Nearly four years after shutting down Daily, a homestyle food service, Swiggy has restarted the service in select areas, Moneycontrol has learnt. Introduced first in 2019, Swiggy shut down Daily after demand dipped during Covid-induced lockdowns.
Since Swiggy Daily was primarily used by office-goers, the company had pulled the plug on the service as a majority of its user base was working from home during the lockdown. But now, as most people have returned to working from the office for several days a week, the startup wants to revive the offering and tap into the market currently dominated by Zomato Everyday.
Zomato Everyday was first piloted in select areas of Gurugram in February last year. Since then, the service has expanded to multiple cities across locations, underscoring that demand for affordable, homestyle food still exists. Both Swiggy and Zomato offer meals between Rs 89 and 150 under this category.
For IPO-bound Swiggy, currently on a clean up spree and consolidating several divisions into one, reviving an old offering is a rare move. However, unlike the first iteration, Swiggy Daily is now integrated into the main app.
“Swiggy has matured more as a company since 2020, in terms of supply chain, cost efficiencies and thinks Daily is a promising category to be present in – the conviction is high. It is targeting people living as paying guests (PGs), hostels and regular office goers through Daily,” a person aware of the developments told Moneycontrol.
Swiggy did not respond to Moneycontrol's queries.
The homestyle food market is largely unregulated with dabbawallas and small caterers meeting demand. Swiggy, which takes credit in first starting the service back in 2019, now hopes to pull customers away from Zomato.
Through Daily, Swiggy wants newer customers come on to the app and try its services. It anticipates that these customers will stick to the platform and continue transacting across categories after that, which will push up its market share.
Swiggy, which is hoping to make a public market debut later this year, needs to increase its base of users. Swiggy currently has a total of 14-16 million users as opposed to Zomato’s 18.6 million monthly transacting users, analysts at Bernstein said in a client note last month.
The report pegged Swiggy’s food gross merchandise value (GMV) at $1.4 billion lagging Zomato’s $1.7 billion as of 1HCY23.
Road to Dalal Street
Swiggy filed its draft IPO papers with the Securities and Exchange Board of India (SEBI) last month, as first reported by Moneycontrol. The company plans to raise up to Rs 3,750 crore (around $450 million) through a fresh issue and up to Rs 6,664 crore (around $800 million) as an offer-for-sale (OFS) component, as reported earlier.
In the run up to the IPO, Swiggy recorded a $207 million loss in the nine months to December 2023. That loss was on a revenue of $1.02 billion during the same period, compared with fiscal year 2022-23 revenue of $1.05 billion.
Swiggy saw its revenue rise 45 percent to Rs 8,625 crore in FY23, while its net loss widened to Rs 4,179 crore, according to the company's annual filings. In FY22, the hyperlocal commerce unicorn had registered a revenue of Rs 5,705 crore and a net loss of Rs 3,629 crore.
For comparison, arch-rival Zomato's revenue had risen 66 percent to Rs 7,761 crore in FY23, while net loss narrowed to Rs 971 crore.
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