Swiggy's ipo aspirations and amazon's grocery delivery expansion in california

Explore the latest in food delivery: market growth trends, regional analysis, Swiggy's IPO plans, South Korea's delivery promotion scrutiny, Magicpin's commission model, Jahez's financial achievements, Access Group's acquisition of Paytronix, and Amazon's California expansion.

Episode Transcript

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Welcome back to The Food Delivery Daily!
I’m AI Michelle, here with today’s top stories,industry updates, and the latest news shaping
the food delivery landscape.
This is your Food Delivery Daily, brought toyou by MagicPod from PodcastAI.
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(00:21):
To learn more, click the link in the shownotes.
Now, let’s dive in.
First up...
The online food delivery market is on the brinkof substantial growth, according to a recent
report by DataM Intelligence.
The study forecasts that the market, whichreached 145.2 billion United States dollars in

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2022, is expected to nearly double, reaching291.4 billion United States dollars by 2031.
This growth represents a compound annual growthrate of 9.1 percent over the forecast period
from 2024 to 2031.
Online food delivery services haverevolutionized the way we order and enjoy

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meals.
With just a few clicks on websites or mobileapplications, customers can browse menus, place
orders, and make payments.
Many services even offer features like trackingorders in real-time and scheduling deliveries,
making dining convenient for our increasinglybusy lifestyles.

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Major players in the market, such as Just Eat,GrubHub, Delivery Hero, and Deliveroo, are
continuously evolving to enhance their serviceofferings.
Recent developments include partnerships andacquisitions aimed at expanding their reach and
improving customer experience.
For instance, in March 2022, Eat Takeaway.compartnered with McDonald's to boost its delivery

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capabilities, and in October 2021, UberTechnologies completed the acquisition of
Drizly to integrate their delivery services.
The report highlights that the market issegmented by delivery type, including
restaurant-to-consumer and platform-to-consumermodels, as well as by channel, such as websites
and mobile applications.

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Payment methods are also diverse, ranging fromcash on delivery to online payments, catering
to a wide array of customer preferences.
Regionally, the market is analyzed across sixmajor areas: North America, Latin America,
Europe, Asia Pacific, the Middle East, andAfrica.
Each region is expected to experiencesignificant growth, driven by technological

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advancements, new product launches, andinnovative service offerings.
The comprehensive report from DataMIntelligence provides a detailed analysis of
the competitive landscape, examining thestrategies of key players and emerging
startups.
It offers valuable insights into market trendsand potential challenges, helping businesses

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navigate the evolving online food deliveryecosystem.
In India, the quick delivery market is heatingup, and Swiggy's Chief Executive Officer,
Sriharsha Majety, is expressing optimism aboutthe country's unique potential for
transformation.
While acknowledging that "India is not Chinatoday," Majety firmly believes that India is on

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the cusp of a significant change in the fooddelivery sector.
He highlights the vast growth opportunity bypointing out that China's largest food delivery
application boasts 50 million active users, abenchmark that underscores the untapped
potential in India.
Majety notes that "India's consumption story isalso developing," which sets the stage for the

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food delivery market not only to expand butalso to become more profitable.
This is bolstered by a projected compoundannual growth rate of close to 20 percent in
the quick delivery category, a figure thatexcites both Majety and his team.
Addressing questions from United News of Indiaabout Swiggy's strategy amidst stiff

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competition, Majety shared his vision for thecompany in the quick delivery market over the
next few years.
He emphasized, "Coupled with improvements inunit economics in the next few years and
operating leverage thereafter, we think thatbusiness is a beautiful compounding business
over the next one to two decades." Thisoptimism reflects Swiggy's strategic focus on

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enhancing profitability while scalingoperations.
In line with its ambitious growth plans, Swiggyis also preparing for its initial public
offering.
This offering includes a fresh issue of 4,499crore Indian Rupees and an offer for sale of
17.5 crore shares, with the issue expected tobe priced between 371 and 390 Indian Rupees per

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share.
The company aims to raise 11,327.4 crore IndianRupees at the upper end of this price band.
Majety envisions a future where Swiggy couldengage "100 million consumers using us like 15
times a month," a target that reflects thecompany's commitment to expanding its user base

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and tapping into shifting consumer habits inIndia.
Despite facing tough competition from playerslike Zepto, Blinkit, and Tata's BigBasket,
Majety remains confident.
He remarked, "A lot of the questions came outof curiosity about quick commerce because it's
not a set thing yet," highlighting the dynamicand rapidly evolving nature of the industry.

