Swiggy is considering doubling its platform fee on food orders from ₹5 to ₹10, in a move to cut losses ahead of its public listing later this year.
What Happened? Initially, the Bengaluru-based company had introduced a modest ₹2 fee on some orders, testing the waters. After observing that this did not deter customers, Swiggy started charging a platform fee across the board, which currently stands at ₹5 for most users.
However, as MoneyControl’s report highlights, the company charges not all customers the same; some still only pay ₹3. The company has not elaborated on this tiered approach to fees. Like Swiggy, its rival Zomato has also raised its platform fee, though the amount varies.
Adding a small fee to each order helps improve the financials of these companies, which handle millions of food orders daily. Swiggy has flirted with the idea of a ₹10 fee before, initially introducing a higher fee and then offering discounts, only to increase it later. While the company has not committed to this increase yet, it is one of several experiments they’re conducting.
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Is this just an experiment? Speaking to MoneyControl, Swiggy’s spokesperson stated that the company conducts these trials to better understand consumer preferences and may not widely implement them. This experimentation comes as the food-delivery market’s growth slows down.
Sriharsha Majety, Swiggy's co-founder and CEO, highlighted that Swiggy Instamart, their quick-commerce arm, is expected to drive the company’s future growth. To keep the food delivery side thriving, Swiggy is introducing more affordable food options through its Pockethero offering, targeting budget-conscious consumers.
As Swiggy gears up for its IPO, it's not alone in exploring additional fees. Zomato, another major player, had initially said it wouldn’t introduce a platform fee but followed Swiggy’s lead soon after. In a strategic move, Zomato even raised its fee to ₹9 in some markets to capitalize on high order volumes during New Year's Eve.
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