Swiggy Fights A Battle in Social Media to Save Its Reputation

Swiggy, an Indian food delivery startup, co-founded by three IIM and IIT graduates in 2015, began its operations from Koramangala locality in Bangalore with six delivery executives and 25 restaurants on its platform. Today, it has scaled up with over 6,000 delivery executives across NCR, Mumbai, Bengaluru, Hyderabad, Chennai, Kolkata and Pune.

On July 26, an anonymous post in in the social blogging site Tumblr titled “Swiggy, a House of Cards,” stated to be co-authored by four former and current employees from the sales team in Swiggy levelled serious allegations of cheating restaurant owners and customers, lying to investors, employees and the media and dissonance in senior management levels. Within hours, it went viral on the social media.

The company immediately issued a statement. It said, ‘The recent blog post from an anonymous source is targeted at maligning the reputation of Swiggy as an organisation. The article carries inaccurate facts regarding business and order numbers. It not only references employee departures from a year and a half back but also presents details on our partners out of context and with mischievous intent.

“Our intention is to boost the number of times a consumer can use Swiggy over the long term, hence we are always maniacally focussed about market creation a lot more than margin creation which seems to be the narrative here.

“Swiggy has grown over the last few years on the back of strong support from our restaurant partners, employees, delivery executives, consumers and investors. Our restaurant partners are at the heart of our success – our joint vision of providing a complete food ordering and delivery solution from the best neighbourhood restaurants inspire us.

“Our employees are the keepers of our soul – as a start-up organisation, we take pride in the culture of mutual respect and common purpose that has helped us grow thus far. We are committed to winning together with all our stakeholders who we have always engaged with, in complete transparency and integrity,” it added.

Later, Swiggy co-founder & CEO, S Sriharsha Majety. an IIM Calcutta & BITS Pilani alumnus refuted the allegations in the company’s official blog, The Munching Bag.

Saying that “at Swiggy we pride ourselves on integrity, honesty and excellence,” he dismissed the charges as “one that is falsified with completely incorrect data and details”.

Posting a graph on number of daily orders that went up from 42480 in June 2016 to 78417 in January 2017, he said the “actual numbers have been verified by external, neutral auditors (a part of the big four) as a part of our standard due diligence that is done before every fund raise.”

To charges of cheating the restaurant owners, he said, “We’ve partnered with restaurants from the start of our journey, and grown tremendously, mutually. Business commercials with restaurants are a part and parcel of the business. It is mutually agreed with gives and takes on both sides. There is no cheating, no deceit. We have fuelled the growth of many restaurants by exposing them to a large base of consumers on our platform – and many restaurants have grown because of us. We take pride in this.”

He also denied lying about market share or order numbers. “We do not lie about our market share or order numbers. We are the clear market leaders and we communicate the same to restaurants and partners to show them the benefits of partnering with us. Nobody will stay on the platform if they don’t see value in this partnership,” he said.

About raising the commission, he said the commissions are a function of the value the platform generates for the restaurant. “The reason we started low is because we wanted to first convince the restaurant partners about the amount of value we bring to the table before requesting for higher numbers.

Over time, since we’ve started, the value delivered to the partners has been clearly established lending to higher commissions. Also to clarify – Our revenue per order (the 30% that is being talked about) is a blend of 3 parts, the commission we get from the restaurants, delivery fee charged from the consumers and discretionary advertising revenues.

“All our commercial agreements are time bound (usually 6 months) post which if the restaurants see value and if there is a commission number that both parties mutually agree on, only then we sign an agreement. There is absolutely no violation of contractual obligations,” he added.

He denied having made any false promises to any of the employees. “Bonuses are paid fairly and transparently, as in any organisation with core values and processes intact. We have hired to support the strong growth we’ve seen. Our compensation structure is transparent, fair and consistent.

He also stated that the employees who left the organisation did so naturally, over a year and a half ago and not recently as stated in the Tumblr blog post.

On the conflict of interest in Swiggy launching its own kitchen in Koramangala, Bangalore’s tech hub, and intentionally routing all the users to order from Bowl Company , Swiggy’s own private label kitchen, Sriharsha said it was to fill the gaps “including poor supply of restaurants in some areas of the city, or use-cases, or occasions that aren’t getting solved in the near future by any of our partners.

“Our intention is to boost the number of times a consumer can use Swiggy over the long term, hence we are always maniacally focussed about market creation a lot more than margin creation which seems to be the narrative here. If we introduce brands that don’t boost repeats but just order numbers, we don’t believe there’s a case for that brand to exist … We don’t embark on any of these initiatives with a cannibalization approach,” he added.

Incidentally, Swiggy had won the top honours at The Economic Times Startup Awards 2017 in January. The company is also among the few in the food delivery business to survive amid a wipeout of companies like TinyOwl, Zupermeal, iTiffin, BiteClub, Zeppery, Rocket Internet’s Foodpanda, Dazo and Eatlo(Image Source:google.com)