News Update

Swiggy Introduces Platform Fee for Food Orders as Business Growth Stagnates


Food and grocery delivery company Swiggy has announced a new “platform fee” of INR 2 for every food delivery order placed in cities such as Bengaluru and Hyderabad. This platform fee is in addition to the delivery charge, which is waived for Swiggy One customers, who pay an upfront fee to receive benefits like free delivery of food and grocery. Even Swiggy One subscribers will be required to pay the platform fee. According to a company spokesperson, the platform fee is a nominal flat fee that helps in the operation and improvement of Swiggy’s platform, as well as enhancing the app’s features for a seamless user experience.

Swiggy introduces platform fee on food delivery orders as growth remains flat, while rival Zomato is said to be reclaiming market share with the relaunch of its loyalty program, according to HSBC Global Research. In January, Swiggy cofounder Sriharsha Majety informed employees that the food delivery business growth had not met projections. However, a person aware of the matter disclosed that Swiggy does about 1.6 million orders daily. As of Q4 2022, Zomato had 54% of the market share, with Swiggy holding the remaining 46%, according to the report.

Swiggy’s food delivery unit is headed by Rohit Kapoor, who joined as CEO in August 2022 from Oyo. The food delivery company has been cutting costs and streamlining operations, including laying off 380 employees and discontinuing its meat delivery business. However, it has been expanding its ecommerce and grocery businesses, and has launched Maxx, an ecommerce platform with product categories such as pet care, electronics, home and kitchen, and stationery.

Swiggy has expanded its offerings beyond food delivery to include e-commerce and grocery businesses. The latest addition is Maxx, a platform that aims to be a one-stop-shop for home and family shopping needs, offering delivery within one hour. Currently, Maxx is being piloted in Bangalore. Additionally, the company has several grocery-delivery products, including Instamart, Insanely Good, and Handpicked.

Swiggy is undergoing changes in its top leadership, with Karthik Gurumurthy, the head of its quick-commerce business, stepping aside and cofounder Phani Kishan taking over. Additionally, Chief Technology Officer Dale Vaz will be leaving the company and will be replaced by Madhusudan Rao, the senior vice-president of Consumer Tech and Fintech (engineering and product) at Swiggy. The changes come as Swiggy aims to streamline its operations and expand its ecommerce and grocery businesses.

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