Leaders in Supply Chain and Logistics with Radu Palamariu

#57: Vivek Sunder COO of Swiggy

October 18, 2019 Season 1 Episode 57
Leaders in Supply Chain and Logistics with Radu Palamariu
#57: Vivek Sunder COO of Swiggy
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Leaders in Supply Chain and Logistics with Radu Palamariu
#57: Vivek Sunder COO of Swiggy
Oct 18, 2019 Season 1 Episode 57
Radu Palamariu
Vivek Sunder is the Chief Operating Officer of Swiggy.
Show Notes Transcript

Vivek Sunder is the Chief Operating Officer of Swiggy. Sunder has over 20 years of experience in the FMCG industry and has been working at the intersection of business and technology across several leadership roles and geographies. In his previous stint at P&G, Sunder held the position of managing director for P&G’s East Africa operations.

Discover more details here.

Some of the highlights of the episode:

  • How Swiggy became the top food-delivery platform in India
  • How they deliver in 34 minutes in a traffic moving 7km/hour
  • Swiggy’s plan on using drone delivery and cloud kitchens
  • How they added 60000 new restaurants in the last 6 months
  • Hiring Leaders and what to look for
  • The difference between working in a start-up vs an MNC.

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Speaker 1:
0:00
Hello and welcome to the leaders and supply chain podcast. I am your host, Dr. Paul MRU, managing director of [inaudible] global. Our mission is to connect you with the supply chain ecosystem in Asia and globally by bringing forward the most interesting leaders in the industry. And I'm very happy to have with us today. Vivec soon there who is the chief operating officer of sweet went from just two neighborhoods in Bangalore in India in 2014 to become the country's largest on demand food delivery platform present in 500 cities and with a fleet of delivery partners that had reached a staggering 200,000 individuals. They have over 130,000 restaurants on their platforms and the in the last six months alone, they've added 60,000 new restaurants in the platform, which is an amazing number. They have raised 1 billion in fresh capital and making it the biggest ever funding round in the country's food tech sector. And they are for furthermore, the fifth most valuable startup in India at the valuation of three point $3 billion. Um, Vivec has a lot of experiences, worked for 20 years in FMCG, in the FMCG industry. He has had different roles and responsibilities with Procter and gamble. Uh, and in his last position, he was the managing director there for East Africa operations of Procter and gamble. So a pleasure to have you with us today, Vick, and thanks for making the time.
Speaker 2:
1:24
Thank you, Rhonda. Thank you for having me here.
Speaker 1:
1:26
And let's start first by telling us a little bit, how did you end up joining Sweeney? I mean, it's, it's not exactly a usual step for a lot of people because you had a extremely successful career in the corporate world, in Proctor and gamble, and now obviously you joined it, the CEO as a of a very successful, a challenger. Now it's not even a startup anymore, but how did that happen?
Speaker 2:
1:48
Yeah, sure. Um, I, I wanted to tell you that, you know, I had planned for it for 20 years and all of that, but that would be a lie. So let me just tell you what really happened. Um, the, the reality is that I had a background and uh, like that many other people from the Indian business school scenario. Uh, I had a background in computer engineering and management, uh, and I'd always been interested in the intersection of business and technology. Uh, in fact I had heard a lot of joy and satisfaction and thank you very rewarding in working on tech enabled business outcomes within P and G. um, and the fact that the company was a lot was innovating in many, in many ways both on supply chain, um, technology as well as on consumer technology. It was a great place for me to the London stuff, um, on sort of the cutting edge of technology, um, as when it comes to, and obviously I haven't done a lot of roles with B and G inside and outside the country and I was happy doing it.
Speaker 2:
2:48
It's a great learning, uh, environment. It's a good culture as well. And I'd actually never heard about swaggy since I left the country in 2015 for an overseas assignment. And this is before Zwicky had even entered Mumbai. Oh. Had become famous. So I actually never knew about. So given I left the country, so you know, this was the Christmas, new year period and I was getting ready to come home for my new year break. And I recruited, a friend of mine asked me if I'd be coming to India and I said, yeah, I am. And he said, would you be interested in meeting the founders of swigging for a role? I actually at that point of time had to research and find out more about what they do. Um, yeah, so I mean, I Googled, I asked a few people who lived in India, what was experience, you know, and, uh, I couldn't order because I was sitting outside, but I did have a few friends order and tell me what experiences were.
Speaker 2:
3:40
And I said, Hey, this is interesting. I've seen the vision, I've seen what it's trying to do and I understand as a consumer market here in India, the demographic trends that are taking place in India. Um, so I, and I'll talk a little bit about that, um, in the, in the future about how that actually comes together to make a successful, uh, but suffice to say, three months after that first phone call and dozens of meetings, phone calls with the founder, the founder, CEO, which is how Shah and his leadership team, it convinced me that they're onto something good. So I decided to join this incredible team of young talented professionals are, well essentially changing the way India you instead of very few times when a company or an industry will be changing the way a whole population does something as basic as eating. I guess back in the 60s, Whirlpool would have felt that it's changing the way women deal with housework when it was inventing washing machines and all these home appliances in that it was freeing up the men from the drudgery of homework.
Speaker 2:
4:40
Um, and obviously that meant that they had more time on their hands and they could also join the workforce. So I, I felt that given that this is an incredible sort of inflection point for how technology is helping change the way people do basic stuff, it's a great learning atmosphere. There's, there's obviously a great ambition, a lot of experiences that I have are valuable to this startup as its skills. So I joined, um, and obviously there are big differences between BNG and sweetie, but honestly if I wanted to find a bit of P and G and figure I should have stayed at P and. G. so the choice of swapping order for chaos and stability for dramatic growth was quite, quite frankly a conscious one. But it was not something which was sort of planned for a long time. Mm. Mm mm.
