Quick commerce success will require ongoing experimentation and adaptation: Swiggy’s Majety

Quick commerce success will require ongoing experimentation and adaptation, says IPO-bound Swiggy’s Sriharsha Majety

Swiggy Limited, which operates the eponymous food delivery and quick commerce service, will next week launch the second biggest initial public offering (IPO) of this year. In an interview with Moneycontrol, Sriharsha Majety, its managing director and group chief executive officer, and Rahul Bothra, the chief financial officer, spoke about the growth of quick commerce and how Swiggy is doubling down on this business, how it plans to catch up with its rival Zomato and how the company went about pricing its IPO.

Edited excerpts:

What is the reason for increasing the size of the primary issue of the IPO and where will that extra capital go into? 

Rahul Bothra: We increased it by 20 percent because we are allowed to do so by the regulator. A lot of that incremental capital will go in the quick commerce business for expansion of the dark store network.

Given the current market conditions, do you think you have priced the IPO attractively enough for investors, especially the retail segment?

Bothra: The fact is that we haven’t raised any new capital since our last round in 2022, approximately two and a half years ago, when shares were priced at Rs 357 each. Since then, there has been no new capital raising, so we didn’t go to market with a specific valuation target in mind. As we wrapped up our international and domestic marketing efforts, a recurring piece of feedback from investors was to 'leave money on the table'. In other words, they suggested pricing slightly below fair value to attract strong interest. We took this feedback into consideration.

Sriharsha Majety: Our focus is not on setting an ideal price point but on building long-term shareholder value. For us, the priority was to attract shareholders who share our long-term vision and will support us through the IPO and beyond. The final price reflects extensive discussions and feedback, aimed at bringing in these long-term shareholders.

Bothra: Additionally, as a consumer brand, we value strong retail participation. Our bankers advised us that pricing the IPO attractively would encourage broader retail involvement, aligning with our dual objective: to raise the right capital and foster a committed shareholder base

Has Swiggy been slower than other players in capitalising on the quick commerce opportunity?

Majety: If we step back and view the quick commerce journey over a span of six to seven years, we see it evolving from zero to potentially a $30-50-billion market. Focusing solely on short-term shifts, like one or two years, misses the bigger picture, as the landscape keeps changing. Our focus is on understanding how to better serve consumers and meet their evolving needs in the years ahead. This category is perhaps only 10 percent through its evolution, and as it matures, we'll see more experimentation, new business models, and innovative formats across selection, delivery times, and more. Our strength lies in the fact that this is just the beginning, and there's immense potential ahead in this market's evolution.

How confident are you of narrowing the gap with Zomato on food delivery and on quick commerce where the gap has widened significantly?

Majety: Winning in this space will come down to a combination of innovation and flawless execution, with the platform that does this best likely to see stronger customer growth in the coming years. We have a clear plan and are dedicated to delivering on it, while our innovation capabilities are operating at full speed. Over the past few quarters, we've launched several initiatives, particularly in food delivery, like our 10-minute delivery model, which opens up a whole new paradigm. In quick commerce, we're also exploring new categories, such as pharmacy. It’s clear that there’s no single silver bullet and that success will require ongoing experimentation and adaptation.

How is your 10-minute food delivery business Bolt doing?

Majety: The initial response has been very encouraging, with consumer adoption across multiple cuisine categories exceeding our expectations. Feedback from restaurant partners has also been highly positive. Similarly to how quick commerce evolved—where consumers initially enjoyed 30-minute delivery, then embraced the shift to 10 minutes—we’re seeing a growing demand for faster food options. While selection may differ between 30- and 10-minute options, the desire for speed is clear, and we’re fully committed to capturing this opportunity.

Will you look at increasing domestic shareholding on your cap table in the event that the government tightens foreign direct investment norms for quick commerce?

Bothra: Since we’re listing in India, we anticipate significant participation from domestic institutional investors and a growing base of retail shareholders, leading to an increase in domestic shareholding. We are fully compliant with all current regulations, and we operate transparently within the framework set by the country. We maintain open communication with regulators, highlighting the ecosystem benefits we bring as a platform, such as farm-gate sourcing, which reduces reliance on middlemen, and our farm-to-fork strategy that ensures delivery within 36 hours through an efficient supply chain and warehousing infrastructure.

Additionally, we’ve created thousands of jobs, including over 107,000 delivery partner roles within the past year. As a domestic, homegrown company, we are deeply committed to supporting local ecosystems.

The government also looks to us for how we can support kirana (neighbourhood store) networks. Last year, we acquired Link, an authorised distributor for FMCG companies, which has enhanced our presence across cities. Through this acquisition, we’re introducing a professional, technology-driven distribution model to kirana stores, enabling them to order online, access a broader assortment, enjoy higher fill rates and benefit from better pricing and promotions. By empowering kirana stores in this way, we’re helping them better serve their neighbourhoods, contributing to our growth and theirs alike.

You are doubling down on being an app that provides multiple services. So where do you see new opportunities going forward? What new services can we expect Swiggy to add?

Majety: We continue to drive innovation across new business lines. Recently, we launched Rare, an exclusive private members' club designed for a more selective audience than the broader mass-premium market that Swiggy serves. Rare caters to a range of needs through a concierge-style service that elevates convenience to new levels. This aligns perfectly with our mission to enhance the quality of life for urban consumers through unmatched convenience. Wherever we see an opportunity to excel within this mission, we’re ready to take it on—this has been our approach from the start.