Swiggy's Platform Fee Aims To Reduce Costs, But Will It Affect Its Market Share?

Food delivery giant, Swiggy has begun adding a “platform fee” of ₹2 per order for all users, regardless of the cart value, in a bid to control its costs.

What Happened? Swiggy is currently charging these additional fees only on food orders and not on Instamart orders, according to a report by MoneyControl. This fee is separate from convenience/handling fees for food delivery and is being levied on all users, including Swiggy One customers.

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Sriharsha Majety, Swiggy’s CEO and co-founder, said that the company has to identify efficiencies to ensure its long-term sustainability due to the slowdown in the delivery business, with the growth rate for food delivery slowing down versus projections.

Swiggy’s rivals, Zomato, have not introduced any platform fees on their platform yet, but analysts at HSBC have noted that the introduction of additional fees could help Swiggy lower its cash burn, which is higher than Zomato’s, by improving its app features to deliver a seamless app experience.

HSBC’s analysts predict that by the end of the current fiscal year, Zomato’s market share would likely increase to 57%, while Swiggy’s would reduce to 43%.

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Posted In: RestaurantsGeneralSwiggyZomato