Karthik Gurumurthy, head of Swiggy’s quick commerce business Instamart, will step aside from his current role by the end of April, a source aware of the matter told ReTale.
Swiggy’s cofounder Phani Kishan Addepalli is slated to take over as the head of Instamart, the source added.
Instamart is the restaurant aggregator platform’s biggest business after food delivery.
Gurumurthy will be on a sabbatical for a few months before taking up a new role within Swiggy, the source said. Prior to joining Swiggy in 2020, he was head of sales at pharmaceutical major Cipla. An IIM- Bangalore graduate, Gurumurthy has also had stints at Cadbury chocolate maker Mondelez International along with having spent many years as a consultant at AT Kearney.
Swiggy chief executive Sriharsha Majety has sent an internal note about the developments to a select few senior leaders, ReTale has learnt.
A spokesperson for Swiggy later confirmed the development to ReTale.
Gurumurthy is likely to be heading a new business in the broader ecommerce space at Swiggy. Internally, it is being called Instamart Max. ReTale reported on January 5 that Instamart Max, a version of Instamart with an expanded collection of products, was in the works in early January.
Addepalli has been with the food and hyperlocal delivery platform since 2015 and has been the CEO of its subscription-based milk and grocery delivery service Supr Daily.
He was promoted as cofounder in 2021, a year after cofounder and chief technology officer Rahul Jaimini left the company.
The changes in Instamart’s top leadership come at a time when Swiggy is facing new challenges.
Instamart is lagging rival Zomato’s grocery delivery business Blinkit, according to a report by brokerage firm Jefferies.
In the first six months of 2022, Instamart recorded a gross merchandise value (GMV) of $257 million compared to the $270 million GMV recorded by Zomato-owned Blinkit, the report added. Unlike 2021 and early 2022, the quick commerce sector has also seen a slowdown in terms of growth, ReTale reported on January 5.
Swiggy had fired 380 employees this year as its core food delivery business has slowed down.
Meanwhile, rival Zomato, since the relaunch of its loyalty programme Zomato Gold, has started reclaiming the market share it had lost in the second half of 2022 to Swiggy, HSBC Global Research said in a note.
Swiggy’s food delivery business is headed by former Oyo executive Rohit Kapoor. He took over as the chief executive of the food marketplace in August 2022.
Grocery in focus
Swiggy is doubling down on the grocery category. It recently rebranded and repurposed the Supr Daily app into a premium grocery delivery service called Insanely Good.
“Insanely Good by Swiggy offers customers fresh, authentic, and delicious groceries, including high-quality, locally sourced, and regional delights delivered to their doorstep the next morning. We are currently running a pilot program in Bangalore,” the company said in a statement.
Addepalli is expected to continue to head Insanely Good, the source quoted earlier said.
ReTale was the first to report on December 31 that Swiggy had started piloting another grocery business called Handpicked.
Premium products, either imported or locally made, are listed on the platform.
These include Coca-Cola’s Cherry Cola, which is available in markets like the United States; Kombucha made by local startups in Bengaluru and Methi Khakhra from Gujarat, which would be delivered the next day.
Swiggy also launched an ecommerce business last year with Minis on Swiggy, ReTale reported in May last year.
Another source associated with the company said that despite having separate interfaces, including a separate app for Insanely Good, Swiggy uses the same technology and operations in the backend to procure goods for all the grocery businesses.
The development comes even as the quick commerce industry is seeing a slowdown in terms of new user addition amid a tough funding environment.
ReTale reported on January 5 that Instamart’s new user addition had slowed down significantly after crossing the 300,000 mark. Industry executives point out that beyond the top cities, which have high population density, it is difficult for dark stores to turn profitable.
Investors are also shying away from investing in high-cash burn businesses amid tightening macroeconomic conditions.
While the GMV growth was driven by new users in 2021 and early 2022, quick commerce companies are now trying to sell more products to existing customers. ReTale reported on December 20 last year that quick commerce companies were nudging users to increase order sizes.