Swiggy: Aggressive Advertising and Promotional Strategies Impacting Profitability?
| Case Code: MKTG479 Case Length: 12 Pages Period: - Pub Date: 2025 Teaching Note: Available |
Price: Rs.300 Organization : Industry : Foodservice Countries : India Themes: Advertising & Promotion, Digital Marketing, Social Advertising,Technology in Marketing |
Abstract Case Intro 1 Case Intro 2 Excerpts
Excerpts
The Growth Story
By 2019, Swiggy was clocking around 1.4 million orders per day, expanding its delivery team with 45,000 agents, partnering with 130,000 plus restaurants, and having a presence in 325 plus cities across India. It operated in more than 500 cities and had over 16 million users by December 2023. Analysts felt that it would not be easy for the founders to win over restaurants that had already tied up with other food delivery apps like Zomato. However, Swiggy managed to gain the trust of these restaurants and slowly built its network. Further, developing a mobile application helped Swiggy serve its customers within 30 to 40 minutes. Its tie up with various online payment modes like PhonePe , Google Pay , and even Sodexo cards enhanced its customer experience. See Exhibit II for Swiggy’s revenue generation model..
Swiggy’s Promotional Strategies
In 2018, Swiggy made a significant move toward mass media advertising by launching its first television campaign, conceptualized by Lowe Lintas Bengaluru. The campaign emphasized functional benefits, such as convenience and quick delivery, while also aiming to connect emotionally with viewers. The advertisements incorporated humor and relatable everyday situations, such as unplanned guests, last-minute party needs, or cooking mishaps, portrayed in a light-hearted manner. Analysts opined that these storylines had been crafted to provoke a sense of relief and satisfaction, positioning Swiggy as a reliable solution for urban households. The campaign later extended across outdoor and digital platforms, reinforcing the company’s presence through an integrated marketing approach..
Competition
Swiggy had many competitors in the quick commerce and food delivery business including Zomato, Zepto, Amazon, Flipkart, Dunzo, and Porter. (See Exhibit V). Analysts opined that Zomato’s promotional strategies offered tough competition to Swiggy. Zomato used Meme marketing , creating memes and relating them to current events, and its social media presence was huge in number with 1.9 million followers on Facebook. Zomato’s advanced SEO strategy resulted in increased sales. It had a strong social media presence and it sent notifications and emails to its users. Zomato leveraged the power of micro-influencers with many followers, bloggers, etc., to reach its customers more effectively..
Increasing Promotional Expenses
Analysts opined that Swiggy employed an aggressive promotional strategy to establish and expand its market presence. The company’s promotional approach focused primarily on price-based incentives during its initial growth phase. First-order discounts, festive season offers, and subscription services like Swiggy Super and Swiggy One gave users compelling reasons to choose Swiggy over its rivals. Additionally, the company capitalized on influencer marketing, social media engagement, and creative campaigns such as humorous content, regional cultural tie-ins, and event-specific themes to boost visibility and brand recall..
The Road Ahead
Swiggy faced a challenge in continuing with high-spend promotional tactics as it posed a risk to long-term profitability; however, scaling back could lead to its losing customers to competitors. The company was shifting its focus toward more sustainable strategies, such as personalized offers based on user behavior, tiered loyalty programs, and bundling services across food, grocery (Instamart), and dine-out experiences. These efforts were intended to reduce dependency on price-based promotions and encourage value-driven engagement..
Exhibits
Exhibit I: Swiggy’s Important Service Launches
Exhibit II: Swiggy’s Revenue Generation Model
Exhibit III: Swiggy Operating Revenue in US$ Million
Exhibit IV: Timeline of Swiggy’s Promotional Campaigns
Exhibit V:
Key Promotional Strategies of Swiggy’s Competitors
Exhibit VI: The trend of Advertising and Sales Promotion expenses of Swiggy
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