Swiggy Ltd., one of India’s top quick commerce firms, plans to restrain spending and focus on profitability while deeper-pocketed rivals Flipkart and Amazon.com Inc. intensify efforts to shrink delivery times and expand discounts.
CEO Sriharsha Majety said he’s made a deliberate decision not to try and keep pace as Walmart Inc.’s local arm and billionaire Mukesh Ambani’s Reliance Retail Ltd. compete to deliver goods to more people in as fast as 10 minutes. The younger company is willing to sacrifice some users in the short run while retaining more lucrative, loyal customers, he told Bloomberg News in an interview.
Majety is pledging restraint even as India hosts one of the world’s most closely watched consumer-tech battles. Investors including SoftBank Group Corp., Temasek Holdings Pte. and Middle Eastern sovereign funds have poured billions into the sector, betting that dense cities, lower labor costs and ubiquitous digital payments can support a quick-delivery model that struggled in the US and Europe.
Swiggy’s Instamart unit currently operates more than 1,100 small warehouses in cities around the country that feed fleets of gig-workers delivering groceries, electronics and household items in minutes. The company, which also runs one of India’s top two meal delivery apps, added just seven stores in the March quarter.
“Investors are giving us the feedback that we remain unconvinced till you show that clear bridge,” to growth and profitability at Instamart, Majety said this week, referring to its popular quick-commerce business. “Joining the spending only postpones the problem.”
