Swiggy Access | Swiggy’s Cloud Kitchen | Concept Of Cloud Kitchen In India
Cloud Kitchen is making its space in India as Food ordering and delivery service provider Swiggy started it in Banglore two years back.
Cloud Kitchen is not a new concept but pretty recent in India so let us see what it exactly is and why food delivery services are bending towards it.
It is a kitchen where a restaurant can cook meals for its online customers who need food delivered to their doorstep. Cloud Kitchen does not have a dining space where customers can dine in.
Benefits of cloud kitchen
1. A restaurant can have a virtual presence in the areas where it does not even have its own restaurant and can grow their business in that area.
2. Low rent as compared to commercial restaurant rest with dining space.
3. No infrastructure cost.
4. Flexibility in the menu. Changes can be made easily.
5. Faster service.
Swiggy is looking to expand its Cloud Kitchen model aggressively taking it to 40 cities over the next 2 years. Swiggy has termed it as Swiggy Access.
Swiggy has expanded to include 30 restaurants with 36 kitchens for cloud kitchen model in 4 new cities including Delhi, Mumbai, Kolkata, and Hyderabad.
Swiggy is significantly investing in this business and is looking to bring on board over 300 restaurants in the next 6-9 months itself. The aggressive expansion is in line with Swiggy’s aim to achieve a 20-25% revenue contribution from Swiggy Access alone in about 2 years.
Vishal Bhatia, CEO of New Supply at Swiggy who leads the Access business said “The large thing that we are trying to do is galvanize supply in a supply-starved industry. So we are looking to rapidly expand that supply through our Access model. We aren’t looking at just expansion within cities but also inter-city expansion for national brands. A few sizeable national brands will help with the rapid expansion of the overall model”.
The DST Global and Naspers backed firm is starting with Bengaluru’s Vasudev Adiga’s for its inter-city expansion of restaurants, which will launch operations in Delhi through the Access model.
Bhatia believes this inter-city model will be a game changer as Swiggy launches cloud kitchen operations in tier 2 and tier 3 cities going forward adding a fillip to the business’ current impact on order volumes.
Currently, about 8-25% of the overall order volume on Swiggy’s platform comes via Access kitchens in those areas, depending on the density of the restaurants in specific areas. Swiggy expects the contribution to the order value too will be similar going forward.
Bhatia added “In the areas where Access will be operational I expect that 20-25% of our order value to come from that in the next 2 years. As we expand wider, that number should get closer to reality on the overall platform as well,”.
The firm headquartered in Banglore which clocks almost 20 million orders each month has been able to churn anywhere between 20-50% higher orders for restaurants through this model.
For Swiggy, 15% of the overall order volume comes from its cloud kitchen operations under Access and its private brands under The Bowl Company and Homely, in the areas it is available right now.
While Swiggy has kept it a secret about commissions for the model, it is obvious that restaurants on Access have to pay higher commissions than the 16-19% that the platform charges for delivery only. For those restaurants that lead the bulk of order volume on the Access model, the commissions are lower.
Indian restaurant brands such as Paradise Biryani, Krispy Kreme as well as local Bengaluru brands such as Vasudev Adiga’s, Truffles and Leon Grill are some of the partners on Swiggy Access.
Whether it is Swiggy Access or other food delivery businesses, this model of business is on the rise so why not be a part of it. Check out our Swiggy Clone page to know more.
Read more “Swiggy Business model | How Swiggy makes money“.