Speaker 1:
5:26
Yeah. It's a, it's a, it's a fascinating story and I'll just tap on the opportunity to say that you should always keep executive search and recruit as good friends. Cause you never know, you never know when you need them. But by the way, we are one. So I'm just also shamelessly, unfortunately that's another thing
Speaker 2:
5:45
is that this recruiter friend has called me 10 times in the last 20 years.
Speaker 1:
5:53
But still, you know, I mean, the point is I, and that's, that's why, uh, the best recruiters, the ones that are doing it for the long run and the point is that he did finally place you and then, and hopefully in a very, very good role with a, in a company that is on a mission. So, um, you know, persistence pays off. You can, you can argue. And, um, I wanted also to, um, share that just as we would, you know, I was preparing and I was also doing more research on sweetie. Um, one of my friends in my LinkedIn feed posted, uh, something to the extent, every time I go to Bangalore, he was saying, I am spoiled for choice and I order my food through sweetie, which means that I usually put on two kg when by the time I come back to Singapore. So he usually takes two weeks of business trips and he was saying the experience is follows. The food is amazing. The choices are infinite. So a as sweet as just a spoiler for choice basically. Um, that was his feedback that he put on LinkedIn. Right. So he was a extremely happy customer. Um, and that kind of feeds into my question to you, what do you see has been the secret sauce that has caused Sweeney to skyrocket to it's become such a successful and successfully in such a short period of time business?
Speaker 2:
7:09
Sure. I mean, first of all, I'm, I'm uh, I'm very happy to always hear, um, you know, feedback from the customer, especially a positive feedback. The only advice I would give you since he's your friend and therefore by definition, my friend's friend is that when he's here, many of the hotels have great gyms so you can swing it through the day, but in the morning he can go to the gym too.
Speaker 1:
7:32
Yeah. I don't think it's fair to blame somebody for inputting on the way. And I think [inaudible]
Speaker 2:
7:40
um, so yeah, but the restaurant foods in India are not necessarily the healthiest, but this is a, this is a very important question in the question you've asked about what causes the business to skyrocket is a sort of, you know, almost case study question. And, and the reality is delivery has always existed both in India as well as elsewhere. I mean, I, I've lived in the UK, I've lived in Singapore that you could always have a delivery from certain restaurants. Um, you could make a phone call, you could do a WhatsApp and you could, you could have delivery of food. It's not that we invented delivery of food. I mean the real inventors of delivery are scale is actually our great partners. Dominoes. Um, and the reality is many restaurants would have an option to benefit within a radius using usually in India using surplus kitchen or serving stuff.
Speaker 2:
8:26
The problem was the choice of restaurants was limited. Not all every restaurant had it anyway. The service was extremely unreliable because it relied on surplus kitchen or serving stuff and other friction points like payment options, all also co-existed along with that board restaurant choices. So Suki, as a consumer, first company tried to solve all of these issues using the strong operations and technology competence and it needed strength both in operations as well as technology. Uh, so this is the sort of, let's call it our view of what we did to make it happen. But before I get deeper into what we do, I do want to say that that is also benefit of timing and luck, right? But most things in business, there is a massive demographic trend, which I'm confident is happening in many other parts of the world. I've lived in Africa, I've lived in parts of Southeast Asia, and this demographic trend essentially is more working singles and booking couples.
Speaker 2:
9:21
There's greater female participation in the workforce. Um, and therefore you don't have the traditional role of the woman as the caregiver and the sort of kitchen manager that is a lot of economic migration that has happened. Many of the cities are filled with people who never grew up in those cities that they are working in, in which case that means that they don't have a family infrastructure deal with things like food, et cetera. And the cities in India, and I'm guessing you've visited cities in India, but I mean, I've visited Sydney as them in Africa and Southeast Asia. I mean the traffic jams of Jakarta and Bangkok are, uh, are compare compatible if not, um, worst than ones in Delhi, Bombay, Bangalore and [inaudible]. Today if you go to a Lagos or Nairobi or even an Cairo, these are all these, these are all, let's call it emerging problems around the world and traffic and pollution means that literally nobody wants to come back from a hard day's work and hit the street again to go out and eat.
Speaker 2:
10:16
So those are all external demographic trends that essentially help the case for delivering food at home. And as long as therefore you solve the problems that the consumers have, you have the so called perfect storm or the magic sort of, you know, the, the trifecta of things that need to be in place for us to do. And so essentially as a technology first company, we are a three way marketplace. We connect over a hundred thousand restaurants to over 200,000 delivery executives to over 10 million customers every single night who are essentially trying to look for options to dine from and true strong algorithms that connect the three essentially work in a way that a gig economy workforce of delivery executives is connected to the restaurant, the pickup food, and then connected by the same app to deliver food to the consumer. And also the experience for the consumer is seamless because all the way from the order placement do the actual delivery executives sort of journey from variable here's to the restaurant and to their home. It's all happy fired and it's all gamified. So consumers has complete control and complete sort of visibility to what's happening to this food delivery. And therefore it just means that you're, since you've taken away the anxiety and the sort of uncertainty, the business just died off.
Speaker 1:
11:29
I will want to probe one level for the, because you mentioned rightfully demographics, external demographics, um, and the different aspects that were there. However, I'd like to probe a little bit deeper into why Sweden and not somebody else because it is the same with Facebook and I mean there were 10 other 20 other 30 other social platforms, but eventually, you know, Facebook kind of emerged, you know the, there must've been certain things that also, and maybe it's customer experience, maybe it's you know, the ease of doing of your platform. Is there something that you can also point out in terms of what specifically sweetie has done to be better than XYZ? Let's not call your competitors on the market.
Speaker 2:
12:11
Yeah, I actually think that a lot of our competitors, first of all, we were not the first food delivery player in India. I think we have a number four but it was a crowded field. We were number four, but there were 50 food delivery players all over the, all over the country because obviously all of them was seeing these demographic trends, right? So they are all seeing this need for this business to exist. I think the single biggest differentiator that we had that the others didn't have is that we said we can't just send the order to the restaurant and be on lead generation platform and kind of just hope that the delivery happens. We have to insource and own every single aspect of the delivery experience because the anxiety on, especially on hot prepared food is on the fact that the food will basically arrive on time and it will go to arrive in a sort of an acceptable state.
