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Launch · Commerce & Consumer Brands

Swiggy introduces new features to improve customer retention and unit economics

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Date
Company
Swiggy
What it does
food delivery and quick commerce platform
Kind
Launch
Stage
public
Based in
Bengaluru
Founded
2014
Sector
Commerce & Consumer Brands

What they do

Swiggy is introducing new features such as wallet-credit and targeted fee-waiver to improve customer retention and unit economics in its quick commerce business

What happened

The company is adjusting its strategy to focus on larger basket sizes and reduce dependence on low-average-order-value (AOV) users

Why it matters

Analysts suggest these changes indicate a shift in how Swiggy is approaching customer acquisition and retention in a competitive market

The details

  • Swiggy is introducing new features such as wallet-credit and targeted fee-waiver to improve customer retention and unit economics in its quick commerce business.
  • The new features allow users to convert delivery fees charged on orders below Rs 99 into wallet deposits redeemable on future purchases.
  • Swiggy has also introduced delivery fee waivers on orders containing products from its private label brand Noice and categories including fresh dairy and vegetables.
  • These changes suggest a shift in how the company is approaching customer acquisition and retention.
  • Swiggy had earlier focused on improving unit economics, larger basket sizes, and reducing dependence on low-AOV users.
  • The company's CFO, Rahul Bothra, mentioned that the company had consciously reduced exposure to low-AOV customers in the March-quarter earnings call.
  • Swiggy's Instamart CEO, Amitesh Jha, described the moderation in monthly transacting users (MTUs) as linked to the removal of infrequent users from the platform.
  • Operating metrics suggest that the strategy has also come with trade-offs, including a decline in ordering frequency across Swiggy's businesses.

The bigger picture

  • Swiggy is adjusting its strategy to focus on larger basket sizes and reduce dependence on low-AOV users.
  • The company's CFO mentioned that the company had consciously reduced exposure to low-AOV customers in the March-quarter earnings call.
  • Swiggy's Instamart CEO described the moderation in monthly transacting users (MTUs) as linked to the removal of infrequent users from the platform.
  • Operating metrics suggest that the strategy has also come with trade-offs, including a decline in ordering frequency across Swiggy's businesses.

About the business

  • Swiggy is a food delivery and quick commerce platform that operates in India.
  • The company offers delivery of food, groceries, and daily essentials through its Instamart service.
  • Swiggy's Instamart service has introduced new features such as wallet-credit and targeted fee-waiver to improve customer retention and unit economics.
  • The company's private label brand Noice offers a range of products including fresh dairy and vegetables.
  • Swiggy's services are available in multiple cities across India, with a focus on providing convenience and speed in delivery.

The deal

Type
other

Founders

  • Rahul Bothra, CFO
  • Amitesh Jha, CEO of Instamart

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