Swiggy on Tuesday made a surprise announcement that clearly marked company’s future aggressive strategy for growth. The Bengaluru headquartered company said that it will now soon start delivering home essential products to consumers. These home essential products would mainly include groceries, vegetables, baby care items and medicines.
This will mark Swiggy’s first ever attempt to go beyond its core business of online food delivery. The company said that it has already started building supply chain process by bringing on board all vendors on the board.
This new service called ‘Swiggy Stores’ may go live on company’s official app in few weeks. However, it is still not clear whether the foodtech major will start the new service on trial or full-fledged basis.
With the launch of new service, the company will be directly pitted against BigBasket and Grofers.
Why is Swiggy swaying to new growth avenues
Swiggy’s decision to sway into new growth avenues may be triggered by concern about impending consolidation phase in the foodtech sector. Consolidation phase in the foodtech sector in long run is a likely possibility in the wake of cut throat competition.
Swiggy not only has to face heat from Zomato but also from FoodPanda and UberEats. The fact that deep pocketed ride-hailing companies own FoodPanda and UberEats has only increased the pressure on Zomato and Swiggy.
It also worth noting that Zomato’s main rival is currently in a buoyant mood on back of recent $1 bn funding. This was the largest funding round in company’s four year history. Not only it capitulated the company into the unicorn club but also lend a financial muscle to compete with all the incumbent players.
Now it seems that the newly crowned unicorn company will use much of that financial muscle to find and enter new growth avenues.