Swiggy To Launch Co-Branded Credit Card With HDFC Bank

Foodtech giant Swiggy is reportedly set to board the co-branded credit card train, following the likes of Flipkart, Myntra and Paytm launching their offerings.

The food delivery platform will be partnering with HDFC Bank to offer the co-branded credit card, with Mastercard expected to be the network partner, according to sources cited in an ET report.

Swiggy is also said to be relying on flat discounts and special offers on its hyperlocal delivery services for users who use its credit card. The foodtech could also offer additional discounts on Dineout, Swiggy’s restaurant bill payment service.

Further, the co-branded card will become another revenue stream for Swiggy. While the foodtech said it is profitable in its food delivery business, it still is burning nearly $20 Mn on its Instamart business per month, per a recent TechCrunch report.

Interestingly enough, Swiggy is late to the credit card game, as Zomato has already shut down its co-branded credit card with RBL Bank this April. The listed foodtech giant had launched its credit card back in 2020.

Sources quoted by ET said that the foodtech is now looking to capitalise on the vacuum left by Zomato exiting the market. The sources added the company plans to launch the credit card in the next few weeks, adding that Swiggy has been working on its co-branded credit card partnership since early last year.

The other person quoted in the story said Swiggy had set up a sizable tech team for the banking integrations to launch the product fast.

While credit cards are a strong way of foraying into financial services, the Reserve Bank of India (RBI) has recently constrained the role of co-branding partners to just being a sourcing channel for banks, prohibiting any additional data sharing between the entities.

The foodtech’s move comes when it is moving pieces around the chessboard to arrive at the most profitable outcome. 

Earlier this year, Swiggy launched a new product, Maxx, which offers products across home and kitchen appliances, utensils, electronics, baby care products and clothing. The foodtech is now running a pilot in Bengaluru. Swiggy has also launched a vertical marketplace called Minis, which offers niche D2C brands and their products.

On the other end, it has also cut loose business verticals, including its gourmet grocery vertical, Handpicked, and sold its kitchen infra business, Access, to Kitchens@. Swiggy also laid off 380 employees earlier this year.

In a recent report, Motilal Oswal estimated a flat GMV growth for Swiggy in the second half of 2022 compared to H1 2022. The report estimated a total GMV of $2.6 Bn for Swiggy in 2022, resulting in Zomato edging Swiggy out in terms of market share.

As per estimates in the report, Zomato held a 56% market share with a GMV of $1.6 Bn in the second half of 2022, compared to $1.3 Bn for Swiggy.

Meanwhile, Swiggy has also seen multiple investors cut down its valuation, as the likes of Invesco and Baron Capital have marked its valuation down to $5.5 Bn and $6.5 Bn, respectively. The markdowns saw Swiggy’s valuation dip below Zomato’s, owing to the latter’s recent surge on the bourses.