Swiggy, Zomato Increase Platform Fee to Rs 6 per Order for Revenue Boost
- ByStartupStory | July 15, 2024
Food delivery giants Swiggy and Zomato have raised their platform fees from Rs 5 to Rs 6 per order. This 20 percent increase, initially rolled out in Bengaluru and Delhi, is set to expand nationwide, affecting all food orders regardless of customer loyalty program enrollment. The fee is separate from delivery charges, GST, restaurant fees, and other expenses.
Minor Fee Hike, Major Profit
While a Re 1 increase per order might seem insignificant to consumers, it represents a substantial revenue boost for the companies. Zomato, with approximately 2.2-2.5 million daily orders, stands to gain an additional Rs 25 lakh daily. Combined, Swiggy and Zomato expect a daily revenue increase of Rs 1.25-Rs 1.5 crore from this fee adjustment.
Swiggy first introduced a platform fee of Rs 2 in April 2023, followed by Zomato in August the same year. Both companies have since incrementally increased the fee, noting that customers have accepted the hike without a noticeable drop in order volumes.
Customer Backlash Anticipated?
During peak hours, Zomato has experimented with raising the platform fee to Rs 9 per order, while Swiggy charged Rs 10 to select customers in cities like Bengaluru, Delhi, and Hyderabad. Despite earlier statements from Swiggy indicating no plans for a significant increase, experts believe both companies will continue to adjust fees until customer resistance results in reduced order volumes.
Platform Fees in Quick Commerce
The platform fees apply exclusively to food delivery services and do not extend to quick commerce ventures like Swiggy’s Instamart and Zomato’s Blinkit. However, Zepto, a rapid delivery startup, introduced a platform fee in March this year. Handling around 550,000 orders daily, Zepto generates an additional Rs 11 lakh daily from a Rs 2 per order fee. Unlike Swiggy and Zomato, Zepto focuses solely on quick commerce, making it unique in this sector.
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