When Uber eats entered the market, it managed to disrupt the food delivery competition between Zomato and Swiggy. With massive funding, the development team, and the Uber brand, Uber Eats started with a bang. Though later in 2019, it is acquired by Zomato, Swiggy has managed to surplus the number of orders on new years eve, 2020. There has been a massive contest for the top place between Swiggy and Zomato over the years. But for this exercise, I am considering a situation when the first news of the launching of Uber Eats came out. This has been an exciting case study. Hope you enjoy it equally.
Clarifying Questions
- Are we pointing to any specific sectors, like developing features on the app, user acquisition, user retention, improving revenue stream? No.
- What all information do we have about the new Uber App? We only have this much information. Let’s our imagination fly.
Swiggy Revenue Model
To my understanding, there are four income streams for Swiggy.
- Restuarant Listing on Swiggy app (Advertisement):
- Swiggy runs the biggest food delivery system in India. It has its presence in almost every corner of India. With the increasing demand for prepared/ ready-to-eat food, the Swiggy app has a huge potential customer footfall. Therefore, Swiggy charges restaurants that want to advertise their presence on the Swiggy feed.
- Delivery charges for prepared food and groceries (from end-consumer):
- Currently, Swiggy charges INR 29 for the first two kilometers and INR 15 for every additional kilometer.
- A profit cut from sold food(from restaurants)
- Single tier membership program for premier services like free delivery, occasional discount on the price
User Analysis
Every segment of people orders from Swiggy. For this case study, I am segregating users as
- Frequent users: Users who order at least twice a week. They have specific food preferences and don’t scroll through the feed. They just want their order on time.
- Regular users: Users who open the app frequently but order a maximum of twice a month. They are open to different types of food and scroll through the entire feed to compare price, delivery time, etc. They order regularly but are not loyal to any app.
- Potential users: Users who go through the app feed regularly but order once a month or less. They generally order for special occasions, like house parties. They are more into the discounted price.
- Irregular users: Users who used the app sometimes but did not order or open the app for a long time.
Competitive analysis between Swiggy and Uber
For this case study, I am considering Uber has not launched the app yet. So I am considering Uber, the cab service app as a reference.
| Advantages | Pain Points | |
| Uber | 1. Great brand image 2. Impressive UX principle 3. Massive potential userbase 4. Massive funding 5. Have other income streams, not entirely dependent on this service for revenue 6. Swiggy and other food delivery services have taught the Indian audiences how and why of ‘Online Food’. Uber, launching its app later doesn’t have to worry about educating the audience. | 1. No experience in the industry 2. Zero reach 3. |
| Swiggy | 1. Working in the same industry for a long time 2. Huge active userbase 3. Clean UX 4. Good brand image 5. Massive reach across the country in terms of the number of restaurants, cities, delivery agents, etc. | 1. Low funding compared to Uber 2. The Only source of revenue 3. Existing competition with Zomato |
Plan
Swiggy is the leading player in the food delivery environment in India. They are running their service for a couple of years now and are currently valued at over 3.5 billion US dollars. If a new player is entering the ground following will be my strategy.
- Fortify the frequent customers
- Returning users do the most purchases. So my primary plan will be to safeguard my frequent customers.
- Simplify the user flow to get the least number of steps to order something. Swiggy already has a ‘reorder’ option on the history page, which is very handy for frequent customers. It can also add this option to the feed. Some frequent customers might miss this feature because it’s not on the home page.
- The frequent customers should get the membership program at a discounted price. Set a target, for example, order 3 days a week for two weeks to get an entire month of free delivery.
- Convince more regular and potential customers
- These type of customers goes through the entire feed. Swiggy already has a variety of segregation for food items and restaurants like popular, by brands, by cuisine type, nearby restaurants. Some interactive ways to make them choose their food can be effective. For example, Food for your mode, a rating system where you input your mode, and Swiggy suggests some food and a restaurant. If you are angry, Swiggy can suggest ice cream from nearby Naturals. If you are bored, Swiggy can suggest something crunchy, like nachos or popcorn. This type of interaction can help users narrow down their search and increase the chances of purchasing.
- Marketing: Visually stimulating the regular and potential customers about their previous orders and interests can work. Google maps shares a yearly wrapup of all places a user has been and his contributions in a visual way. It is like a little walk into memory lane. Swiggy can also do the same, like a walk into taste lane.
- Hammer the pain points of Uber
- Uber is a cab service brand. It will jump with a huge development team and funding. To acquire new users in the food industry, Uber will give huge discounts. But it is not a sustainable business model. We just need our customer support uptight.
Execution and Monitoring
- Closely observe feedback and refund calls. Try to process the refund quickly and resolve the issue. Track the number of complaints and refunds. A happy and returning customer has the key to purchase.
- Select a group of frequent users and promote the reorder option. Monitor the clicks and the percentage growth of reorders.
- Try to convince the management of discounts to the frequent users.
- A/B testing for ‘Food for Your Mode’ section.
- Email marketing and monitor how much people are coming from these emails.
- Track exactly when they order and try to build a pattern.
Read more about how a Uber PM would plan to penetrate the cut-throat food delivery business in India.
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