Swiggy plans to shut its premium food delivery services platform in Mumbai, Scootsy, and integrate the operations within the Swiggy app.
The move to combine the operations is expected to help Swiggy tap into Scootsy’s high-end customer and restaurant base, as it seeks to set up a premium category within the app at a time when retaining premium users is increasingly becoming the company’s top priority.
“By June-end, Swiggy will transition Scootsy’s partners, fleet and nudge consumers to its app and shut Scootsy,” one of the people said.
Swiggy had acquired Scootsy in 2018 for an estimated Rs 50 crore, but continued to let it operate as an independent entity. It aggregates dining options in Mumbai, catering to niche, premium, high-ticket-size food delivery, as well as high-end bakeries, stores and gifting services.
A Swiggy spokesperson confirmed the plan and said the services offered by Scootsy would be transitioned to Swiggy’s platforms in the near future. “This will be the first major milestone in setting up the premium category for Swiggy,” the spokesperson added.
In line with this, all Scootsy customers will be redirected to the Swiggy app, the company said.
The Covid-19 pandemic has forced many premium dine-in chains to open up for food delivery and at the same time also created a market for trusted brands which may be higher priced. Swiggy, on its part, has claimed a surge in demand for curated food choices from premium brands.
Over the past few months, Swiggy has partnered with ITC Hotels, Marriott, Hyatt, KA Hospitality among other premium joints to list on the platform.
Even though Scootsy only operates in Mumbai, Swiggy’s prioritisation for premium will be national. The company already lists a clutch of restaurants and hotel kitchens on its app under its premium dining tab.
Premium is one of the most profitable segments, and will become more critical in a post Covid-19 world.
ET had earlier reported that food delivery apps had seen their average order value surge by at least 65% as customers prioritise trusted brands that cater to the highest hygiene and safety standards, over discounts.
This transition, however, is likely to be challenging for the company to implement from a restaurant supply perspective given that premium restaurants have in the past shown resistance to listing on platforms like Swiggy and Zomato citing a “less-affluent” customer base.
“The customer base and price points we cater to are higher compared to the average Swiggy user,” said Gauri Devidayal, founder of The Table, in an earlier chat with ET. The average order value on Swiggy is closer to Rs 400, compared to Scootsy’s Rs1,000,
Scootsy has some built-in features and training for fleet management which Swiggy currently does not enable, restaurants told ET.
“For example, pre-ordering which is a big part of premium cuisine, and gifting a meal…Scootsy has these features inbuilt,” said Sameer Seth, founder, and CEO of Hunger Inc which operates the Bombay Canteen and O’Pedro chain told ET. While Swiggy currently doesn’t have these options, they are likely to be introduced on the platform in the future to maintain the consumer as well as restaurant experience.
But if these businesses want to tap a larger set of consumers, moving to list on Swiggy, which has a much larger consumer base would be the way forward. Hotels and chains are recognising this as well. For instance, ITC Hotels had tapped into the food takeaway model but later also listed on Swiggy for a pan-India partnership. “The association with Swiggy endeavors to reach a much larger customer base,” ITC said in a statement.
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