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While India may not yet rival China's fooddelivery dominance, the opportunities for
growth are immense.
With a focus on improving operationalefficiency and scaling its user base, Swiggy is
well-positioned to lead the charge in realizingIndia's promising future in the quick delivery
market.
As the landscape continues to evolve, Swiggy'svision may very well become a reality,

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unlocking the full potential of India'sburgeoning consumption economy.
South Korea's Fair Trade Commission haslaunched an investigation into the marketing
tactics of popular food delivery platforms,focusing on claims of "free delivery." The
investigation comes in response to growingconcerns about pricing transparency in the
industry.

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The Korea Herald reported on Monday that theprobe aims to uncover whether these "free
delivery" promotions are genuinely cost-free orif the financial burden is being shifted onto
restaurant owners or consumers indirectly.
The investigation will scrutinize whether thedelivery platforms' "free" offers are financed
by other transaction parties, raising questionsabout fair practices within the food delivery

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sector.
Baedal Minjok, commonly known as Baemin andSouth Korea's largest food delivery service, is
a particular focus of this inquiry.
Documents previously disclosed byRepresentative Yoon Hang-hong of the ruling
People Power Party have highlighted Baemin's"free delivery" marketing on its mobile
application, drawing the attention of the FairTrade Commission.

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If the investigation reveals evidence ofmisleading practices or unfair costs imposed on
restaurant partners, Baemin could faceantitrust charges.
A Fair Trade Commission official stated thatwhile investigating the industry-wide use of
"free delivery," they are also reviewingwhether platform operators are pressuring
business partners to offer competitive termsthat may mirror those of their competitors.

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This aspect of the inquiry adds to existingconcerns about fairness and transparency within
the food delivery industry.
Reports indicate that when customers placeorders through these delivery applications, the
platforms often pay up to five thousand won,approximately three dollars and sixty cents,
per order to delivery agencies.

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Merchants typically cover around two thousandnine hundred won of this fee.
The revelation that restaurants might beshouldering much of the "free delivery" cost
has sparked debate about whether these costsare ultimately passed on to consumers through
higher prices.
The issue of "free delivery" gained significantattention during last month's annual

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parliamentary inspection, where RepresentativeYoon highlighted potential misleading claims by
Baemin.
"Baemin keeps claiming 'free delivery,' but itturns out the delivery fee is not free.
The merchants bear the cost, which in turnraises consumer prices," Yoon stated,
intensifying the call for greater transparencyin the industry.

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To address these issues, a committee ofrepresentatives from food delivery platforms
and the restaurant industry was established inJuly as part of a government-led initiative to
develop balanced practices for allstakeholders.
According to The Korea Herald, the committeehas convened multiple times to discuss these
challenges, with another meeting scheduled forlater Monday.

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In their most recent gathering, the committeeexplored options such as itemizing delivery and
service fees on receipts to enhance clarity forconsumers.
Magicpin, one of India's leading hyperlocaldelivery platforms, has made a strategic move
to boost its market presence by significantlyreducing the commission fees it charges
restaurants.

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The company announced a reduction of nearlyone-third in its commission, bringing it down
to just 5 Rupees per order for the remainder of2024.
This decision is seen as a bold step to enhanceMagicpin's competitive edge, especially as
rivals like Zomato and Swiggy have recentlyincreased their commissions to 10 Rupees per
delivery.

