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Hit by coronavirus, online aggregators create new revenue streams

The COVID-19 pandemic and its after effects have hit online aggregators hard, particularly those depending on hospitality segments such as hotels, restaurants and air travel.

Written by Pranav Mukul | New Delhi | Updated: May 31, 2020 8:17:44 am
swiggy, zomato, swiggy genie, ubereats, make my trip, indian express news Swiggy has launched Swiggy Genie, a service using which people pick up and drop off items such as lunchboxes, office documents and other business deliveries. (Image: PTI)

FROM USING an existing mobility infrastructure for intra-city logistics to leveraging clientele base of premium hotels to generate business by delivering food, the impact of COVID-19 and the subsequent lockdown on revenue streams, has forced consumer internet companies to think outside the box.

For instance, food-delivery platform Swiggy and ridesharing company Uber have started leveraging their two-wheeler fleets to offer services under Genie and Connect, respectively, to transport small items such as office documents, lunchboxes, etc within the city limits. Similarly, online travel agency Makemytrip announced it has partnered with premium hotel chains and independent properties in Delhi, Mumbai, Chennai and Bengaluru to deliver food.

In the early days of the country-wide lockdown, Swiggy and its rival Zomato, recognised the need for more players in the grocery delivery segment and launched services in this space. A similar pivot was seen with Domino’s Pizza partnering ITC to deliver essential goods.

The COVID-19 pandemic and its after effects have hit online aggregators hard, particularly those depending on hospitality segments such as hotels, restaurants and air travel. While domestic flights have resumed after two months with a truncated schedule — bringing respite to several stakeholders including cab aggregators, which record a major chunk of metro operations from airport rides — hotels and restaurants are still not fully open for business.

Read | Unlock 1: Malls, hotels, places of worship can reopen on June 8; bars, gyms still prohibited

“Many such online companies have long-term plans laid out for venturing out into new businesses to expand their revenue streams in the future. Much of what you are seeing right now is the acceleration of those plans. There is no doubt the pandemic has brought tailwinds for digital businesses and everyone would want to leverage that opportunity,” said an executive with a large digital services firm based in Mumbai.

In an e-mail to the company’s employees earlier this month, Zomato CEO Deepinder Goyal said he expected the number of restaurants to shrink by 25-40 per cent over the next 6-12 months. As of May 15, the company’s grocery delivery went live in 185 cities across India. Similarly, its rival Swiggy also expanded its grocery delivery operations and chalked out plans to invest more efforts in services that it deems will “continue to do well”. It has also reallocated the job roles for some of its employees to this effect.

“While this crisis has impacted our core business negatively, there is no doubt that we are now at an inflection point for the penetration of digital commerce and home delivery in India. This offers us opportunities to continue investing our efforts in grocery and other service offerings that we think will continue to do well. We are going to invest in these high-confidence efforts to focus not on surviving alone, but on growing along the way by adapting very quickly. To enable this, we have already re-aligned some team members from other businesses into these initiatives,” Swiggy CEO Sriharsha Majety said.

The company recently launched Swiggy Genie, a service using which people pick up and drop off items such as lunchboxes, office documents and other business deliveries. The model has been a raging success in several European countries and the US, where office documents are transported on a regular basis across the city. Experts believe this business model holds potential given a discernible shift towards work from home which will increase the demand for such intra-city delivery services.

Uber, which also offers two-wheeler ride services, has also started a similar offering under Uber Connect. “Uber Connect will be immediately available in nine cities, namely, Kolkata, Guwahati, Jaipur, Gurgaon, Delhi, Noida, Chennai, Hyderabad and Chandigarh so that residents of these cities can send and receive packages within the city, while maintaining social distancing … All packages should be transportable on a two wheeler vehicle, be under 5 kilograms in weight, securely sealed and not include prohibited items such as alcohol, recreational drugs, or dangerous and illegal items,” the firm said in an email to its customers.

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