Swiggy and Zomato hike platform fees to Rs 6 in certain areas to improve bottomline
Swiggy and its peer Zomato have again hiked platform fees after launching at just Rs 2 last year as both the players try to improve profitability without losing market share.
Foodtech platforms Swiggy and Zomato have hiked platform fees by 20% to Rs 6 in high traction markets including Bengaluru and NCR to improve their bottom lines.
Shares of Deepinder Goyal-led Zomato opened higher and rose 2.44% to Rs 227.9 a piece during the late hours of morning trade. Zomato recently increased its platform fee to Rs 5 per order from Rs 4 in key markets including the National Capital Region, Bengaluru, Mumbai, and Hyderabad.
Swiggy and Zomato did not respond to queries sent by Yourstory.
Both companies launched a platform fee of Rs 2 last year as the company focused on profitability along with growth and penetration and has increased it gradually. Platform fees are a way for companies to improve their bottom line by raising the amount of money they make on every transaction. With only two players in the game, IPO-bound Swiggy and its listed peer Zomato focus on improving their take rates.
These platforms were previously charging Rs 5 per transaction, which is still the case for some transactions on Swiggy. However, Sriharsha Majety-led Swiggy is even hinting at a higher fee by displaying it as Rs 7 and striking it off to Rs 6 on every transaction.
Their quick commerce arms, Blinkit and Instamart also charge an equivalent of a platform fee under the name handling charges. The platforms also add high surge fees and rain fees for some orders. Zomato’s Blinkit charges handling charges of Rs 4 on every order on top of a delivery fee of Rs 16 or Rs 30 based on cart value.
Swiggy’s Instamart charges a handling fee, which is marked as being inclusive of GST, of Rs 5 on every transaction. Their quick commerce competitor Zepto charges a handling charge of Rs 9.99 on every order on top of GST which is added to the cart total.
Zomato finished the previous quarter with a profit of Rs 175 crore. At the same time, Swiggy, which has confidentiality filed for IPO with SEBI, is focusing on retaining positive investor sentiment with its profitability efforts.
Edited by Affirunisa Kankudti