Swiggy has increased its platform fee for the third time in three weeks to ₹15, the highest it has ever been. This fee will be separate from the delivery charge and GST. Zomato has also set its platform fee at ₹12. Both companies are expected to earn additional revenue of crores of rupees daily from this.
Swiggy Platform Fee: Food delivery company Swiggy has increased its platform fee to ₹15 per order due to increased demand during the festive season. This is the third increase in the last three weeks and the highest fee to date. This charge will be separate from the delivery charge and GST and will not be uniform across all cities. Zomato has also set its platform fee at ₹12 per order during the same period. It is estimated that both companies will earn over ₹3 crore in additional revenue daily from this.
How the Fee Increased
On August 15, Independence Day, Swiggy had increased its platform fee to ₹14. However, it was later reduced to ₹12. Now, considering the increasing number of orders during the festive season, the company has again increased it to ₹15. This fee is separate from the delivery charge, GST, and restaurant charges. Also, it is not the same in every city but varies according to demand and order volume.
In competition with Swiggy, Zomato has also increased its platform fee to ₹12. Demand increases significantly during the festival season, and both companies do not want to miss the opportunity to earn more. This is why the platform fee is being changed rapidly.
Expected Earnings
According to Swiggy's current data, the company fulfills approximately 20 lakh orders daily. With the new platform fee of ₹15, the company will earn an additional ₹3 crore daily. Earlier, this income was ₹2.4 crore at a fee of ₹12. This means the company can earn about ₹54 crore per quarter and approximately ₹216 crore annually in additional revenue.
Meanwhile, Zomato receives 23 to 25 lakh orders daily. With a fee of ₹12 per order, it will also generate an additional daily revenue of approximately ₹3 crore. On a quarterly basis, this could reach ₹45 crore and ₹180 crore annually.
When the Platform Fee Was Increased
Swiggy and Zomato first introduced the platform fee in April 2023, which was only ₹2 per order. After that, the fee gradually increased. Last year, on New Year's Eve, both companies increased the fee further due to the rising number of orders. Since then, this fee has mostly remained above ₹10. Companies generally increase the fee as a test on high-demand days and make it permanent if the order volume does not decrease.
Why the Fee Has Increased
The companies state that during the festive season, increased demand requires them to utilize additional resources. This is why the fee is increased. It is also a way to reduce losses and increase profits. Both Swiggy and Zomato are currently investing heavily in quick commerce and new services, which is leading to increased costs.
Swiggy's Latest Results
On July 31, Swiggy released its financial results. The company's loss increased by 96 percent to ₹1,197 crore, compared to ₹611 crore in the same period last year. The loss in the previous quarter was ₹1,081 crore. The primary reason for the loss is the significant investment made in Instamart, its quick commerce unit.
However, the company has seen a tremendous surge in revenue. In the April-June quarter, Swiggy's revenue increased by 54 percent to ₹4,961 crore, compared to ₹3,222 crore in the same period last year. This clearly indicates that the company's business model is growing rapidly, but the problem of losses still persists.
Impact on Customers
With the increase in platform fees, customers will have to pay more for each order. If a customer orders 20 times a month, they will now have to spend ₹300 solely on platform fees. This is why there is also dissatisfaction among consumers regarding this decision.
The number of orders increases significantly during the festive season. Companies try to leverage this opportunity to increase their revenue. However, it remains to be seen whether customers will continue to order in the same numbers even after the increased fee.
