Professor R Srinivasan’s case on Swiggy, Foodora and Yelp elaborates how the food-tech market is evolving in countries such as India, Germany and the United States, and elucidates how each of these hyperlocal platforms are adopting different strategies to sustain their business. 

The case on Swiggy, Foodora and Yelp analyses the hyperlocal food delivery business models popular in their respective markets. These multi-sided platform firms bring together local businesses such as restaurants and salons with their patrons through assistance in service discovery and delivery. This case elaborates how the food-tech market is evolving in countries such as India, Germany and the United States, and elucidates how each of these hyperlocal platforms are adopting different strategies to sustain their business. 

Although all the three businesses look similar at the outset, there are significant differences in their business models and the strategic choices they made. 

Swiggy 

Swiggy is built as a delivery platform that brings together hungry patrons and restaurants to increase convenience and choice for those looking for a good meal. Swiggy invested heavily into expanding its footprint across cities in India, while diversifying into other adjacent markets such as milk and grocery delivery, cloud kitchens and white labels. Through cloud kitchens, Swiggy partners with the restaurants that want to expand operations. Swiggy experiments with its own white label restaurants, but risks challenging the restaurants using its platform services. The question we discuss includes “would restaurants flee to other less threatening platforms such as Zomato or would the lock-in and the inherent advantages provided weigh in Swiggy’s favour?” 

Foodora

Foodora in Europe is part of a major food-tech firm called Delivery Hero and is able to leverage scale advantages when it came to rationalization of investments in assets. Aggressive acquisition of food-tech firms in the region has helped Delivery Hero to consolidate fast and reduce competitive threats. Foodora’s revenue stream is powered both by commissions from restaurants and through delivery fees paid by patrons. Contrary to Swiggy (that hires delivery persons), Foodora uses independent riders for its delivery services, typically within short distances (around a 2km radius).

Yelp

Yelp has also moved away from hiring delivery staff to cater to its food delivery business. In order to focus on its role as the information aggregator in the hyperlocal space, Yelp exited the food delivery vertical and sold its subsidiary EAT24 to GrubHub which was the then leader in this space. With an arrangement with GrubHub to fulfil orders coming through Yelp portal, the partnership had helped both firms expand footprint in their core areas of expertise. Yelp therefore, helps patrons discover highly-rated local businesses, and with its GrubHub partnership enables delivery. 

Tech & its impact

We aver that the emergence of digital multi-sided platforms is largely facilitated through increasing penetration of smartphones and Internet. These platforms have not just digitized existing interactions, but made possible new ones as compared to offline models. In this case, we compare and contrast three “hyperlocal” platforms, with its own unique business models, suiting their specific contexts. Each of the platforms have ensured value delivery across the food-tech ecosystem – patrons, restaurants/ local business owners, staff and delivery Personnel.

When used as an introduction to multi-sided platforms, this case can help the student understand the nuances in the differences across various hyperlocal business models; the challenges faced and how these platforms address the same.