Swiggy to expand its cloud kitchen model to more cities over 2 years

INDIA – Food delivery firm Swiggy is looking to make significant investment in its cloud kitchen business by expanding to upto 40 cities over the next 2 years, ET Retail reports.

Swiggy has expanded the platform under Swiggy Access to include 30 restaurants with 36 kitchens in 4 new cities including Delhi, Mumbai, Kolkata and Hyderabad.

The cloud kitchen business, ‘The Bowl Company’ was launched in January last year in Bengaluru to offer lead generation, payment and delivery of orders for its partner restaurants.

For the next six to nine months, Swiggy is looking to bring on board over 300 restaurants and for its inter-city expansion, it will start with Bengaluru’s Vasudev Adiga’s which will launch operations in Delhi through the Access model.

The company believes the launch of cloud kitchen operations in tier II-III cities going forward will positively impact on the business order volumes.

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The aggressive expansion is part of a strategy to achieve a 20-25% revenue contribution from Swiggy Access alone in about 2 years.

About 8-25% of the overall order volume on Swiggy’s platform comes via Access kitchens.

“The large thing that we are trying to do is galvanise supply in a supply starved industry.

So we are looking to rapidly expand that supply through our Access model.

We aren’t looking at just expansion within cities but also inter-city expansion for national brands.

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A few sizeable national brands will help with the rapid expansion of the overall model,” said Vishal Bhatia, chief executive of New Supply and Access business leader at Swiggy.

“In the areas where Access will be operational I expect that 20-25% of our order value to come from that in the next 2 years.

As we expand wider, that number should get closer to reality on the overall platform as well.”

Swiggy has partnered restaurant brands such as Paradise Biryani, Krispy Kreme, Vasudev Adigas, Truffles and Leon Grill on the Access platform.

Swiggy reaches almost 20 million orders each month and its cloud kitchen operations under Access and its private brands under The Bowl Company and Homely, together form under 15% of the overall order volume, according to ET Retail.

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