On the lines of Meituan, Swiggy to start grocery and medicine delivery service soon

Swiggy
Image credit: Saurabh Singh/Entrackr

With the emergence of online commerce, delivery has been a fascinating business proposition for many. Though delivery-bound businesses mushroomed during the 2014-15 period, only a handful — Grofers and Swiggy, including a long timer Bigbasket and Zomato — survive.

Building delivery business involves a lot of operational challenges as it’s a manpower-intensive game. And, this is why food delivery companies such as Swiggy and Zomato didn’t dare to explore into grocery and vegetable delivery verticals.

However, with back to back sizeable rounds from Tencent and Meituan-Dianping, Swiggy has to accelerate its numbers (growth in the form of numbers of orders, repeat buyers, GMV etc.). To do so, the Bengaluru-based company is exploring a service called ‘Dash’ for delivering grocery and medicines.

The service, which is slated to begin in a couple of months, aims to leverage the free time of its 30,000 riders. Between 2 to 6 PM, riders are usually not caught up. Swiggy sees the potential of harnessing its fleet towards Dash.

The decision of delivering grocery comes after raising $100 million Series F round led by Tencent and Meituan-Dianping. Exploring grocery and medicine delivery seems to be inspired by Meituan-Dianping model in China.

The Chinese O2O player has started as food delivery service but over the years it diversified into several verticals, including grocery delivery, dishing out deals on salon, restaurants and other lifestyle categories such as movie ticketing.

For Meituan and its rival Ele.Me in China, food is their core business, but they have also integrated other services to diversify the delivery offerings. Sooner than the later, Zomato will also explore complimentary verticals akin to Alibaba-backed Ele.Me. Two months ago, Zomato scooped up $200 million funding round from the Jack Ma-led Alibaba Group.

While it’s not clear when ‘Dash’ will see the light of the day, it certainly raises concerns for Bigbasket, Grofers and medicine delivery companies including 1mg and Pharmeasy, among others.

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