Online food delivery giant Swiggy continues to diversify its offerings. After venturing into grocery and package delivery through Instamart and Genie, the Bengaluru-based company is now planning to explore a new vertical: social commerce.
According to three of Entrackr’s sources, Swiggy is planning to launch Swiggy Bazaar — a social commerce business in a couple of months.
“Swiggy Bazaar will be focused on grocery, FMCG and fresh farm produce,” said one of the sources, requesting anonymity as plans are yet to be public. “The company is likely to bring a group-buying element and leverage the reseller model in Swiggy Bazaar.”
Swiggy’s entry into social commerce is coming at a time when the space has been witnessing a lot of activity. Meesho is ramping up grocery focused separate play through Farmiso whereas Flipkart had launched Shopsy and recently claimed to have amassed 250K sellers and 5.1 million users within 100 days of its launch.
One of the early players in group-buying, DealShare is in the middle of raising a new round at a valuation of over $1 billion. Entrackr had exclusively reported the potential deal in August.
“Swiggy has also been hiring aggressively for the new business. The initial team of 10-15 people is already in place and is in the process to hire over 25-30 more,” said the second source who also wished not to be named.
According to sources, the company plans to invest over $15-20 million in the social commerce business in the first phase. “Besides grocery, Swiggy Bazaar may explore segments such as lifestyle and fashion in the long haul,” said the above-quoted source. “Swiggy Bazaar will be launched as a pilot in a few cities including Bengaluru and Gurugram.”
Queries sent to Swiggy didn’t elicit any immediate response. We will update the story as and when they respond.
Swiggy’s foray into social commerce is perhaps its first first major expansion effort in the past two years for the SoftBank-backed company. The move also marks its entry into non-logistics which is Swiggy’s core business. But this also aligns with how Chinese food delivery giant Meituan— an investor in Swiggy — is trying out new verticals. In 2020, Meituan tested out a ‘group buying’ feature for food in a bid to look at new avenues for growth.
With Swiggy’s launch of Swiggy Bazaar, it will directly compete with the likes of DealShare, CityMall and Farmiso. Grocery delivery firm Grofers had also tried the group-buying model in late 2018 and it was said to have contributed 30% of the revenue during FY19. But the vertical didn’t work and Grofers dropped the group-buying initiative just before the end of FY20.