Swiggy - Unparalleled Convenience

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 The story of Swiggy is well-known; it is an online food and grocery delivery company that has transformed the way we access meals and essentials. The turning point came in 2016 with the entry of Reliance Jio, offering the most affordable data plans in the world. Following Jio's launch, the rapid penetration of smartphones and the internet significantly accelerated Swiggy's growth.


The Indian online food delivery market continues to expand, driven by several factors:


1. Increased internet penetration.

2. Rising disposable incomes.

3. Changing lifestyles, with more people preferring to order food from outside.

4. Growing digitalization in tier-2 and tier-3 cities.


I predict that the total food delivery market could reach ₹3 lakh crore in the next decade, resulting in a duopoly in the industry. Under this scenario, Swiggy may capture approximately 40% of the market share, equating to a gross order value (GOV) of ₹1.2 lakh crore. With a take rate of up to 25%, this would yield a revenue of ₹30,000 crore, contributing to an EBIT margin of 30%, resulting in an EBIT of ₹9,000 crore.


Now, let's explore Swiggy's second venture: Quick Commerce (grocery delivery and essentials). This sector is heavily reliant on convenience. The growth of quick commerce has been fueled by an expanding middle class, improved logistics networks, and increased digital adoption.


I estimate that the Quick Commerce market could grow to ₹2 lakh crore in the next ten years, with Swiggy potentially attaining a 25% market share. This would lead to a gross order value of ₹50,000 crore, a take rate of 15%, and revenue reaching ₹7,500 crore. With an EBIT margin of 12%, this would result in an EBIT of ₹900 crore.


Additionally, there are other promising markets to consider, including:


- Hyperlocal delivery and services

- Cloud kitchens and virtual restaurants

- Drone and autonomous vehicle delivery

- Pharmaceuticals delivery

- Personalized meal services

- Subscription-based offerings

- E-commerce logistics

- Event ticketing

- International expansion


However, the path to success in these areas remains uncertain.


Data & Spreadsheets

1.Swiggy DCF Excel

If you want a guide through this spreadsheet, try this YouTube video that takes you through each input cell: Video Guide  

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