Swiggy Case Study

Instructions for the Reader

You’re reading the journal, compiled from public sources, of Swiggy’s first Product Manager, reflecting on how things were in 2015, just as the company was about to launch. Notice that Swiggy is serving two very different customers simultaneously, pay attention to what each side needs.

Your task is to put yourself in their shoes and reconstruct the product strategy at the time of launch using the Lean Canvas framework.

Create two Lean Canvases:

One for the user onboarding side of the business
One for the restaurant onboarding side of the business

As you read, observe how early decisions were made, how value was delivered early on with limited resources, and how Swiggy approached building a two-sided marketplace from scratch.

As you read, ask yourself:

Who is the most important customer to get right first, and why?
What trade-offs would I have made differently?
What assumptions would I test first?
Where would I double down, and where would I stay lean?

Swiggy: The Origin Story

In 2013 two founders, Sriharsha Majety and Nandan Reddy designed an e-commerce website called “Bundl” to facilitate courier service and ship goods within India. Bundl was quickly paused, and they moved into the food delivery market.

At the time, the food delivery sector was in turmoil as several notable startups, such as Foodpanda (later acquired by Ola Cabs), TinyOwl (later acquired by Zomato), and Ola Cafe (later closed) were struggling. Majety and Reddy approached Rahul Jaimini, formerly with Myntra, and founded Swiggy in 2014.

Sriharsha claims that Swiggy was founded to get food from the best restaurants in a neighbourhood delivered to the customer’s doorstep.

The market trend in 2014 was to focus on the app and not on the supply chain. All the major companies were focused on making a cool app rather than doing the difficult work of building a supply chain. Food delivery success requires getting many things right, and Swiggy nailed one of the hardest: logistics.

What differentiated Swiggy from the rest of online delivery channels at the time was their investment in building a proper logistics network with a fleet of their own delivery executives. This ensured that Swiggy provided customers with timely deliveries and real-time tracking of their order status.

Because of their own fleet, Swiggy did not have a minimum order policy on any restaurant and accepted online payments for all restaurants that they worked with. Reliable and fast deliveries were ensured as the delivery Swiggy executive only carried one order at a time.

Swiggy competitors such as Zomato, Foodpanda and Tinyowl built marketplaces that connected customers to restaurants but “outsourced” delivery to either restaurants or third-party logistics providers. Eventually, competitors also began to build their own delivery networks, mirroring Swiggy’s strategy.

It began operations in Bengaluru’s startup hub Koramangala, with six delivery executives and 25 handpicked restaurants on its platform. The focus was on popular, local restaurants that could appeal to both students and young working professionals in the area.

The users had limited time to cook or eat out, especially during work hours. This demographic valued the convenience of fast, reliable food delivery that fit their schedules. They were motivated by convenience and ease of use. Swiggy’s platform offered a quick way to browse multiple food options and order meals, all from a single app, addressing their preference for an efficient dining solution.

Some of the first few restaurants to partner with Swiggy

Truffles – Burgers and continental fare; a hit with students and young professionals
Hole in the Wall – Popular breakfast café in Koramangala
Chinita – Mexican cuisine for adventurous, cosmopolitan eaters
Gramin – Affordable vegetarian fare for health-conscious diners
Tandoor Hut – Comforting North Indian and tandoori dishes
Anand Sweets – Trusted brand for snacks and Indian sweets
Tadka Singh – Punjabi food with bold flavours, ideal for solo and family orders
Via Milano – Italian cuisine targeting urban, premium customers
Lucknow Street – Mughlai and biryani options for spice-seeking regulars
Bangaliana – Authentic Bengali food for those missing home

These early partnerships were critical for Swiggy as they demonstrated trust in the brand at a time when food delivery was still an emerging concept in India.

Taphan’s Reflections

Bangaliana in Koramangala was one of the first few restaurant partners to get on board. A restaurant that has quietly been cooking up authentic Bengali food since 2002.

Taphan, the current owner of Bangaliana, for the first 10 years, the restaurant saw good footfall, with dine-in being very popular. But things started to change. “Earlier we recorded around 3,000-3,500 customers every month. But by 2014, the headcount dropped by 10-20 percent. However, that was just about the time Swiggy started operations and we signed up quickly,” Taphan says.

According to their records, Swiggy started bringing in 50-100 orders daily and that number continued to grow.

Things were so different in 2014. Back then there was no restaurant app for Swiggy. We would receive orders through SMSes on our mobile phones. We would simultaneously maintain a record of the orders in books,” he laughs as he reminisces.

Speaking about how Swiggy enabled them to grow, Taphan says. “Area-wise our restaurants are very small. We only cover an area of 600-800 square feet, which meant we could only cater to about 100 customers per day. When we joined Swiggy, that number doubled. We also gained visibility and people who never heard of us started ordering. Before Swiggy only 20,000 people knew us, but post 2014, an additional 30,000 people recognised the restaurant. From 2016-2020, we served around 1000 customers on a daily basis, across our branches.”

But that wasn’t all. The team at Swiggy stepped in to help Taphan with better packaging and shared insights about the kinds of customers they receive and what they preferred. “Swiggy also helped increase our delivery range to 12 km. Through this we were able to deliver more from a single outlet, which cut down costs. Previously the delivery range was only 3 km” Taphan adds.

When Taphan took over, the restaurant had limited serving options. “We never had combos. Even a single person could only order a full portion of dal and rice and that didn’t always work well. One account manager advised us to introduce INR 80-100 meals – that saw a rise in orders. Swiggy also helped us design our combos. With these changes in place, we started receiving many more orders,” says Taphan, whose restaurant went from 20 food items on the menu to over 122 today.

The Business Model

Partner restaurants pay 15-25% on every order it generated and delivered through Swiggy.

Swiggy also charges an amount of INR 20 - 40 to the customers for delivering the order. The charges also depend upon the high order demands or unusual weather conditions.

The Swiggy delivery executives could be full-time or freelancers who wished to work and earn some extra money. For the first 4 km, Swiggy pays delivery executives INR 4 per km. It then pays INR 6 per km after they have travelled 4 km. Besides, they are paid an additional INR 20 in unseasonal weather like rainy days. Also, Incentives are given on the basis of productive performance.

Once the business picked up, Swiggy also started allowing restaurants to promote themselves:

It allows the brand to show their banner ads on the website and app for their promotions.
In mobile application, Swiggy allows restaurants to show the listing of restaurants at ‘top places’ in return for some investment from their side.

November 2024 – From 25 Restaurants to an IPO

The road between launch and IPO included funding rounds, expansion wars, a pandemic, and multiple pivots. The logistics-first bet proved durable, though it didn't stay unique for long. Zomato, once a pure marketplace, eventually built its own delivery network, turning Swiggy's key differentiator into the industry standard.

From its humble origins, Swiggy's $1.4 billion initial public offering was oversubscribed on Friday Nov 8th2024, as institutional investors rushed in with orders on the final day of India's second-largest share sale this year.

The IPO received bids for more than three times the shares on offer at the end of the last day of bids. The portion reserved for institutional investors was subscribed six times, while the shares earmarked for retail investors were 114% subscribed.