In a strategic move to cut losses and enhance profitability ahead of its anticipated public listing later this year, Swiggy, the popular food and grocery delivery platform, is reportedly contemplating doubling its platform fee on food orders. The proposed increase would see the platform fee surge from the current Rs 5 to Rs 10 per food order. This potential adjustment is part of Swiggy’s ongoing efforts to optimise its financial performance.
According to media reports, Swiggy has already begun testing the proposed fee structure on its app, targeting select customers. This comes after the company initiated the platform fee concept in April 2023, initially charging an additional Rs 2 on certain food orders, regardless of the cart size.
Observing that the additional fee did not adversely impact order volumes, Swiggy expanded the platform fee to all customers. Over time, the company incrementally raised the fee to the current Rs 5, with some customers still paying Rs 3, although the tiering system remains unexplained by the company.
Notably, Swiggy’s competitor, Zomato, has also increased its platform fee from Rs 2 to Rs 5 in certain cases. The introduction of an additional fee on every order has become a common strategy among food delivery companies, contributing to improved financial health, considering the substantial daily order volumes handled by these platforms.
While Swiggy has not officially implemented the Rs 10 platform charge, the company has previously teased higher amounts, temporarily discounted some fees, and subsequently increased charges. This iterative approach is expected to be followed if the desired results are achieved.
What Swiggy Says
A swiggy spokesperson has been quoted in the media, stating that Swiggy has not changed its platform fee, and has no plans for a significant increase in the near term. “This was an experiment to understand consumers better, and we may or may not scale it up in the future if it doesn’t meet our goal of serving our users in the best way possible.”
Swiggy’s co-founder and group CEO, Sriharsha Majety, recently spokes to the media at Davos and said that the company’s commitment to growth, indicating that Swiggy Instamart, the quick-commerce arm, will play a pivotal role in the company’s future expansion.
Despite focusing on Instamart, Swiggy continues to innovate within its food delivery segment, introducing lower-priced food options to attract a broader customer base. As the platform fee experiment unfolds, the industry and users alike will closely monitor Swiggy’s approach and its impact on the overall food delivery landscape.
