- Customer Retention and Acquisition: Swiggy’s success depends on keeping current customers and gaining new customers. These factors are crucial because a steady or growing customer base generates consistent revenue. Attracting new customers can be costly because it usually involves significant spending on advertising, promotions, and discounts, if it struggles to bring in and retain users without high expenses, its profitability could be affected. For a company in a competitive market having strong customer loyalty and efficient marketing are essential.
- Non-Exclusive Partnerships: Swiggy does not have exclusive agreements with its restaurant and merchant partners, so they are free to work with other food delivery platforms like Zomato, Uber Eats, or smaller local competitors. If Swiggy’s key partners decide to prioritize or even shift exclusively to competing platforms, it could impact It’s service quality.
- Regulatory Risks: Swiggy and other quick-commerce players have been accused of predatory pricing by the FMCG distributors’ association. Predatory pricing is a strategy where a company sets its prices extremely low, sometimes even below cost, to attract customers. The CCI is India’s regulatory authority that ensures fair competition across industries. If the CCI finds that Swiggy’s pricing practices are harming competition, it may intervene to protect smaller businesses and maintain a level playing field. It may be forced to limit its discounts and pricing strategies, which have been key to attracting customers in a competitive market.
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