Swiggy, a popular food delivery platform, is reportedly partnering with HDFC Bank to launch its own co-branded credit card. This move follows the footsteps of other major Indian e-commerce players. It presents an opportunity for Swiggy to tap into the market after Zomato discontinued its own credit card earlier this year. The upcoming Swiggy credit card is expected to provide attractive discounts and special offers on their services, ultimately becoming an additional source of revenue for the company.
In a surprising twist, the food-tech giant Swiggy is reportedly hopping on the co-branded credit card bandwagon, following in the footsteps of Flipkart, Myntra, and Paytm. According to sources, Swiggy is joining forces with HDFC Bank to introduce a co-branded credit card, with Mastercard expected to be the network partner.
What’s more, Swiggy plans to entice users of its credit card with flat discounts and special offers on its hyperlocal delivery services. Additionally, the food-tech company may provide extra discounts on Dineout, its restaurant bill payment service.
This move into credit cards not only diversifies Swiggy’s revenue streams but also allows the company to capitalize on the void left by Zomato, which recently shut down its co-branded credit card with RBL Bank. Swiggy aims to launch its credit card in the coming weeks, having dedicated a substantial-tech team to banking integrations for a swift product launch.
While credit cards offer a solid entry point into financial services, the Reserve Bank of India (RBI) has recently imposed restrictions on co-branding partners, limiting their role to being sourcing channels for banks and prohibiting additional data sharing between the entities.
Swiggy’s foray into credit cards comes at a time when the company is strategically rearranging its operations to maximize profitability. Earlier this year, Swiggy ventured into new territories with the launch of Maxx, a product offering home and kitchen appliances, electronics, baby care products, and clothing. Currently being piloted in Bengaluru, this expansion complements Swiggy’s vertical marketplace called Minis, which features niche direct-to-consumer brands and their products.
Conversely, Swiggy has also divested certain business verticals, such as its gourmet grocery segment Handpicked, and sold its kitchen infrastructure business, Access, to a cloud kitchen. The company has also downsized its workforce by laying off 380 employees earlier this year.
According to a recent report by Motilal Oswal, Swiggy is projected to experience stagnant gross merchandise value (GMV) growth in the second half of 2022 compared to the first half. The report estimates Swiggy’s total GMV for 2022 to be $2.6 billion, placing Zomato ahead in terms of market share.
The same report indicates that Zomato held a 56% market share with a GMV of $1.6 billion in the latter half of 2022, while Swiggy’s GMV stood at $1.3 billion.
Meanwhile, Swiggy has encountered markdowns in its valuation from multiple investors, with Invesco and Baron Capital marking its worth down to $5.5 billion and $6.5 billion, respectively. These markdowns have caused Swiggy’s valuation to dip below that of Zomato, which has experienced a recent surge in the stock market.
