloud kitchen model, in limited areas, to test the feasibility of the project and has plans to extend the facility in other areas as well. The company has been consistently making strategic changes to facilitate the customers. Last year, it revised the convenience fee on orders of less than a minimum value. For timely delivery of orders, the company has partnered with last-mile delivery company, Shadowfax.

Techsci Research depicts that the company’s move to foray into kitchen model will help it to increase its customer base as well as revenue. This would help the restaurants to offer food in areas, where they do not have a physical presence. Furthermore, it will also help the company to create a basket of options to meet the increasing customer demand. In addition to this, it will also enable the company to compete with key players like Zomato, Foodpanda etc.

According to a recently published report by TechSci Research, “India Foodtech Market By Operation Type (Food Aggregators & Restaurant Based), By Source of Order (Web Vs Mobile App), By Payment Method (Cash on Delivery, Mobile Wallet, etc.), Competition Forecast and Opportunities, 2011 – 2021 the foodtech market in India is projected to grow at a CAGR of over 12% during 2016 - 2021. Over the last couple of years, the country’s foodtech market has been witnessing huge fund inflows from domestic as well as foreign investors. On the basis of operation type, the market has been segmented into two categories, namely, food aggregators and restaurant based. Among these categories, restaurant based segment dominated the overall market in 2015, and the segment is anticipated to maintain its dominance over the next five years as well, owing to consumer loyalty and frequent cashbacks/discounts offered by the companies. In 2015, Cash on Delivery was the most preferred mode of payment among Indian consumers. Moreover, web based source of ordering dominated the India foodtech market in 2015 as it offers seamless customer experience in terms of ease of ordering, choosing alternate payment options and order tracking.