Speaker 2:
13:00
And therefore we had to make sure that the delivery fleet or somebody that basically work for us as a separate TV marketplace because a lot of the guys in the past were basically using a two sided marketplace of connecting the restaurant. Um, do, uh, basically getting orders from the consumer to the restaurant. We were the ones who really went hard after putting significant amounts of technology and operational strength into the delivery experience. So for the first three years, if you did a consumer survey and an NPS, as I'm sure your listeners are familiar with the net promoter score, the single biggest differentiator that would basically make you stand out head and shoulders above the rest was the fact that our algorithms and our apps together, we're letting the customers have a Stressless delivery experience. And that became the initial differentiator. The stuff that gave us, let's call it two years of runway.
Speaker 2:
13:57
Eventually everybody followed suit because they knew the writing on the wall. But by that time you had two years of runway and we have got significant momentum since then. Of course as a consumer first company, we have a lot more innovations that we have invested in. Um, and I can talk a little bit about those innovations, um, in, in, in a subsequent question or perhaps now if you want. But those innovations are riding on top of a, let's call it the first advantage that we had of speedy, reliable, amazing, a delivery that the consumer doesn't have to think about. [inaudible] ordered it and forget it. But if you're interested, you can follow the driver, um, all through his journey. And that just made a tremendous difference in the first three years. And those are the three years had most of those 50 other competitor does just died out because they didn't have the advantage?
Speaker 1:
14:45
No. Fantastic. I mean it's, it's, it's, it's, it's a, so if we want, we want to nailed down the secret sauce. It's got customer experience and it's not really a secret sauce really. It's a, it's a basic fundamental that we forget. A lot of businesses forget. And that's when the, the, the, the challenges, uh, occur. And we also deal with a lot of businesses in the, in the express or in the, you know, parcel delivery. And it's exactly the same people that are e-commerce specifically clients. They want their to know where the parcel is. They want to be able to trace it, to track it. Um, and wherever it gives them the visibility is, is better than, uh, than the others. And of course, in terms of food is even more so important because if you're hungry, you definitely want to know where it is. How fast it's going to reach you. And you're much more than that.
Speaker 2:
15:30
In fact, let me just give you an interesting anecdote on that one. Um, it's astounding how quickly consumers think of [inaudible] was good. Yesterday becomes the norm today and, and it changes at the space of light. So let me give you an example of that. In a small city, which is a city where it doesn't speak, it doesn't exist when we first enter because the demand density is not that great. And the sort of, you know, we're still new and we're still sort of settling. Our workforce, um, orders often take up to 40 minutes of the living and consumers absolutely love that. So the NPS scores would be like not the 50 in those cities six months later because demanded city has gone up and our operations have improved and stuff like that. The delivery comes down to the average of about 32, which is what we have across the country, including in the new cities.
Speaker 2:
16:22
But I told you to, consumers are not as happy with it as they were six months ago when we were delivering at fucking. So not only do we have to keep increasing the pace off of sort of, you know, higher quality of service consumers are basically raising the bar constantly on us on what is considered acceptable performance. So I think this challenge of doing it at scale is what really keeps us awake. Um, every night, and I say nights specifically because we have over 40% of our orders after 7:00 PM. So this is actually a night and day business rather than a day at night business. And this is the key in customer service, but customer service in ever increasing, raising the bar of, of what would standards ought to be.
Speaker 1:
17:07
Hmm. And I'd love to let, let, let's, let's talk about that. You mentioned the new things. You mentioned new technologies. You mentioned newer, you know, you mentioned the innovations that you tried to implement. I was reading just this week I think. Well it is that just this week I read that at least that you're in talks about drone delivery. And then and U N a few other companies have been selected by the, uh, by the regulators in terms of testing some, some potential, the opportunities there to see if it's feasible or not. So maybe, maybe tell us a little bit about what you're experimenting with.
Speaker 2:
17:39
Sure. I mean, so uh, drone live with most of the things is part of an early experiment. Um, [inaudible] we are constantly looking to um, innovate. That is actually a separate, even though we think that this company is quite innovative, that is a separate team within that is sort of less burdened with the day to day operations and they're the ones who are innovating on a whole bunch of things. So we have AI and machine learning innovations on as we speak. We obviously have drawn talk processes and the don't have done drone pilots in, in, in situ. Um, and then there's a whole bunch of them. I mean these are still early stages that I wouldn't want to kind of, uh, you know, let your readers believe that our drone delivery in India is a few months away. I suspect it's a little more than a few months away. Uh, but the, the bigger question we are trying to solve is how do we make sure that more consumers come onto a platform and the ones that come at different, um, so these, the different use cases at different time slots on the day are getting those seamless experience.
Speaker 2:
18:40
Because the trouble with a lot of Indian cities is that you could be in a situation where you could have traveled, um, 50 kilometers in about half an hour, and then you hit the city and you're in the, in the, in the next half an hour, you may actually only travel half a kilometer. And given how crazy it is, the only real solution is, I mean, why did they, governments are trying to figure out metros and all the other means of communication, of, of transportation. We think that the drones will come to a place, it will come to a place where physically can only deliver within the time that food stays fresh, uh, using a drone. Because the reality also, by the way, and this is particularly true in India, where uh, the restaurant density is very, very low. Uh, I don't know if your readers are aware of it. Um, but vest on the in-city per capita, all restaurant that city in the cities that we are talking about is amongst the lowest in the word.
