In an attempt to consolidate the premium food-delivery category, Bengaluru-based foodtech giant Swiggy has decided to shut Scootsy’s website and app as Swiggy would merge the latter with its main app.
Swiggy acquired Scootsy in an all cash deal for an estimated INR 50 crore (USD 6.6 million) in 2018. Post-acquisition, Swiggy let the Mumbai-based startup continue to operate independently by its co-founders Sandeep Das and Rishi Khiani.
As part of the integration process, all Scootsy customers would be redirected to the Swiggy platform by the end of this month. It’s not clear whether Swiggy would retain Scootsy’s employees and delivery fleet. “All these finer details would be clear once we finish the integration process by the end of this month,” a Swiggy spokesperson told KrASIA.
Five-year-old Scootsy is a hyperlocal delivery platform that curates premium restaurants, bakeries, high-end grocery chains, and gifting services to cater to customers who are willing to shell out a little more for gourmet food. Swiggy aims to acquire these high paying customers as it’s seeing an increase in demand in this category. The integration with Scootsy will help Swiggy increase its average order value as it looks to grow the share of high ticket size orders.
Recently, Naspers- and Meituan-backed Swiggy has upped its game by onboarding hotel groups such as ITC Hotels, Marriott, Hyatt, KA Hospitality, and others on its platform for users to order food from restaurants operated by these hotel chains.
“We intend to further elevate our premium selection and category experience for consumers on Swiggy. To expand our footprint to all discerning customers across Mumbai, we will be transitioning the services offered by Scootsy to Swiggy’s platforms in the near future. This will be the first major milestone in setting up the premium category for Swiggy,” the company spokesperson said in a statement.
A 2019 report values the gourmet food market in India at USD 1.3 billion, which it said was growing at a compound annual growth rate (CAGR) of 20%. Online ordering of curated and gourmet dishes is a niche market which is yet to become of a significant size.
Moreover, food and beverage industry is staring at a huge loss as a large number of restaurants, leaving a few, remained shut during the 70-day long lockdown India had placed to contain the spread of novel coronavirus. In May, the National Restaurant Association of India (NRAI) had predicted four out of 10 restaurants would permanently shut down.
Online food delivery behemoths are not untouched by this as both Swiggy and Zomato laid off a significant chunk of their employees. While Zomato let go of 13% of its total workforce, Swiggy fired 1,100 employees and shut down non-performing business arms.
“A large number of restaurants have already shut down permanently, and we know that this is just the tip of the iceberg. I expect the number of restaurants to shrink by 25-40% over the next 6-12 months,” Deepinder Goyal, founder and CEO of Zomato had said in a blog post.