Quick commerce not ‘a winner-takes-all’ market: Swiggy CEO Sriharsha Majety
Majety said Swiggy is preparing to open around 1,500 new dark stores in the next four quarters as it scales to meet the increasing demand across various markets.
Majety said Swiggy will continue to open new stores as existing ones mature, tailoring Instamart’s growth strategy to meet demand within specific product categories. This approach, he explained, allows Swiggy to address diverse consumer needs more effectively across the regions it operates.
CFO Rahul Bothra said that increasing the size of these dark stores has allowed Swiggy to offer a greater selection of products, while reducing average delivery times from 16.9 minutes to 12.6 minutes.
Majety noted that setting up a new dark store takes approximately three months from planning to operation. He sees a significant market potential for quick commerce, projecting a total addressable market (TAM) between $30 billion and $50 billion by 2028, and emphasized that this is not a “winner-takes-all” industry.
Operating in over 30 cities, Swiggy continues to adapt its quick commerce offerings to each location’s unique needs. In larger cities, convenience may be the main driver, while in smaller cities, Swiggy is broadening its product selection to meet diverse customer needs.
CFO Bothra said that quick commerce has already reached 40% of Swiggy’s food delivery business and is growing faster, with the potential to eventually surpass food delivery in scale.
The SoftBank-backed company on Wednesday (October 30) announced the price band for its IPO that opens for subscription on November 6, 2024.
Swiggy has fixed the price band between ₹371 to ₹390 per equity share. Investors can bid for a minimum of 38 shares in one lot and then in multiples of 38 thereof.
At the upper end of the price band, the company intends to raise ₹11,327.43 crore, which includes a fresh issue of ₹4,499 crore, while existing shareholders will sell up to 17.5 crore shares.
Under the OFS, investors participating include Accel India IV, Apoletto Asia, Alpha Wave Ventures, Coatue PE Asia XI, DST EuroAsia V, Elevation Capital V, Inspired Elite Investments, MIH India Food Holdings, Norwest Venture Partners, Tencent Cloud Europe, among others.
Swiggy will have a post-listing market capitalisation of ₹87,299 crore at the upper end of the price band.
The company will use ₹1,343.5 crore out of net fresh issue proceeds for investment in its subsidiary Scootsy, and ₹703 crore for investment in technology and cloud infrastructure. Furthermore, ₹1,115 crore will be spent on brand marketing and business promotion expenses, with the remainder allocated for inorganic growth and general corporate purposes.
