Swiggy to expand grocery delivery business with $700 million investment
Mumbai/IBNS: Swiggy will invest $700 million in its express grocery delivery business Instamart with the aim to strengthen its presence in a category that has shown immense growth since it was launched in the middle of the pandemic last year.
The Softbank-backed firm's decision to pump fresh money into the business comes at a time when the category is witnessing heightened competition where start-ups are promising delivery of essentials within an hour.
Some big players competing in the express delivery segment are -- Zomato-backed Grofers, Dunzo, Amazon, Flipkart, Zepto, Tata-owned BigBasket to Reliance-owned JioMart.
Swiggy said it is getting more than than 1 million orders per week and will start 15-minute deliveries to top cities by January 2022.
Initially launched in two cities -- Gurugram and Bengaluru in 2020, Instamart now serves customers in 18 cities.
"The growth and the large market size have taken us by surprise. The retention numbers are also looking incredibly good," Sriharsha Majety, founder and CEO of Swiggy, told Moneycontrol in an interview.
"With our food delivery business trending at a USD 3 billion annualised GMV run rate, and Instamart’s super-charged growth, we’re very excited about our convenience mission,” he said.
"The average monthly user spend has gone up by 50 percent," he said while speaking about food delivery business.
Without giving a timeline, Majety said it is likely that Swiggy's Instamart business will surpass its core food business.
The $700 million will be used to increase awareness, distribution and technology investments. While Swiggy currently has over 150 dark stores, it plans to add 100 more in the next three months.
Dark stores typically resemble conventional supermarkets, except that they are open to online orders only.
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