Swiggy expects to have 100 million consumers use the platform 15 times a month in the future as it sees the food delivery business to be more profitable in the next decade, according to Chief Executive Officer Sriharsha Majety.
The food delivery business is at a meaningful scale today, Majety said on Monday at a press conference in Bengaluru ahead of Swiggy's initial public offering that opens on Wednesday. "With the category expected to grow at close to 20% CAGR (compound annual growth rate), we think that will continue in that zip code for a long, long time to come."
"Coupled with improvements in unit economics in the next few years and operating leverage thereafter, we think that that business is a beautiful compounding business over the next one to two decades," the CEO said.
The food delivery business will be very large on the user base expansion that will happen. While India is not China today, the largest player in China had 50 million consumers using food delivery apps. However, India's consumption story is also developing, which suggests that the business will also be larger and even more profitable, according to Majety.
We definitely think about a world where there are 100 million consumers using us like 15 times a month. It's like a rallying cry for us and a vision that we go after.Sriharsha Majety
Swiggy is also focused on scaling its quick commerce business as it sees there is a bigger total addressable market to cater to in the segment. Ahead of its IPO, Majety also said that the investors have been intrigued about the quick commerce opportunity.
"A lot of the questions came out of curiosity about quick commerce because it's not a set thing yet. I think it's going through hyper growth and there are multiple players," he said.
The questions have been around what the market structure is going to be, how many players are going to be in the space, how much selection will the categories eventually have and how a path to profitability can be found in this category, according to Majety.
Swiggy's IPO consists of a fresh issue of Rs 4,499 crore and an offer for sale of 17.5 crore shares. The issue is likely to be priced between Rs 371 and Rs 390 per share. At the upper end of the expected price band, the company is looking to raise Rs 11,327.4 crore from the issue.
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