Zomato Increases Platform Fee by 33 percent in Major Markets

Zomato, the online food delivery giant, has implemented a 33% hike in its platform fee for users in important markets, raising it to Rs 4 per order from the earlier Rs 3.

On New Year's Eve, the company temporarily increased the fee to a maximum of Rs 9 per order in specific markets. This fee surge aligned with Zomato's high order volume on December 31.

CEO Deepinder Goyal shared on X that the order volumes surpassed the combined figures of the previous six years' New Year's Eve, spanning from 2015 to 2020.

The Gurugram-headquartered company implemented a uniform flat platform fee in August 2023, initially set at Rs 2 per order and subsequently raised to Rs 3 in most significant markets.

Likewise, Zomato's competitor, Swiggy, initiated a Rs 2 fee last year, later upping it to Rs 3.

As per the report, Zomato applies the platform fee on top of the delivery charge. Nevertheless, this delivery fee is exempted for participants enrolled in its loyalty program, Zomato Gold, where members pay an initial fee and gain benefits like discounts and complimentary deliveries. The platform fee is also applicable to Zomato Gold members.

During the July-September quarterly results, Zomato's leadership correlated the improvement of its take rate, which signifies the percentage of revenue earned per food delivery order, with the introduction of the platform fee.

In the September 2023 quarter, Zomato announced a post-tax profit of Rs 36 crore. The company notified its shareholders, via a filing, that the revenue from operations surged by 71% in Q2 FY24, hitting Rs 2,848 crore.

This expansion was driven by a 47% increase year-over-year in gross order values (GOV) encompassing food delivery, quick commerce segments, and activities related to dining out and live events.