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By positioning its fees at half the level ofits competitors, Magicpin aims to attract more
restaurants to its platform and increase dailyorder volumes.
The initial results are promising, withMagicpin reporting a doubling of orders
year-over-year during the festive season inOctober.
The company completed over 500,000 fooddeliveries and currently processes a

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substantial 150,000 orders daily, thanks inpart to its expanding presence on the Open
Network for Digital Commerce (ONDC).
With the new lower pricing strategy and arobust growth trajectory, Magicpin is targeting
the addition of 100,000 more restaurants andcloud kitchens to its platform.

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The company has already made significantstrides, expanding its restaurant partner base
from 22,000 last year when it joined ONDC to70,000 currently.
To support this aggressive expansion, Magicpinhas allocated an investment of 100 crore Rupees
to deepen its penetration into thedecentralized ONDC network and the broader food

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delivery market.
Magicpin's decision to slash commissions andleverage open infrastructure is a calculated
gamble to outmaneuver larger rivals andestablish itself as the preferred choice for
restaurant partners.
The question remains whether this innovativepricing strategy will yield long-term success
in the fiercely competitive online fooddelivery sector.

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Only time will reveal the outcome of Magicpin'sdaring approach.
Jahez International Company for InformationSystem Technology has achieved a
record-breaking third quarter and nine-monthperformance in 2024, demonstrating robust
revenue growth, increased order volumes, andimproved operational efficiencies.

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The Group reported net revenue of 601.3 millionSaudi Riyals for the third quarter, marking a
33.1 percent increase year-over-year.
This surge was primarily driven by a 25.2percent rise in total orders, which brought the
nine-month total to a record 78 million orders.

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The number of active users also saw asignificant increase, reaching 4.2 million, up
from 3.3 million in the same period last year.
Jahez's gross merchandise value rose by 29.5percent year-over-year to 1.7 billion Saudi
Riyals in the third quarter, with non-SaudiArabian platforms experiencing a 4.1 times

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growth and Saudi Arabian platforms growing by21 percent.
The company's net income reached an all-timehigh of 79.7 million Saudi Riyals in the third
quarter, a remarkable 175.5 percent increasefrom the previous year.
This financial success was propelled byoptimized customer promotions, controlled

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marketing spending, and reduced delivery costs,which collectively enhanced overall
profitability.
The company's adjusted earnings beforeinterest, taxes, depreciation, and amortization
(EBITDA) for the third quarter was 90 millionSaudi Riyals, representing 15 percent of the
net revenue.

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This is more than double the 38 million SaudiRiyals reported in the third quarter of 2023.
For the nine months ending September 2024,adjusted EBITDA increased by 52 percent
year-over-year to 160.5 million Saudi Riyals,underscoring the strong performance in the core
business and reduced losses from non-SaudiArabian platforms.

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In Saudi Arabia, Jahez's platforms maintained aconsistent growth trajectory, with adjusted
EBITDA reaching 217.8 million Saudi Riyals inthe first nine months of 2024, marking a 31
percent increase year-over-year.
The delivery platforms in Saudi Arabia alsoachieved a 67 percent year-over-year increase

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in adjusted EBITDA in the third quarter,benefiting from scale and cost optimization
measures.
Meanwhile, the non-Saudi Arabian platforms sawtheir losses narrow by 64 percent
year-over-year, reflecting operationalefficiencies and revenue growth in Kuwait and
Bahrain.
However, the logistics segment experienced adecline in adjusted EBITDA by 39 percent

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year-over-year in the third quarter, impactedby strategic investments in expanding the fleet
and enhancing logistical capabilities.
Overall, Jahez's impressive performance in thethird quarter and nine-month period of 2024
highlights its successful strategies inexpanding market share and delivering
exceptional value across its diversifiedverticals.

