Swiggy reported a total of ₹1594 Crores of delivery cost in FY19. This boils down to per order delivery cost of ₹36 at 60% activity level (similar numbers for Zomato). Therefore, if these food delivery startups manage to push up activity level to 100% (9-10 orders per delivery guy), they can bring down the cost to as low as ₹20 per order.
With delivery charges of ₹30+ the food giants will be able to achieve positive unit economics.
Side opposition would say: There are massive customer acquisition costs running behind these numbers (Swiggy – ₹18, Zomato – ₹37 per order)
Side proposition: It seems the opposition needs to go back to the drawing board, because let’s not forget about the usual 20-30% commission charged from restaurants on each order (approx. ₹85 per order)
*Drops mic*
This article is a part of the July'20 edition of our Startup Newsletter. Here's the complete publication:
