Swiggy Teases Rs 10 Rise in Platform Fee

In a strategic move aimed at minimizing losses and improving financial viability in anticipation of its upcoming public listing later this year, Swiggy is said to be considering doubling its platform fee for food orders.

The suggested adjustment involves raising the current platform fee of Rs 5 to Rs 10 per food order and is a key element of Swiggy's ongoing initiatives to streamline its financial performance.

As per sources, Swiggy has reportedly commenced trials of the envisioned fee structure within its app, focusing on specific users.

This move follows the company's introduction of the platform fee model in April 2023, where an initial extra charge of Rs 2 was applied to specific food orders, irrespective of the order size.

Having noted that the supplementary fee did not negatively affect order quantities, Swiggy extended the platform fee to include all users.

Gradually, the company increased the fee to its present Rs 5, and certain customers continue to pay Rs 3, although the rationale behind the tiered system remains undisclosed by the company.

As per a spokesperson from Swiggy, "There have been no alterations to Swiggy's platform fee, and there are no imminent plans for a substantial increase. We consistently conduct minor experiments to gain a better understanding of consumer preferences. The recent trial was one such experiment, and its expansion in the future will depend on its success in aligning with our goal of providing the best service to our users. Continuously seeking ways to enhance affordability, our latest initiative, Pockethero, is an illustration of this commitment. Pockethero, tailored for budget-conscious consumers, is currently being rolled out nationwide."

Significantly, Zomato, a key rival of Swiggy, has similarly raised its platform fee from Rs 2 to Rs 5 in specific instances.

The implementation of an extra charge on each order has emerged as a prevalent tactic adopted by food delivery firms, aiding in bolstering their financial well-being, given the substantial daily order volumes managed by these platforms.

Although Swiggy has not formally introduced the Rs 10 platform fee, the company has previously hinted at higher amounts, temporarily reduced certain fees, and later raised charges.

This step-by-step strategy is anticipated to be employed if the intended outcomes are realized.

Swiggy's co-founder and group CEO, Sriharsha Majety, shared with the media at Davos, emphasizing the company's dedication to expansion. He highlighted that Swiggy Instamart, the rapid-commerce division, will be a central driver in the company's future growth.

While placing emphasis on Instamart, Swiggy remains committed to innovation within its food delivery sector by introducing more affordable food choices to appeal to a wider customer demographic.

As the platform fee trial progresses, both the industry and users will keenly observe Swiggy's strategy and its implications for the overall food delivery sector.