Swiggy's food marketplace CEO declared zero-commission models "marketing gimmicks" after its latest earnings call. This position directly challenges competitors like Rapido Ownly, which launched with a zero-commission promise. Swiggy instead pivots to expand its market with the budget-focused Toing platform.
How We Got Here
Swiggy launched Toing in September 2023, aiming to attract budget-conscious users with meals starting at ₹49. This followed their exit from the micro-kitchen model 4-5 months prior, citing high costs and uncertain economics.
The Numbers
- Swiggy's CEO Rohit Kapoor stated their platform charges restaurants 18-30% commission, but does not charge for delivery.
- Kapoor noted "lower AOVs" (Average Order Values) on zero-commission platforms do not reflect actual operational costs.
- Toing targets students and early jobbers, as 70% of existing Swiggy users transact less than once a month due to affordability.
- Toing's monetisation will come from flat consumer fees, higher ad placements, and lower restaurant take rates.
What Happens Next
🇮🇳 Why This Matters for India
For students and early jobbers in non-metro cities like Lucknow or Jaipur, Toing's ₹49 meals offer a new entry point into online food delivery.
The Take
Swiggy is essentially creating a moat around the budget food delivery segment by managing supply-side economics tightly, rather than letting a zero-commission free-for-all emerge. The real play here is to counter ONDC's potential threat of unbundling by offering a controlled, affordable experience within their ecosystem.
Source:
MediaNama ↗