Swiggy , which is Bengaluru based food delivery aggregator and grocery shopping unicorn , is trying to test a possibility of doubling down the platform fee from ₹5 to ₹10.
Similar move was seen in April 2023 when it introduced a nominal fee of ₹2 for a few customers and later expanded it to all customers.Again in October previous year, Swiggy hiked the platform fee on food delivery orders to ₹5 per order, also marking a 50 percent jump then, first implemented in Hyderabad and Bengaluru, but later extended to all areas of operation throughout the country.
The move by unicorn comes at a time when the food-delivery market is experiencing slower growth & seen as a calculated effort to lower the losses as the company gears up for its upcoming initial public offering (IPO) later this year, as per the report.
Spokesperson of Swiggy said that the company currently has no intention of changing the platform fee , but we are always trying small experiments to better understand the customer choices.We’re always looking for ways to make our platform more affordable.
Supporting the above the statement , Co-founder and group CEO Sriharsha Majety highlighted the importance of Swiggy Instamart as a growth driver, highlighting the company’s efforts to make itself more affordable, as seen in the introduction of Pockethero.
Catching up the ‘platform’ with the Competition ……..
Zomato, which initially had no intention to levy a platform fee but later followed Swiggy’s path. The move to levy a fee reflects the challenges faced by food delivery companies in a dynamic market.
As the market continues to grow , Both Swiggy and Zomato have experienced success with nominal fees, and finding the right balance is critical to maintaining customer satisfaction and order frequency.
Notably, platform fee is considered as a measure to improve unit economics – a reference to the revenue generated by an entity from each unit of sale or order.
Companies such as Uber, BigBasket’s BB Now, and Zepto have been already taking this charge on each order.
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