Speaker 2:
19:36
Now you don't often feel that when you're visiting India because everything is so crowded. But the last majority of the stores in India are grocery stores because people tend to buy groceries a lot and consume food a whole lot given the nature of caregivers and sort of, you know, um, cooks that we can actually hire and given that the number of restaurants, but by the way, the number of restaurants on our platform is less than that. Across 500 cities is less than that I've found in Beijing alone or in New York city or London city alone. That's just how low the restaurant densities per capita. If you have less restaurants, then you need to innovate in two fronts. One need to innovate and provide more restaurants in the newer areas. And that's an innovation that we have called access, which I'll talk about. And the second one is to say Henderson, but if there's a great restaurants and people want food, then the only way you can really Traveler's, uh, the busy landscape of India is by drone.
Speaker 2:
20:32
So the logic for the drone is to make great food travel to places where it's road traffic simply won't look, uh, and, and the, and an innovations like [inaudible] access is to provide new geographic locations, two great restaurants that want to partner with us and move the restaurants. So that is this innovation called cloud kitchen. I wouldn't say we invented it, but we are definitely the ones that have given it the biggest impetus, which is these are kitchens which really only exist on the cloud. They are essentially just kitchens. They don't have any seating space like a traditional restaurant. They are run by iconic restaurants, uh, in new geographies where they don't yet one to open a restaurant, a sit down restaurant. And because they are on Snuggie, they're able to serve that catchment area. And as far as those people are concerned, they're still getting that amazing restaurant in their locality without having to travel.
Speaker 2:
21:25
Yeah. What would have been 10 kilometers to travel to the actual restaurant of that city. So, uh, there are other fly 5,000 cloud kitchens that we have. And this, this business is just exploding because there is a real estate is stuff and restaurants don't often want to open new sort of, you know, uh, sitting areas and because a lot of the business is moving online, uh, cloud kitchens is another innovation that we will. So I would say cloud kitchens and Brunes are attacking the same problem, which is not enough food choices for urban consumers in India.
Speaker 3:
21:57
Hmm. Fascinating. And we actually had a question about cloud regions and then thanks for addressing it already and how, how do you, and another, and another question that ended was, was there, and then, and again, maybe, uh, maybe you can or you can not share, I don't know. But, um, the one of their listeners was actually wondering whether you are at some point going to go and build the build blocks around the eCommerce a itself and delivery itself. Because you know, why only do food deliveries and you could do, you know, you could do full fledged deliveries as well.
Speaker 2:
22:29
I'm sure. I mean the, the reality today is that our strengths are logistics and operations, technology and customer centricity. Those are the ones which we call as our three core strengths as a company. No. Well, as a result, if we find that the consumers are essentially looking for a friction points in their lives that are either stated or unstated friction points, we will try to go after addressing it. No e-commerce in itself is, is, uh, is not something which right now we have either thought of entering or not engineer, but let me give you an entry that we have already made that is essentially taking these three strengths and solving the problem. Uh, essentially, uh, grocery stores have this, uh, there's, there's like millions of grocery stores around the country, largely mom and pop stores. They're all sort of, you know, uh, offline stores largely.
Speaker 2:
23:22
Um, and the reality is consumers often have to go down from their homes. Um, I'll go out to their homes and, and both with the same traffic that they are unwilling to go to for the restaurant. Food delivery park buy tough. Now consumers don't mind doing that for the large bulk purchase cause that's sort of once a week or twice a month. Um, but for the regular day to day top-ups that they have to do with the milk or the bread or the eggs or the cheese, the, the cigarettes or the, or the smaller top of items, they often don't want to go and face the same traffic. And again, the same unreliability problem happens if you have the call the delivery problem, the restaurant auto call does a grocery store and have a delivery because if he doesn't have free free labor, he's not going to send a the people.
Speaker 2:
24:02
So we have just launched squeaky stores which connects hyper-local grocery stores to the consumers. And you're finding that even though it's relatively new days yet, it's still in its first year of operation. It's delivering the same sort of consumer love that our restaurant business did in its first year. Why? Because we are solving the same problem. We are essentially aggregating the catalogs from a whole host of grocery stores so that consumers are able to see what they want to order. We are having the same sort of familiar interface and the familiar payment ecosystem that they've used to with [inaudible]. And we have the same reliable that it'd be fleet that is actually delivering with the same, I don't have, you know, 30 minutes, um, sort of period. And the reality today is that almost no eCommerce player that runs a very different business model of procurement warehouses and sort of, you know, last mile distribution that business models are very different from us. We are essentially electing demand is hyper-local and connecting it to consumers and basically fulfilling it to our last mile. Um, sort of, you know, delivery fleet. And so to say that almost a hundred percent of our grocery store pickup and deliveries have happened in the last one in 35 minutes after delivery. It's pretty, pretty unique, right? I mean, because no e-commerce player is going to be able to meaningfully run a system that delivers everything that you ordered within 35 minutes after ordering.
Speaker 1:
25:23
No, it's incredible. And we are talking about India. We end up, we're talking about the high density, high traffic. I mean for, for whoever is listening to this and hasn't been in India, you know, go on YouTube and you see what's happening in traffic that I've had the chance to visit in there a few times. It's
Speaker 2:
25:39
great example. Even in a city like Bangalore, which was already quite bad in terms of traffic, which is the average urban traffic speed was 17 kilometers per hour less than a decade ago, and today it's half of that. It's just incredibly,
Speaker 1:
25:53
Oh wow.
Speaker 2:
25:55
I mean seven or eight kilometers per hour is worse than central London.
