Why Swiggy is building a Shopify for local brands

With its newest offering, Minis, the foodtech major wants to leverage its 25 million users to pitch online storefronts to small brands. But, while it may have solved for discovery, Swiggy still has a lot to fix on the logistics front.

Since 2019, Swiggy has been transitioning away from food delivery into convenience, with the launch of Genie and Instamart in 2020

But its newest venture, Minis—a zero-commission platform for small brands—is by far its most unique bet. For the first time, Swiggy will only act as a facilitator

It’s also promising brands access to a ~25 million user base. For Swiggy, the hope is that Minis will settle in markets beyond its dominance, open new revenue streams, and tie the ecosystem together

But, Swiggy has a few things to tackle with Minis before it can call it a winner. The biggest snag is cost-efficient logistics, among others

“The shopping experience on Instagram is broken,” says a Swiggy executive, explaining the motivation behind the foodtech company’s latest offering—an online storefront for brands called Minis.

Earlier this year, their team wanted to buy a farewell gift for a colleague—a beautifully crafted and unique piece of jewellery that had shown up in an Instagram advertisement. The ad link led to the brand’s website where they placed the order, paid a hefty delivery fee, and waited for the package to arrive in seven days.

But after multiple delays in shipping, and calls with a hard-to-reach customer service, they received the product a month late, long after the colleague had left.

Swiggy now wants to deliver a better experience for customers of such brands.

Piloted in May, Minis is selectively onboarding the likes of home chefs, craftspeople, undiscovered brands craftspeople, undiscovered brands The Hindu After Amazon, Swiggy working on a Shopify-like platform Read more , and social-media favourites, and has scaled to nearly ~6,000 brands, says another company executive. It’s currently operational in select pin codes in Bengaluru, Mumbai, and the national capital region (NCR).

Social-media platforms like Instagram have been the go-to for newly launched or young brands. It helps them rope in a young audience and keep them hooked. Once discovered, customisation requests or queries take place over chat or email, and the final transaction is done informally through links or on the brand’s website. These websites are usually designed using subscription-based commerce-enabling platforms like Shopify and Dukaan.

But there are seller-specific challenges, like gauging the authenticity of the product and brand, clarity on order-related details, complaint redressal mechanisms, refund, and returns policy. Overall, the experience tends to be highly sub-optimal, says the second executive.

Minis brings the opportunity to reduce the number of clicks and touchpoints in a transaction, and facilitate it within one application, they add.

“It’s a pan-India, category-agnostic platform for small, home businesses, and D2C brands selling anything from cheese to glass paintings, but with the ordering experience of Swiggy. We are solving all three legs of a transaction—discovery, payments, and logistics—with a seller-first approach.”

Swiggy executive

The brands available on Minis include Pee Safe, DailyObjects, Sleepy Owl Coffee, Welly, and Hammer Lifestyle, across categories like gourmet, pet care, and electronics, among others. It’s aiming to add more niche sellers and address their feedback as a priority, says the second executive.

For these brands, Swiggy offers the allure of a curated marketplace and access to a broad base of 20-25 million monthly active users, at zero cost.

AUTHOR

Aayush Agarwal

Aayush covers businesses that are primarily Internet for The Ken. In his previous stint at Goldman Sachs, he spent slightly more than a year analysing investment opportunities in the China Internet space. A science graduate, he completed his postgraduate from the Indian Institute of Management, Kozhikode. Write to him if, among other things, you wish to talk about e-businesses, journalism or just offbeat career choices.

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