Food-delivery Firm Swiggy Shuts Cloud Kitchen Brand In Delhi, NCR

Swiggy has closed its cloud kitchen brand, The Bowl Company, in Delhi and cities forming the national capital region (NCR) as the food-delivery firm tackles losses, said sources.

A spokesperson for Bengaluru-based Swiggy said the expansion of The Bowl Company in the Delhi region was an experiment. "This experiment has led to its due learnings, even as we focus on operational excellence for the brand. We will continue to invest and grow The Bowl Company in cities like Bangalore, Chennai, and Hyderabad where the brand is well-loved and growing," said the spokesperson, using the previous name of Karnataka’s capital.

Swiggy also runs the brands Breakfast Express and Homely.

Swiggy in January raised $700 million in Invesco-led new funding that doubled the company’s valuation to $10.7 billion. Prosus, an investor in that round, recently said that Swiggy and PayU, an Indian digital payments company, have recorded strong growth this year.

Prosus said Swiggy’s core restaurant food delivery business grew GMV (gross merchandise value) by 40 per cent, while its quick commerce GMV increased 15x during the first six months of the year. “Our share of Swiggy’s revenue grew 118 per cent to $150 million,” said Prosus.

Prosus said Swiggy’s core food-delivery business clocked order growth and gross merchandise value (GMV) growth of 38 per cent and 40 per cent, respectively, for the first six months of the calendar year 2022.

Swiggy’s quick-commerce business, Instamart, saw order and GMV growth of 20 times and 15 times, respectively. Prosus said restaurant food delivery GMV was $1.3 billion, while quick commerce GMV was $257 million for the first six months of the year.

“Our share of Swiggy’s revenue grew faster at 72 per cent to $150 million, reflecting higher average order values and increased revenue from delivery fees and advertising sales,” said Prosus in a presentation.

However, according to a note by global brokerage firm Jefferies, Swiggy’s losses during the first half of the year are at over $315 million. This was much higher compared to approximately $50 million in losses for Zomato on a standalone basis, and nearly $170 million, inclusive of losses at the quick commerce unit Blinkit.

Zomato had an average market share of 55 per cent in the food-delivery segment during the period, It reported a GMV of $1.6 billion, compared to a GMV of $1.3 billion for Swiggy.

“This appears to be the highest market share for Zomato in our view, and is despite aggression from Swiggy, which has been offering higher discounts and continuing with its flagship 'Swiggy One’,” Jefferies said.

In May 2020, Swiggy said it is laying off 1,100 employees.