Speaker 1:
25:59
Well, I mean if you, if you're a fast Walker, I guess I'm saying,
Speaker 2:
26:08
I no know you're right. If you're a fast Walker but don't mind dying in the small,
Speaker 1:
26:12
I think there's more, there's a different level of complexity to that that again is worth mentioning. I have a question and let's address also the elephant in the room and especially in the context of the last a, unless, let me not mention their names, but there was a big company in the real estate business that was supposed to IPO and I think everybody knows what I'm talking about. Um, and it didn't happen. There was some huge cash burn rates that they incurred. Uh, also in the, in the delivery for delivery businesses. I was reading somebody 30, 40 million per month type of a burn rate. Uh, that, that was a, there were some numbers thrown at, uh, at some of the businesses, uh, uh, in, you know, speedy or, or some of your competitors in India. But I wanted to ask you, the cage burns are high, or basically you need to expand, you need to grow. But how do you, how do you kind of think about it in the context of also growing ultimately a sustainable, profitable business? How you know, where is, where is the cash burn, where does the profitability come in? How do you put all this into context?
Speaker 2:
27:13
Sure. So the first thing to organic keep in mind is that um, at this moment we're still in blitz scaling phase and because of the fact that we have, let's call it respect, expected competent UberEATS isn't uh, it's, it's a meaningful competitor. Um, obviously is no matter who is a meaningful competent or given that these are meaningful, competent, doesn't we, we heard of other people wanting to enter this. Well that's attractive space. I mean it's a now in the public domain that Amazon wants to enter as well in India. The reality is that given how much competitive activities there, it is important and imperative for us to maintain love with our customers and make sure that on the things that we want to win with we win and on the things that we don't want to lose on, we don't lose them. No discounts is something which is one of those, so us a part of the cash bonus discount, right.
Speaker 2:
28:07
In the reality today is that two years ago there was less discounts in the market than it is today. Why is that? Just because of the fact that we basically, the number of competitors just doubled in the last two years and so therefore we needed to kind of increase our discounts to stay within what is called the acceptable threshold of our consumers in DMS of the acceptable value. But we was always investing in our growth story, which is the number of cities we have grown into the number of delivery executives we have, the number of restaurants we have because we knew that getting new customers to come onto the platform, getting them to transact and love the platform is the more that we need to have that will essentially stay there when this sort of discounting frenzy dies down naturally. So I think our investors know this and that's why we had, we have the support from them as we have had so far, which is that the business is inherently a sustainable business in that the average order, if you just do the unit economics, a lot of the businesses need to worry about unit economics because the fixed across will start playing out.
Speaker 2:
29:13
The moment you get scape, the unit economics of this food delivery business is inherently attractive, provided certain conditions are true and those certain conditions are that you must have an auto value that is reasonable. I mean for India, their auto values, ah, some somewhere between seven and $10 depending on the order. And that's, that's basically in what is called a, we think it's in the happy territory. Uh, we have a, a commission and an advertising delivery revenue that is giving us a certain sum of money. And as long as that sum of money is greater than the amount that we need to pay the delivery executives and the, um, uh, payment gateways and all the other costs that are incurred, the businesses inherently viable. So part of what brought the frenzy into this market in India was when we actually demonstrated our ability to deliver unit economic, um, positivity in some of her earliest cities.
Speaker 2:
30:08
The moment we been able to demonstrate that we can run this business in a unit economic positive manner is when the investment journey took off on a rocket ship. And of course that meant that we grew fast and that meant that we also attracted a lot of other competitors and the other and so and so forth. So what you're seeing right now is a cash bond that is fewer after having seen what is called viability of the business. And right now everybody's just in a gets kick yet get scale and get, um, so if customers to be acquired and so on and so forth. And even today, let me put it this way, we are acquiring more customers today than we were same time last year. Normally a business that is basically going this fast stood start getting more and more of its business from existing customers.
Speaker 2:
30:51
While our existing customer base is increasing, we are still getting more new customers to come onto the platform. Then we vote same time last year, which means we are in growth phase and at this growth phase, we do think that the button should continue. That said, you keep coming up with smart ways in which we can drop the buck, whether it's through efficiency means or through, it's one of your know effectiveness ideas of, you know, discounting effectiveness and delivery, the delivery effectiveness and stuff like that. A few of our orders are what we call batch starters, which means we basically have one delivery person delivering two orders. But why did it meet certain criteria? And as long as it meets the criteria is, and we send two, uh, orders with one delivery executive. Obviously it's an efficiency that uh, that helps the bottom line too. So the bone is high that I'm not shying away from, but there's a certain reason for it and it's on the back of having demonstrated what is called inherent attractiveness of the business. Hmm.
Speaker 3:
31:46
And I want to ask you for the future. So let's say w where is this heading to? Two, five more, whatever years ahead of us. Right? So you're, you're continuing to grow, you're continuing to scale. You're continuing to what's the, what's the kind of next milestone that you're aiming at? Because you know, from 500 cities you will reach 1000 and, and all of that you can do by charters, but is there some level of, you know, sharing that you can do with us? Cause you know, the more you extend at some point and obviously the bigger density, the bigger networks, but it also means that mean that you've got to be more effective in a lot of different ways. So maybe tell us a little bit about the plans for the future and how will the, will that look like?
Speaker 2:
32:22
Sure. So I already referenced a little bit of it, but now let me deep dive it. Um, so essentially today our business is largely food delivery. And uh, the reason for that is basically our old sort of vision was changing the way India eats. And while that journey is still got a long, long, long runway ahead, um, because if you think about it, the average of that are, let's call it 300 million urban Indians and each of them are having 90 to a hundred meals a month, the number of food deliveries that the whole industry does, us plus our competitors is a fraction of that. So he just on food delivery alone, there is a long runway ahead and we think that we have to come up with innovative ways in which we can get more of those consumers to transact more frequently. But given the strength that we have, which is technology, consumer center, city and operations, Oh logistics, we feel that there are more problems that our consumers are facing today in urban India that we need to solve.
Speaker 2:
33:21
So we've sort of pivoted out a vision from changing the way in their eats to becoming the Kings of convenience for urban India. Now what that opens up is that it opens up things like swigging stores, which is what I was differencing before, which is connecting customers to nearby grocery stores, nearby bed stores, nearby kiosks, nearby, a florist nearby any stores, frankly, and that's a product that just launched. It's in its first year. We've seen really good results, but we think that in the next five years that'd be a big part of of sweet tea. The second thing which we have done is we have the ability to connect a to B and there's a lot of fiction. There's a lot of trips that are made across the city that are, let's call it local, hyper-local, who do your jobs, which is, you know, either from a consumer to consumer point of view that, Oh, you know, I forgot my lunchbox at home.
