Ordering food on smartphone

Blog series – part 2 The Swiss e-food market and its players
Compared to surrounding European countries, the Swiss e-food market has some distinctive features in terms of market volume and preferred business models. This blog post takes a closer look at the situation.
A colourful model mix dominates Europe
Within the current e-food universe in Switzerland, both startups and well-established omnichannel chains are present on the market in many different segments using a wide array of business models. But can the generally prevailing concepts be applied directly to the Swiss retail and startup scene? The figure below provides a general overview of the wide range of online food retailers, broken down into the main segments. However, it’s worth making clear that these idealized model boundaries are sometimes blurred in actual business practice and mixed forms also exist between the segments.

A prime example is the incipient mixing between the quick commerce and restaurant delivery segments that can be observed on the market. For example, the Foodpanda brand, which belongs to Delivery Hero, delivers restaurant orders as well as groceries.
The startup Glovo from Barcelona is adopting a similar approach. Apart from the product range available and its extensiveness, the segments and players in the online food retail sector also differ in terms of the customer requirements to be met. And so too the speed of delivery and delivery model used. The form of fulfilment (own stores or dark stores vs store picking vs asset light) is another criterion that distinguishes the various segments from one another. A platform-model-type, asset-light approach, where storage and order picking take place in the retail partners’ shops – such as the one used by the German startups Bringman and bringoo – has not yet become widely established in the Germany, Austria and Switzerland region.
E-food Switzerland – the primary e-food operating types can also be found here
In most cases, the current multi and omnichannel retailers date originate from traditional retailers that set up an online channel – independently of both the picking model and type of delivery – as a second pillar from which to enter the e-commerce world. While online pure players – with all their pros and cons – only operate in one channel, bricks and mortar retailers have the option of taking advantage of the benefits of multi and omnichannel strategies with the customers by extending channels. This means they can generate extra added value and achieve greater loyalty by providing regional products, for example. However, it’s worth noting that most retailers still belong to the multichannel sector. At the moment, very few retailers are managing to systematically create a seamless link between channels from a customer perspective. In Switzerland, this segment includes myMigros, Migros Online, Coop.ch and the online shops of Aldi Now and Volg.

The Swiss start-up Farmy is using the “farm-to-plate” model. As the fourth largest player in the Swiss online food retail sector, it focuses primarily on organic and regional produce from Swiss producers.
Quick commerce, which delivers food within a 60-minute radius, is still a peripheral phenomenon in Switzerland without significant relevance or market share. The main reason is the relatively high labour costs per order for delivery and the lack of economies of scale on the last mile which usually involves individual journeys to the customer address. Stash, Avec Now and Hey Migrolino are currently using this concept.
In the restaurant delivery sector – which focuses on delivering prepared meals – the startup FoodNow, which belongs to Migros, market leader Just Eat, Uber Eats as well as dozens of other small local or regional players are all active in Switzerland.
The startup Smood from French-speaking Switzerland is an exceptional case. In addition to restaurant delivery, it also delivers a limited range of groceries, adopting an asset light approach, similar to Instacart in the USA. Grocery orders are picked and delivered by Smood employees on site at participating branches of various Migros cooperatives.
Market share – how big is the Swiss e-food market really?
The figures available on the Swiss e-food market differ greatly depending on the calculation basis used. According to the latest figures published by Handelsverband/GfK/Swiss Post, unadjusted e-food revenue in 2021 stood at around CHF 1.67 billion. The related e-food market share of the entire market (online and offline) was estimated at 3.8%. However, the figures also expressly indicate this is not clearly demarcated and that there may be overlapping in terms of revenue allocation.

A TAM-SAM-SOM model was used to falsify the Swiss e-food market. This consists of three levels: the total food market in Switzerland (TAM), worth around CHF 30 billion, the theoretically addressable market share for e-food across all players (SAM, CHF 1.14 billion) and the market actually reachable for the respective participants per player (SOM). As this post doesn’t focus on one single player, this is combined for the most relevant Swiss companies and in 2021 stood at around CHF 663 million. The leading Swiss retailers myMigros, Migros online, Coop, Farmy, Stash, Aldi Now, Smood and Volg accounted for around 58 percent of the serviceable available market.