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With a focus on user experience and leveragingcutting-edge technology, Jahez continues to
strengthen its leadership in the region,promising a bright future for its integrated
ecosystem of on-demand services.
Access Group, a United Kingdom-based businessmanagement software provider, has announced its
acquisition of Paytronix, a United States-basedcompany specializing in guest engagement

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solutions for restaurants and conveniencestores.
This strategic move is set to expand AccessGroup's global footprint and enhance its
service offerings by integrating Paytronix’sadvanced technology with its existing suite of
products.
Founded by Andrew Robbins in 2001, Paytronixhas built a strong reputation in the industry,

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operating in over fifty thousand locationsacross eighteen hundred brands.
The company's unified platform encompasses awide range of capabilities, including online
ordering, loyalty programs, omnichannelmessaging, mobile applications, gift cards,
marketplace management, and payment solutions.

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This comprehensive suite of services hasprocessed more than forty billion consumer
transactions, positioning Paytronix as a leaderin the field.
The acquisition is a significant milestone forboth companies, promising to deliver an
enhanced service that improves the overallguest experience.
Champa Magesh, Managing Director of AccessHospitality, expressed confidence in the

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partnership's potential to solidify AccessGroup's presence in the Americas and further
their strategy to offer a unified suite oftechnologies that elevate customer experiences
in hospitality and convenience storebusinesses.
Paytronix’s impressive portfolio ofpartnerships includes industry giants such as
Google, Apple Pay, Toast, Square, DoorDash, andUberEats, catering to a diverse range of

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clients from single operators to largemulti-unit enterprises, including well-known
brands like Panera Bread and Five Guys.
This acquisition not only extends AccessGroup's reach but also enhances its capability
to support a broader clientele withcutting-edge solutions.
Jeff Hindman, Chief Executive Officer ofPaytronix, expressed enthusiasm about the

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acquisition, stating, "The acquisition byAccess Group marks the beginning of another
stage in our growth.
I’m excited to say that from here we’re onlygoing to build upon the service and
capabilities that our clients know us for."
This acquisition follows Access Group'sstrategic purchase of QikServe in September

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2024, further strengthening its position in thedigital commerce landscape.
By continuously expanding its productofferings, Access Group is steadfast in its
commitment to providing top-tier technologysolutions across the hospitality industry, not
only in the United Kingdom and Europe but alsoin the Asia Pacific region.

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Amazon is expanding its grocery deliveryservice in Central and Northern California, now
offering same-day delivery from select FoodMaxxstores.
As of November 4, customers in Bakersfield,Hayward, Sacramento, San Jose, and Turlock can
place grocery orders online atAmazon.com/foodmaxx.

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To celebrate the launch, Amazon is providingPrime members with free delivery on their first
three orders of twenty dollars or more.
In addition, Amazon is broadening its existinggrocery delivery partnership with FoodMaxx's
sister banner, Save Mart, to include three morestores in Auburn, Bakersfield, and Chico.

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Similarly, its collaboration with LuckySupermarkets will now cover four additional
locations in Foster City, Hollister, Napa, andOakley.
Christian Seitel, Amazon’s head of UnitedStates grocery partnerships, expressed
excitement about the expansion, stating,“FoodMaxx shares in our goal to offer
tremendous price, selection, and convenience togrocery shoppers, so we’re thrilled to be able

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to provide fast delivery from Amazon toFoodMaxx customers throughout California.”
Prime members can also subscribe to a monthlyor annual grocery delivery service for
unlimited deliveries on orders over thirty-fivedollars across Amazon Fresh, Whole Foods
Market, and a variety of local and specialtyretailers.
Tamara Pattison, Chief Digital Officer at TheSave Mart Companies, highlighted the

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partnership's benefits, noting the access tofresh and local produce, meat, and seafood at
low prices.
This expansion is part of Amazon's broaderstrategy to enhance its grocery delivery
capabilities and reach.
As the second-ranking company on TheProgressive Grocer’s 2024 list of the top food
and consumables retailers in North America,Amazon continues to solidify its presence in

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the grocery industry through strategicpartnerships and service enhancements.
Meanwhile, Save Mart, based in Modesto,California, operates nearly two hundred Save
Mart, Lucky, and FoodMaxx stores acrossCalifornia and western Nevada.
The company ranks fifty-third on TheProgressive Grocer’s list, and its acquisition
by The Jim Pattison Group further strengthensits position in the market.