Swiggy and Zomato eye new frontiers in diversification
As food delivery giants expand into new services, Swiggy and Zomato introduce innovative offerings to capture broader markets and outpace competition.
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In a strategic shift to broaden their offerings beyond food and grocery delivery, industry heavyweights Swiggy and Zomato are exploring new ventures that could reshape their business models, according to a report in The Economic Times.
Swiggy, based in Bengaluru and set to list on the stock exchange on November 13, is preparing to pilot a new services marketplace named 'Yello.' The platform will host various professionals, including lawyers, therapists, fitness trainers, astrologers, and dietitians. Swiggy is still deliberating whether to incorporate Yello into its man app or launch it as a separate entity, insiders reveal.
Additionally, Swiggy is testing a premium membership service, 'Rare Club', aimed at affluent customers. This service offers exclusive access to high-profile events like Formula 1 races, concerts, upscale art exhibitions, VIP hospitality, and priority bookings at luxury restaurants. The main Swiggy app currently integrates food delivery, quick commerce through Instamart, Dineout, and hyperlocal delivery service Swiggy Genie.
Meanwhile, Zomato is also exploring new paths to engage customers. The Gurgaon-based company is piloting a concierge-like food ordering service on WhatsApp, where human customer service agents will handle orders, moving away from its reliance on chatbots. This new approach could redefine Zomato's customer service experience, making it more personalized.
Both companies' diversification plans highlight the intensifying competition in the e-commerce space, where they face rivals like Flipkart, Amazon, and newer entrants such as Zepto in the quick-commerce sector.
Zomato, which acquired Paytm's events and ticketing business for Rs 2,048 crore, also plans to expand its platform for handymen services, competing with NCR-based Urban Company. Zomato's Blinkit, another diversification play, is expected to enhance its service offerings with home services like plumbing, electrical work, and carpentry.
The need for continuous innovation in these markets is underscored by analysts who believe that while Swiggy and Zomato's core businesses have stabilized, the rapid growth trajectory may eventually taper off, particularly as food and quick commerce delivery matures.
Zomato, valued at ₹2.2 lakh crore, closed at ₹249.10 on the BSE on November 8, while Swiggy’s IPO saw the firm valued at approximately ₹95,000 crore. Swiggy's diversification strategy contrasts with Zomato’s approach of creating distinct brands for its expanding portfolio, including its food delivery service and Instamart.
Both companies are no strangers to pivoting. Zomato, originally a restaurant listing service, now includes businesses like quick commerce platform Blinkit, B2B grocery delivery segment Hyperpure, and a budding “going-out” vertical, with plans to soon launch the standalone app ‘District’. Swiggy also introduced 'Bolt', a 10-minute food delivery service in October, following several adjustments in its strategy over recent years.