Speaker 2:
34:14
Ken, can I have my lunchbox central sent to the office, or I forgot the keys and can I have the keys sent to somebody else? Or you know, I want to send this mobile phone charger to somebody. That is a lot of these sort of, you know, use cases that are there of hyperlocal interest to be courier that swig go can do. But remember that the moment you have the ability to pick up products from pick up anything from place in send to place B, it opens up a lot of opportunities for other players. Also to basically apply a hyper-local, very reliable system of delivery of things to consumers from place a to place B. So sweetie goal, which is the smaller packages piece is also just been launched and again it's about early consumer love, but the number of the both of these stores and go are still what we call the on demand platform.
Speaker 2:
35:02
We also acquired a company which is called super daily, which is by the way, the morning milk runs a think of on demand as on demand. And think of the milk run as something like a railroad. Um, I think of on demand like mobile phones, which is in anytime you want to connect and it's sort of, you know, both not tethered to any location. And think of a railroad as the equivalent of the landline at home. The reality is that once you have a machine that basically has a route to a consumer zone on the subscription, things like milk in the morning or bread in the morning or the things which need to be in the morning and need need a daily run and when when do you establish that railroad, then you can put a lot of things on that railroad and make it really, really attractive for both the consumer as well as for us economically to be able to serve this because you already have the fixed costs of somebody going to the house.
Speaker 2:
35:52
Adding more things to that is essentially going to come back relatively low incremental cost and it's great value for the consumers. It's great value for us. And so that is also something the railroad on top of the sort of on demand system is something we expect to scale over the next couple of years. Now these are what are called the problems that we have sort of trying to solve for and these are things that are in market. They are tests and early by in the market. In addition to that, that is a whole host of new innovations that are thinking of that are sort of still in the, yeah, pre ovens stage and they're not sort of in beta yet. So I wouldn't want to talk a little bit about, I wouldn't want to talk about them yet as yet, but again, think about it as it will reflect our logistical, um, sort of prowess, our technological bend and our consumer centricity. So we are constantly pulling consumers and finding out what are the friction points that they have.
Speaker 1:
36:45
Mm. And would you say, would you say that that mostly you want to focus in India or do you also have plans at some point and have you, I'm sure you've considered going regionally.
Speaker 2:
36:59
Um, so I mean, I think this is done. This is one of the things which shouldn't be, get asked a lot, a lot, which is our business model in specific or is it scalable across, uh, other parts of the world and not me? I didn't give you my point of view. And I know that my mind views largely shared by the founders and the other leadership team members. We believe that our why while our business operating system has certain tweaks or certain quirks that are in that specific, and I can, I can talk about that in that in a bit. The business model is by and large not specific to India, which means it has the ability to work in a Cairo as an IOB, as an a Lagos, as an a, uh, you know, uh, Brasilia or, or even a Jakarta. So there's nothing in our business model that makes us sort of, you know, India only, uh, obviously there are meaningful competitors in those cities.
Speaker 2:
37:49
So obviously we are mindful of that. But we do think that, uh, once we are sort of, you know, had the appropriate stage and if you have the right level of sort of expertise in partnership, we don't see why sluggish should only be India specific, especially when we start solving many, many, many new use cases. 40 India. Then that bundle of things, which is the Kings of urban convenience is something that can spread much better because essentially nobody today we believe, provides that sort of omnibus, everything under the rules, all open conveniences under one roof, sort of a system that we live. So our ambition is including things outside of India, but, but there are no imminent plans to leave if that's the question.
Speaker 1:
38:31
Yeah, no, I mean there's, I mean, the closest that I have seen just in terms of sharing and they've, they've done
Speaker 3:
38:36
a fantastic job in one market for now, um, is, and I'm sure you know of them is Go-Jek. So they've, they've, they've tried, they've, they've, they've, yeah, they, they kind of a super app in may in many ways, but they also themselves, they have not, they have not yet duplicated that in any other market. And look, I mean, just, just to be clear, where personally I stand, I don't even believe necessarily that you need, need to do that, right? I mean it's, uh, India is such a huge market, um, dominating India and in itself is a, is a multi tens of billions of dollars opportunity, right? So, I mean, I think a lot of times people that, and I mean I asked the question because if we've got it from our listeners, but a lot of the times we get lost in it a bit into how fast can you scale and how fast can you go global. But you know, is that really the point? I mean, the point is genuine serve your customers really well and can you, you know, can you be very, uh, very close to them? So, um, if it's one market rate, if it's several markets, you know, great as well, but, um, you know, start where you are and be very good at where you are.
Speaker 2:
39:38
One of the things which, um, this is [inaudible] by the way, I think that there's a lot of logic in what you're admitted to what you're saying. And there's huge, we haven't even solid, uh, 5% of urban India's problem. So if you think about the fact that there is a, um, you know, plus there are 20 that are 20 times more problems to be solved and then those 20 more problems are to be solved 20 times more frequently. So if you take the penetration frequency and the use cases piece, we think our business can basically be a hundred times bigger, uh, before we start hitting some sort of natural laws of gravity in terms of not having enough room.
Speaker 3:
40:15
Yes. I'm shifting a little bit the conversation towards the leadership talent, finding people that aside as well because that's, that's a key element when you're growing at the pace that you're growing and, and when you're, you're developing at the pace that you're development developing, you also need kind of to ensure that people are being developed, uh, that, you know, maybe somebody that led 10 people all the sudden in one year leads 100 people a, this kind of things can happen in hyper scaling mode. Um, how do you ensure that, um, sweetie, that you have a good leadership pipeline, that you're preparing your, your, your people to, to turn leaders faster than a normal P and G type of an environment?
