Swiggy's Quick Commerce 'Hypergrowth' Could Build Into A Potentially $50-Billion Segment

Swiggy Ltd.'s quick commerce platform is under a hypergrowth phase and could see the category zoom to about $40-50 billion in the coming years, according to top executives.

The quick commerce platform had a good second quarter but it is "early days" for the category and we have seen 10% of what could be done in the next three to four years, according to Sriharsha Majety, managing director of Swiggy. The category will see heightened competition and the key is to constantly keep thinking about consumer needs, Majety said.

The Bangalore-headquartered delivery platform has been expanding city footprint and square footage in dark stores, he said. "It feels like we are getting started in quick commerce...It is a competitive category but growth is expected to be overall strong."

The overall second quarter has been a sum of many parts, according to Majety. The work done in the last one to two years has improved business fundaments and "this has freed up time for the management to focus on the growth and innovation agenda."

Swiggy's loss widened to Rs 626 crore in the second quarter of the current financial year versus a loss of Rs 611 crore in the last quarter. However, quick commerce grew 31% and supply-chain and distribution grew 14%.

Swiggy is guiding to an overall contribution margin that will break even on the quick commerce business in the third quarter of the next fiscal, he said. "The path may not be linear but (it is) imperative for us to be agile and responsive in an evolving landscape. It is the very beginning of a $30 to $50 billion category."

The market is evolving fast, market shares would remain dynamic with new players entering, said Rohit Kapoor, chief executive officer, Swiggy Food. However, he is "feeling good about the trajectory of the business". This is the early stages of what could be a $40 to $50 billion category, he said.