With over 1,000 kitchens in a year, Swiggy invests Rs 250 Cr to focus on cloud kitchens

Last month, Sriharsha Majety, Co-founder and CEO, Swiggy, addressing a packed audience on the sidelines of its first tech conference ‘Gigabytes’ at Bengaluru’s JW Marriott, said they will be focussing on increasing the supply by investing heavily in Swiggy Access.

As one of the biggest food delivery platforms in the country, Swiggy has completed over half a billion orders as of now. Currently operating in over 500 cities across India, it has on-boarded around 1,47,000 restaurants, and has over 2.1 lakh active delivery partners. Today, it contributes to 20 percent of its total deliveries in areas which have Swiggy Access.

The foodtech unicorn has already invested Rs 175 crore in Swiggy Access, and will be investing another Rs 75 crore into the business in the next few months. In a conversation with YourStory, Vishal Bhatia, CEO, New Supply, spoke about the future plans and growth of Swiggy Access.

Edited excerpts from the interview

YourStory: How has Swiggy Access evolved and grown since 2017?

Vishal Bhatia: In the first year, we were still figuring things out. But since then, we have expanded rapidly. Over a year ago, we had over 100 kitchens, and now we’ve built over 1,000 kitchens already.

We were extremely confident of the model because we took our time to scale, and that’s what the restaurant community values, which also sets us apart. This just isn’t about setting the infrastructure, but it is about partnering with restaurants, bringing in data analytics, helping them operate, building supply chain, and truly helping them scale. This has helped us become one of the largest cloud kitchen businesses in the country

Apart from this, we have also been able to expand geographically. When we started, we were in five cities, and we are now present in 14 cities. In the next four to five months we are looking at adding 12 more cities.

YS: What changes have been incorporated in Swiggy Access in the past year?

Vishal: We have improved a lot in the way we choose our locations. There is a lot of data on consumer demand, but as the data gets richer in the Swiggy ecosystem, our intelligence becomes better. And this will only keep getting better.

As Swiggy has expanded to more cities, there are more consumers across the country who are seeking convenience and great quality. And this is why we are now looking beyond the top cities. We have also seen partners in big cities expanding to smaller cities through Swiggy Access and succeeding there.

There are many partners who use our services to enter new cities, and we help them with hiring and supply chain. We also help them in understanding the dynamics of the newer markets. 

YS: How does technology help with something like Swiggy Access?

Vishal: At Swiggy, we use both tech and data science. One of the things that helped us is that we have spent a lot of time in understanding and analysing the demand in particular areas. Thus, we make sure the partners move to the right locations. We also do a lot of due diligence before setting up a Swiggy Access kitchen in a particular area.

The location is pinpointed purely basis hyper local demand. So, even if we move the kitchen location a few kilometres away, the entire demand profile shifts. Then we bring in the intelligence in choosing the right partners basis the kind of cuisines that will do well.

Once the partner is in the kitchen, we focus on just setting them up for operations. We also invest in IoTs that helps bring down the partner expenses like fuel and electricity consumption. As we move along, we will invest more to help partner operations.

YS: How has Swiggy Access grown over the years, and what are your future plans?

VB: Swiggy Access has best-in-industry partner retention rates. On an average, one in three partners on Swiggy Access expands to a second kitchen within 90 days of getting on the Access cloud kitchen model.

Swiggy Access is bringing in quality restaurants from across India to Tier-II cities, where consumers often have limited access to quality or a greater variety of food. This includes restaurants like Buhari and Kumarakom from Chennai to Coimbatore, Biryani Blues from Delhi to Chandigarh, and NIC Natural Ice Cream, which has expanded from Pune to Chandigarh and Jaipur.

Similarly, many restaurants from Tier-II cities have also expanded to Tier-I cities, giving them wider reach and brand recall.

(Edited by Megha Reddy)

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