ITS 6012 | Case Submission

Swiggy, Foodora and Yelp

Hyperlocal Platforms

by

Siddharth Kashyap - 22F253

1) Describe the Swiggy Business Model, Enumerate the network effects

Swiggy Business Model

Swiggy is an Indian food delivery company that was founded in 2014. The company operates
in over 100 cities in India and has over 4 million active users. Swiggy's business model is
based on the following:

• Matching restaurants with customers: Swiggy connects restaurants with customers

who are looking to order food. The company uses a variety of factors to match
restaurants with customers, including the customer's location, the restaurant's
menu, and the customer's preferences.
• Taking orders and delivering food: Swiggy takes orders from customers and delivers
food from restaurants to customers. The company uses a fleet of delivery agents to
deliver food.
• Commissions & delivery fee: Swiggy charges commissions from restaurants for every
order that is placed through the platform. The commission rate varies depending on
the restaurant and the type of food that is ordered. Swiggy also charges the
customers delivery fee depending upon the distance from the restaurant to the
delivery location.

Network Effects

The network effects of Swiggy's business model are as follows:

• The more restaurants that are on the platform, the more customers will use the
platform. This is because customers will have more options to choose from when
they are looking to order food.
• The more customers that use the platform, the more restaurants will want to be on
the platform. This is because restaurants will want to reach a wider audience.
• The more orders that are placed through the platform, the more money Swiggy will
make. This is because Swiggy charges commissions from restaurants for every order
that is placed.

The network effects of Swiggy's business model are very strong. This means that as the
company grows, it will become more valuable to both restaurants and customers. This is
because the more restaurants that are on the platform, the more customers will use the
platform, and the more orders that will be placed. This will lead to more revenue for Swiggy,
which will allow the company to invest in growth and improve its services.

2. Compare and contrast the 3 Business Models of Swiggy, Foodora & Yelp.

Swiggy, Foodora, and Yelp are all companies that operate in the hyperlocal space. However,
their business models are quite different.
Swiggy is a food delivery company that connects restaurants with customers. The company
charges commissions from restaurants for every order that is placed through the platform.
Swiggy is a platform, which means that it does not own its own delivery fleet. Instead, the
company partners with local delivery agents to deliver food.

Foodora is also a food delivery company, but it operates in the integrated model. This means
that Foodora owns its own delivery fleet. Foodora charges commissions from restaurants for
every order that is placed through the platform, and it also charges delivery fees from
customers.

Yelp is a local business review platform. Yelp allows users to find and review local businesses,
including restaurants. Yelp makes money by charging businesses for advertising on its
platform.

Here is a table that summarizes the key differences between the three business models:

Feature Swiggy Foodora Yelp

Type of Food delivery Food delivery Local business review
business
Business Platform Integrated Platform
model
Revenue Commissions from Commissions from Advertising
model restaurants restaurants and delivery fees
from customers

The table shows that Swiggy and Foodora are both food delivery companies, but they have
different business models. Swiggy is a platform, while Foodora is an integrated company.
This means that Swiggy does not own its own delivery fleet, while Foodora does. Yelp is a
local business review platform, and its revenue model is based on advertising.

The different business models of these three companies reflect the different strategies that
they are using to compete in the hyperlocal space. Swiggy is focusing on being the leading
platform for food delivery, while Foodora is focusing on providing a more convenient and
seamless experience for customers. Yelp is focusing on providing businesses with a platform
to reach a wider audience.

Swiggy's business model is based on the network effects of its platform. The more
restaurants that are on the platform, the more customers will use the platform, and the
more money Swiggy will make. This is a very powerful business model, and it is one of the
reasons why Swiggy has been so successful.

Foodora's business model is more capital-intensive than Swiggy's, as the company owns its
own delivery fleet. This means that Foodora has higher upfront costs, but it also has the
potential to generate more revenue in the long run.

Yelp's business model is based on advertising. The company charges businesses for
advertising on its platform, and the more businesses that advertise on Yelp, the more money
Yelp will make. This is a relatively stable business model, but it is also more susceptible to
changes in the advertising market.

Overall, the business models of Swiggy, Foodora, and Yelp are all viable strategies for success
in the hyperlocal space.