SWIGGY, FOODORA AND YELP
SCM
Assignment
Hyperlocal Platforms
Rashmimayuri Rao
Section A
Roll Number 038
Business Model Canvas
Key Partners
Key Activities
o Partnering
with
restaurants
and
retailers.
o Sustain expanding fleet
of delivery personnel.
o Provide
patron
analytics to restaurants.
Customer Relationships
o Provide
kitchen
backend facilities to
o Rating,
review
&
restaurants looking to
feedback system.
expand.
o 24/7 active customer
o Managing online and
support.
offline payments
o Social media.
o Providing
and
managing last mile
delivery
o Restaurants
o Groceries
o Delivery providers
o Financial firm
o Own private brands
Key Resources
Customer Segments
o Local retailers and
restaurants
o Delivery personnel.
o Spaces for Swiggy
Access
o Technology.
Customer
o Patron who do not wish to go out
to restaurants.
o Patrons who want to browse local
eateries and get food delivered.
o Patrons who want products
delivered from nearby shops.
Channels
Restaurants/ Retailers
o Restaurants not having on demand
food delivery service.
o Retailers not having delivery
service.
o Restaurants wanting to increase
customer base.
o Restaurants/ Retailers wanting to
gain brand equity.
o Website
o Mobile App
o Digital Marketing
Value Proposition
o Hyperlocal food ordering and delivering
solutions.
o Manual integration with restaurants.
o Multiple payment modes
o Quick delivery usually within 30 minutes.
o Provide owner app to restaurants providing
advanced analytics.
o Swiggy Access: Free backend kitchen facility.
o Swiggy Capital Assist program: Providing
collateral free loans to partner restaurants.
o Swiggy SUPER Paid Subscription program:
Free food delivery & dedicated patron care.
Cost Structure
Revenue Structure
o Cost of application & Website development
o Payroll expenses for employees
o Amount paid to delivery personnel for each delivery and for every hour they
engaged with the platform.
o Cost to access space for Swiggy Access.
o Maintenance and marketing costs
o 10-30% commission charged from partner restaurants
o Higher commission charged from Swiggy Access restaurants
o Subscription charges for Swiggy SUPER
o Delivery chargers
o Advertising
Swiggy: Network Effects
Network effect is caused by restaurants experiencing
FOMO (Fear Of Missing Out) and thus leading to a
ripple effect.
For example, if a restaurant is listed on Swiggy but
neighboring restaurants are not, positive network effect
will lead these other restaurants to get themselves
listed.
Swiggy is an online food ordering hyperlocal
platform.
Foodora offered a platform that connected
hungry patrons with restaurants.
Yelp helped connect people to local businesses
such as restaurants, shopping outlets, travel,
fitness, night life and others.
Owned its delivery fleet on cost structure.
Delivery personnel was paid for each delivery
and every hour they engaged with the platform.
It didn’t allow restaurants to deliver on their own.
Foodora has contract based delivery boys.
It also allowed freelancers to provide delivery
services.
Delivery personnel was paid flat rate per hour
plus tips.
It allowed restaurants to deliver the orders.
Derived commission from GrubHub for every
restaurant fulfilment order that originated from
Yelp.
Delivery done by restaurants, Yelp doesn’t
provide delivery services.
Revenue
It charged commission of 10-30% per order.
It has diversified its revenue stream from
commission to other options such as
subscriptions.
It charged a flat commission from restaurants of
30% on all orders.
In 2017, commissions constituted 73% of
revenues.
With a large advertiser base of 160,000,
advertising was it’s major revenue source.
Online food ordering constituted the largest
category of transactions by revenue & volume.
Replicable
Easily replicable business model.
Easily replicable business model.
Difficult to replicate business model.
Less resource intensive.
Resource
Less resource intensive.
Reviews & ratings are shared with restaurant
owners.
Yelp’s model requires customer participation to
write reviews.
Reviews and ratings are audited and used for
decision making.
Ensure loyalty
It provides partner restaurants with analytics,
backend kitchen and 0 interest loans.
Riders have smaller delivery zones of around 1
mile enabling quicker delivery within 35 minutes
of patron placing the order.
Provided an opportunity to businesses to
communicate with patrons.
Strengthens entry barrier by leveraging the vast
data it has garnered over time.
Business
Delivery
Sustainability of the Business Model
Yelp’s model requires consumer participation. Consumers write
reviews and it takes a lot of time to build review portfolio and
recommendations for listed services.
Market planning has to be at a granular and segment level.
Yelp is a hyperlocal platform and faces competition from bigger
platforms such as Google, Facebook and Amazon.
The USP of Yelp is that it is extremely hyperlocal and
competition such as Google may not be able to become this
hyperlocal.
Google and Amazon might face the challenge of diseconomies
of scale while becoming very hyperlocal.
The review and rating system of Yelp helps build loyalty factor
among patrons.