Speaker 2:
40:59
Um, so, so let me put it this way. I would have, I would like to believe that, um, the, the majority of the time I spend is on the business, but happily and sadly in a sense, I mean, I say happily, uh, I spend most of my time in essentially both assessing talent but also basically getting talent yeah. To come into Sydney. And that's not just true for me. It's true for all the leadership team members we spend on, not in an amount of time in the recruiting process. I actually in the [inaudible] recruiting process because often enough, there's a lot of great executives out there, well, kind of certain. Um, it was about moving into the, uh, into the, uh, the startup board. And so it's important that we basically talk about what are the good things and what are the not so good things.
Speaker 2:
41:45
So that that is less inflammation asymmetry out there amongst good quality leaders, both in other startups as well as in um, non startup sort of environments. And therefore we have to constantly be building, building a bridge with great talent even if we don't really see a fit for them in the immediate future. The business is growing so fast that we know that in three months we will certainly find that, Oh, that, that amazing executive we met, um, and, and had a chat with and had a coffee chat with his nose perfect fit for this one goal that we have because it's scaling and you suddenly find that the mortality. So I think the first thing is it's a three 65 [inaudible] and the senior, most people are involved in it. Obviously this ensures that we do get slightly better results in terms of talent acquisition than many of our peers, but also that then doesn't help attract other talent.
Speaker 2:
42:33
And so to so-called flywheel that we have the see when they see other people, when other people see that their [inaudible] colleagues and their contacts have joined swaggy and are successful and they've spent a and they seem to be doing well and and so and so forth. It's, it just provides that sort of flooding effect. But the most important job actually begins once you have recruited them, which is providing meaningful roles and a good working environment are absolutely key to making them stay in the industry. We have an attrition rate of senior management that is a fraction of that offer sort of industry cohorts start up well hearts. And I think the reason for that is that the founders have a very good God showed off sort of, you know, letting go and letting people get on with what they're good at. Um, also there's a lot of new avenues.
Speaker 2:
43:20
There's always something new to learn, the companies pivoting and, and sort of getting into so many new things that it also means that we have lots of new opportunities. So, even when somebody has become a veteran at the food delivery business, he can go on and lot something completely different, which is how to aggregate demand from the sort of um, grocery stores in the country or how to aggregate, um, you know, milk demand that early in the morning and so and so forth. So the reality is that the business, uh, at the heart of it has the commonality of technology, operations consumer, but in terms of the types of problems at solving, it's very different. So I think that that mix allows us to basically stay ahead of the game.
Speaker 3:
43:57
Also, you have made that transition from corporate to uh, to this fast paced, chaotic in many ways. Um, hyper scaling mode of sweetie and a lot of people even, you know, I mean I, we, we get to talk to a lot of executives from, from corporations and I mean a lot of them dream or think that the grass is greener on the other side, that, you know, they may want to start their own thing or they may want to join a startup as well. I'd love you to also share with us what were some of the biggest, how to say shocks, because I'm pretty sure you had some shocks,
Speaker 1:
44:32
right? There's definitely some culture shocks when you join a startup, but also some of the, you know, some of the learnings and experiences for you from joining from P and G too, to speak you personally on a personal level.
Speaker 2:
44:43
Sure. Um, so I mean, first of all, the chaos and the sort of fast paced et, etc. Not, uh, not shocked because, uh, for me to call that a shocker for anybody from a P and G to call that a shop would be the Willand. Like, I mean, if you and I were to go into a nightclub, uh, in the night, um, you know, we, we shouldn't be shocked if it has loud music and a lot of smoke. I mean, we should just say, ah, that's what we went for. We went for loud music and, and, and great. Uh, so that's not a shock. The chaos and the space and everything else is not a shock. It's just a sort of, let's call it a feature of the environment. And getting into one of the things that actually was a shock to me, uh, is, um, and this is, I guess the, the, the sort of the, the upside of growing really quickly and the upside of being successful.
Speaker 2:
45:33
And the upside of basically being so attractive to everybody is just how many people are there. And this is a problem that I suspect is a little more true in startups in developing markets. Then there are in developed markets, but we do tend to have a lot more people, uh, solving problems, uh, than perhaps you're used to in a, in a typical B and G environment, the organizations are very name, even though the company is big, the reality is the company is, it's very lean. And then when it comes to the operations, um, so one of the things that was surprising to me is just the number of people we have. We have over, uh, 5,000 people in our, in [inaudible], in the food delivery. A please. And these are not, I'm not including the delivery fleet or sort of, um, uh, contract, uh, vloggers. And so to have an order to move from an organization, so I was running all of sort of East Africa but no less than a hundred people.
Speaker 2:
46:29
So the move from a situation where you largely run a very lean team to uh, to come to a set up where there are lots of amazing, sharp, young, ambitious people, but just the sheer number of it was a surprise to the rest of the chaos at the base and the excitement and the all of that was sort of, let's call it the positives of what wasn't known or expected stuff. And how we dealt with it was very simple. At the end of the day, I mean it's, people are resources, right? So if you find that we have a lot of resources and they're good resources, then you use them to do amazing stuff because we are still in growth phase. So that those are some of the resources that we actually used to grow from 13 cities to 500. I mean, just to put things in perspective, in the first four years of the company, we hit a sum total of 30 cities.
Speaker 2:
47:14
Uh, we basically added 30 cities on the last day of the fifth year of the company. So if you think about it, you took four years to hit 30 cities and after that you basically created a blitz claim blitz scaling plan, which allowed you to add more cities in one day, then you had added in the law in the first four years of the company. I mean that is the probably book definition of bricks getting, but it can only happen if you have book smart people on role. And so essentially that was the one which wasn't it sort of a surprise, but obviously it's not a, it's not a problem in itself if you want to see what I'm saying.
