The online food delivery giant Swiggy is further diversifying its range. After entering grocery and parcel delivery via Instamart and Genie, the Bengaluru-based company is now planning to explore a new industry: social commerce.
After three of TrickypediaSources, Swiggy plans to launch Swiggy Bazaar – a social commerce company – in a few months.
“Swiggy Bazaar will focus on food, FMCG and fresh farm produce,” said one of the sources, calling for anonymity as the plans have yet to be released. “The company will likely bring in a group buying element and leverage the reseller model in Swiggy Bazaar.”
Swiggy’s entry into social commerce comes at a time when the space has seen a lot of activity. Meesho is expanding the separate game specializing in groceries through Farmiso, while Flipkart launched Shopsy and recently claimed to have 250,000 sellers and 5.1 million users within 100 days of its launch.
DealShare, one of the early group buyers, is in the midst of sourcing a new round valued at over $ 1 billion. Trickypedia would have exclusively reported the potential deal in August.
“Swiggy has also hired aggressively for the new business. The initial team of 10-15 people is already in place and is in the process of hiring over 25-30 more, ”said the second source, who also refused to be named.
According to sources, the company plans to invest over $ 15-20 million in the social commerce business in the first phase. “Aside from the grocery store, Swiggy Bazaar could explore segments like lifestyle and fashion in the long run,” said the source cited above. “Swiggy Bazaar is being launched as a pilot in a number of cities, including Bengaluru and Gurugram.”
Inquiries to Swiggy did not result in an immediate response. We will update the story as soon as they reply.
Swiggy’s foray into social commerce may be the first major expansion attempt in the past two years for the SoftBank-backed company. The move also marks the entry into non-logistics, Swiggy’s core business. But this also coincides with how the Chinese food supplier Meituan – an investor in Swiggy – is trying out new industries. In 2020, Meituan a “Group purchase” for food to open up new growth paths.
With the introduction of Swiggy Bazaar, Swiggy will compete directly with providers such as DealShare, CityMall and Farmiso. Grocery delivery service Grofers also tried the group purchase model at the end of 2018 and is said to have contributed 30% of sales in FY19. But the vertical didn’t work and Grofers stopped the group purchase initiative shortly before the end of FY20.