Before Diwali Celebrations, Swiggy and Zomato have Raised Their Platform Fees to INR 10

Nitin Konde, Varun Bhardwaj

Oct 25, 2024 — 3 min read

Swiggy and Zomato Increase Platform Fees

According to various reports, food delivery firm Zomato raised its platform charge by almost 43% before Diwali celebrations, from INR 7 to INR 10 per order, in order to "keep Zomato running" and preserve services during the holiday season. Similarly another media report cited that Swiggy, another major competitor in the sector, also raised its fee to INR 10. The current charge for these platforms is 400% higher than the INR 2 per order platform fee that was first implemented in August 2023.

In places like Delhi and Bengaluru, Zomato raised their platform cost by 20% earlier in July, from INR 5 to INR 6 per order. According to Zomato's annual report for the fiscal year 2022–2023, 647 million orders were placed overall. According to a rough estimate, the business may make an additional INR 5.7 million a day if the platform raise were implemented nationwide.

Food Lovers Express Their Disappointment at X

During the holiday rush, Zomato and Swiggy raised their platform fees, which infuriated foodies. Although the move to raise the platform charge did not sit well with users, the nation's two largest food delivery apps are aiming to profit from an increase in orders during the holiday season.

The updated platform charge was the subject of debate on social networking site X. Ordering in has become too costly to be sustainable, as noted by several X users, and meal delivery fees have been steadily rising.

In August 2023, Zomato started charging INR 2 per order as a platform charge. Zomato increased the platform fee to INR 4 per order by January 2024. At the moment, each order costs INR 10. All users, including Gold members, are subject to the platform fee, which is in addition to Zomato's delivery fee.

The Platform Fee Does Not Have a Set Formula

Zomato's Chief Financial Officer, Akshant Goyal, stated during the company's first quarter earnings call for FY25 that the platform charge is being changed "step by step" in order to determine how sensitive customers are to price adjustments. There is no set formula for the platform fee, Goyal had stated at the time, in reference to the likelihood of greater fees on days when there are more orders.

Zomato’s Current Financial Performance

On October 22, Zomato, headed by Deepinder Goyal, released its September quarter results. The company's operating revenue increased 68% year over year to INR 4,799 crore. The fastest-growing quick commerce sector was the main driver of the total growth, although Zomato's biggest source of income and profits, the meal delivery company, had a 21% increase in gross order value year over year to INR 9,690 crore.

Because it was a seasonally bad quarter, Zomato's food delivery company saw take rates drop sequentially by 20 basis points to 24.1% during the July–September period. According to industry observers, there is little chance that the rise in platform fees imposed by food delivery businesses will affect customer behaviour. According to Zomato's fiscal 2024 annual report, platform fees brought in INR 83 crore for the company.