Speaker 3:
47:48
Mm, no. Excellent. Excellent example. I love the analogy that you use with the, with the nightclub. Um, makes it even more clear. Would like to also ask you in terms of thinking in sharing with people that are listening from a career perspective, but also in general. Um, you know, you've, you've had a successful, a successful trajectory in Proctor and gamble. Now you're the COO of, of sweetie and it's a different ball game. Are there certain principles, maybe one or two that you follow and you have followed in your, let's call it career, right, so far that have been extremely beneficial and would help also somebody listening maybe younger in their professional development?
Speaker 2:
48:30
Sure. Um, let me just think through this because, um, the, um, I actually don't think of, uh, the career as a sort of a, a sprint that you have to order or a single exam that you have to win in the best way to look at it as it's a bit like life or it's a bit like a marathon where, I mean there is a plan, but at the end of the day, you, you do what you do. And so I'm going to try to give you, or actually this almost the best piece of advice I've received, um, in the early part of my career. Um, and I do want to give it to you as sort of three points. One. Well, look, even if you're an employee, as if it was your own business, I have absolutely seen no benefits in thinking of you as an agent that is working on behalf of somebody.
Speaker 2:
49:14
Uh, it just doesn't work. If it is your own business. If you work like if it is your own business, then you will find that you have a greater levels of learning than the other person. You have the levels of passion that the other person who therefore, um, grow faster than the other person a second. Don't worry about what the assignment is. Learn every single day at work. I, in my first 10 years, I used to write it, write a learning diary every single working day, which is what did I learn today? And there were some days when I really was [inaudible] Ali Ali's jobs, sales and marketing jobs. Sometimes it would just have a repeat of, I mean, if you're doing a monthly review, then one monthly review conceptually looks like another monthly review. But if you're not thinking about forcing yourself to say, what did you learn from?
Speaker 2:
49:59
And these are learnings that you could have had from [inaudible], from good things you did bad things, you did good things other people did or bad things other people did, or just you met somebody smart who taught you something or you met a consumer who taught you something or you met an employee who taught you something every single day. I used to write down my learning, uh, learning journey. And then I did it for the first 10 years after that I moved into from a notebook to a digital system and then moving into weekly. But it's still an incredibly rich source of establishing what it, that I should have learned. And what is it that I've known? Obviously I may have learned 1% of what I wrote down, um, because obviously I've written diversity and everything, but I do think that I want to approach every day as what will they learn.
Speaker 2:
50:37
Like, if you think about this podcast, uh, I'm going to probably play back when I spoke to you and learn on what I did well, but equally learn on what I did that and therefore, even if the rest of the day goes boating, this is a learning opportunity. So every single day at work should be learning. Uh, the third thing is, uh, don't worry about immediate results like promotions or bonuses. Uh, if you actually don't worry about immediate results or promotions or bonuses, you will find 10 years later if you're absolutely ahead of the pack, but even if you're not ahead of the pack, you will be ahead of where you would have otherwise been if you were worrying about success. I mean, the baby, the way to think about it is, um, and, and in many sportsman have talked about it, right? I mean, Kobe Bryant, we'll talk about it and say, I used to come in at four in the morning and throw, you know, 50,000 baskets.
Speaker 2:
51:26
I mean at that point of time, you know, stardom and what would be his score when he's blamed for the NBA was for this from his mind, he just needed to plonk down those 10,000 baskets and make sure he does a good job. And so a lot of the times if you're focusing on the Xilinx and bonuses and promotions and, and all of that, you will basically find that it is putting you down the wrong path of learning and also then making you disappointed in a, in a marathon when somebody goes ahead of you. So I think those are the three big pieces of advice that I was fortunate to get from my mentors early on my career. And it stayed largely kept me in good state. Hmm.
Speaker 3:
52:02
No, I love, I love that end. Um, and could not, could not agree more. It's a marathon. It's not a sprint. I think, um, while I being, I personally, uh, oftentimes I've forgotten that then in life usually has a way of getting us or getting us to remember this and the, and, and sometimes the long way is the short the way. Uh, ironically, and funnily enough, and usually the people that think longterm are, are the ones that, uh, you know, that end up being, uh, and I liked how you said it. You know, it's, you're, you don't need to necessarily, and I think that's a problem that a lot of us face that we try to, uh, compare ourselves with others. Like would, I said, right comparison is the root of all evil when actually we should compare ourselves with, with ourselves one day ago, one year ago, 10 years ago, and then we would, you know, we would probably be better off. But yeah, in theory, everything is easy in practice, it's a lot harder. Um, nevertheless, great points. We like thanks a lot for, for sharing that and really appreciate all the sharings and all the great case studies and, and keeping it real and making it tangible, uh, with us today and, uh, and wishing you and severe continuous success. And hopefully in in one, two, three years we will talk again and you'll tell us how a lot of the new initiatives that we are just now planning turned out to be a wonderful success.
Speaker 2:
53:19
Thank you very much. I'll do it. It was a pleasure talking to you. I do think that while I had a broad idea of what you're going to ask, I really love the fact that a lot of the questions you asked were stuff that I hadn't actually prepared for it. So I would say truthfully that I answered the sort of the bad ones. Um, equally truthfully as I did the unprepared ones and I do want to thank you for keeping a drip.
Speaker 4:
53:41
My pleasure. Thank you for listening to our podcast. If you liked what you heard, be sure to go to www.ellicottglobal.com and click the podcast button for all the show notes of the interview. Also subscribe to our mailing list to get our latest updates. First, if you're listening through a streaming platform like iTunes, Spotify, or Stitcher, we would appreciate a kind of review. Five-star works best to keep us going and our production team happy. And of course, share it with your friends. I'm most active on LinkedIn, so do feel free to follow me. And if you have any suggestions on what what to do and who to invite next, don't hesitate to drop me a note. And if you're looking to hire a top executives in supply chain or transform your business, of course, contact us as well to find out how we can help.
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