Swiggy winds down Snacc as the economics of quick food delivery remain elusive

Food delivery and quick commerce major Swiggy on Thursday shut down its quick food delivery app, Snacc, as profitability and economics in the segment remained elusive.

The app, on opening, shows an error message of "Oops! We are down right now and not accepting orders."

Launched in January of last year, Snacc offered quick meals, beverages, and an impulse-driven assortment of fresh items delivered within 10-30 minutes. The service initially included branded products from The Whole Truth and Blue Tokai that were later phased out.

Snacc operated out of hyperlocal cloud kitchens and was active across Bengaluru and certain pockets in Gurugram.

Swiggy will wind down its Snacc cloud kitchens and offer its kitchen staff roles inside Instamart pods. The company will absorb the corporate team into other functions inside Swiggy.

Meanwhile, Swiggy's 10-minute food delivery experiment, Bolt, as well as Toing, which offers affordable food delivery options from select restaurants, are active on the platform.

The development was first reported by Moneycontrol, citing an internal email shared with employees.

"While the product market fit was emerging, the broader economics made it challenging to scale. We want to concentrate all our energies on innovation that drives stronger long-term potential. In line with this, we have taken this decision,” stated the email, sent on February 19, as reported by Moneycontrol.

Swiggy declined to comment on queries shared by YourStory.

Earlier in November, Zepto Cafe had undertaken a similar move by halting operations at 200 stores amid slow demand. The IPO-bound player had redeployed its workforce inside its dark stores. Before that, Eternal shut down Zomato Quick and Zomato Everyday, citing an unclear path to profitability that would not compromise on customer experience. The segment has also seen the graves of Ola Dash, among others.

However, Eternal has been steadily ramping up Bistro by Blinkit, now available in 45 kitchens across Delhi-NCR and Bengaluru. In its latest earnings report, Eternal said the business is seeing early signs of product-market fit, reflected in healthy throughput per outlet.

According to company executives, the segment is showing signs of profitability, especially given that the AOVs are much lower here than what we see in the food delivery business.

"I think there's a cuisine gap in the market, which I think Bistro fills. And that is also why we don't see this business cannibalising the Zomato business wherever we have these stores," added Goyal, outlining the company's plans of continued investments in the business, although at a cautious pace.

Other players in this space include Accel-backed Swish, which has ramped up its operations across pin codes in Bengaluru. According to a latest report by Economic Times, Swish is in talks to raise another $30-35 million (about Rs 272-317 crore) from Bain Capital Ventures, in a round that values the two-year-old startup at about $100-120 million.