Exclusive: Swiggy moves away from grocery and fresh produce marketplace

Swiggy has pulled the plug from grocery, fruits, vegetables and other essential deliveries in about 100 cities. The service was bundled with Swiggy Stores and started from Gurugram two years ago. The move signals a departure from a marketplace to the dark store model. Swiggy would continue to operate dark stores under the brand name Instamart.

According to an email sent by Swiggy to users, grocery and the fresh farm produce services will no longer be listed on its native app. Team Entrackr has also found that hyperlocal stores selling grocery and fresh produce are no longer listed on its app. Interestingly, even Zomato has been scaling down its grocery offering Zomato Market since June.

While Swiggy Stores is no longer operational, users can still order grocery and other items through Swiggy Genie. Users can also send packages and documents from one point to another via Swiggy Genie. 

“We expanded our services across the country during the lockdown as consumers turned to Swiggy not just for food but also other essentials. Given that movement restrictions have been eased, we are rolling back grocery delivery and focusing on offerings like Swiggy Genie,” said Swiggy’s spokesperson in a response to Entrackr’s queries.

According to the spokesperson, specialized stores such as meat, seafood, pet care and gourmet will continue to function. 

In April 2020, Swiggy rolled out dark stores under the brand name Urban Kirana which later rebranded to Instamart. According to Entrackr sources, the company would be ramping up the dark store model as it offers a good margin as compared to marketplace one. Dark stores also enable faster deliveries. 

Swiggy claims to deliver most of Instamart’s orders in less than 40 minutes in Bengaluru and Gurgaon. It’s worth noting that its dark stores are only operational in these two cities.

The withdrawal of these verticals from the native app has come at a time when the e-grocery segment has turned hyper-competitive. Reliance’s Jio Mart has dethroned BigBasket to become the largest e-grocer in India within a few months of its launch. Jio Mart clocks over 700K orders daily while BigBasket and Grofers processes over 120K and 150K orders a day.

The e-grocery space may see the entry of Tata as a group is in talks to acquire a majority stake in BigBasket. Grofers and Zomato were also in merger talks, but the talks didn’t move beyond the preliminary stage.