SUMMARY
Handpicked is an invite-only platform for now, which offers premium products either imported or locally made to customers
The products listed on Handpicked will only be delivered the next day, unlike its usual grocery delivery service Instamart
The launch of Handpicked comes as its net loss jumped 2.2X to INR 3,628.9 Cr in FY22 from INR 1,616.9 Cr in FY21
Food and grocery delivery major swiggy
has ventured into a second grocery business called Handpicked. The foodtech has currently launched a pilot in Bengaluru. For now, it is an invite-only platform that offers premium products which are either imported or locally made.
The products listed on Handpicked will only be delivered the next day, unlike its usual grocery delivery service Instamart which takes anywhere between ten and 50 minutes, depending on the city.
While we could not immediately access Handpicked, reports suggest that products such as Coca-Cola’s Cherry Cola, which is available in markets like the US, Kombucha made by local startups in Bengaluru and Methi Khakhra from Gujarat.
It is prudent to mention that Tata-backed BigBasket also has a similar section within its app which offers imported or locally made premium snacks, beverages and other products.
The platform’s launch comes after Swiggy has diversified its delivery services to include meat delivery in select cities in partnership with startups such as Licious.
The foodtech major has also launched Swiggy Minis across select cities, a platform that delivers niche products across categories such as snacks and beverages, personal care, electronics, bakery, home and decor, pet care and jewellery from startups and small businesses across the country.
A Swiggy spokesperson confirmed the development to Inc42.
“Swiggy Handpicked, an invite-only offering from Swiggy helps customers discover and purchase unique and interesting groceries ranging from global favourites to regional delights and local legends that are not easily accessible,” said the spokesperson for the foodtech unicorn, adding that Handpicked is currently under pilot with select users.
According to an ET report, the team working on Handpicked is different from the Instamart team and both businesses are independent of each other. However, the idea is to build a store which features products which are very hard to find in Indian stores.
Handpicked’s launch comes after Swiggy launched Minis and also bought Dineout in May to expand its offerings and diversify away from its core food delivery business. The foodtech unicorn bought the Times Internet-owned online dining service for a reported $200 Mn.
Swiggy also revamped its loyalty programme earlier this year, renaming it to Swiggy One and offering free food and grocery delivery services to subscribers.
The launch of the new grocery delivery service comes as its net loss jumped 2.2X to INR 3,628.9 Cr in FY22 from INR 1,616.9 Cr in FY21 as its expenses more than doubled. At the same time, the foodtech’s total revenue grew 2.2X to INR 6,119.8 Cr in FY22 from INR 2,675.9 Cr in FY21.
In FY22, the startup earned INR 3,444.4 Cr from the sale of services, which was an increase of 83% from INR 1,878.9 Cr in FY21. Of this, Swiggy earned INR 87.5 Cr by selling food, it got INR 2,035.6 Cr by selling traded goods through Instamart in FY22.
As such, the food delivery startup’s move to launch Handpicked looks rational, as groceries have been a better money-maker than food delivery.
This also implies Swiggy’s increased focus on the grocery delivery business as a method to differentiate from its biggest competitor, Zomato. According to a recent report by Jefferies, Zomato secured a 55% market share in the food delivery business, with Swiggy falling behind despite offering bigger discounts.
In terms of business models, both companies operate in similar verticals. Apart from the food delivery business, Zomato also has a restaurant discovery and online dining business, while Swiggy acquired Dineout to enter the space. The listed foodtech acquired Blinkit in June for $568 Mn to enter the grocery delivery business.
While a majority of Swiggy’s revenue in FY22 came from the grocery delivery business, for Zomato, Blinkit proved to be a downer. Blinkit recorded adjusted EBITDA losses of INR 259 Cr in Q2 FY23, compared to Zomato’s overall adjusted EBITDA loss of INR 60 Cr.
Both companies also laid off employees in 2022, with Swiggy laying off around 250 employees while Zomato fired over 100 employees in performance-related cuts.
