The food delivery giant Swiggy has begun charging a small “platform fee” of Rs 2 per order to all users. The expense has been forced paying little heed to truck esteem, meaning you can have five things or just a single request in your truck, yet you will in any case be charged Rs 2. Your order quantity or the amount in your cart will not affect how much the fee is.
The move is part of Swiggy’s effort to boost revenue and cut costs, both of which have been impacted by the food delivery industry’s slowdown. The additional fee was initially made available to customers in Bengaluru and Hyderabad, but it has not yet been made available to customers in major cities like Mumbai and Delhi. The platform fee is currently only applied to food orders and is not yet applied to quick-commerce or Instamart orders.
Sriharsha Majety, co-founder and CEO of Swiggy, attributed the platform fee introduction to the slowdown in the delivery business, which has impacted the company’s growth rate. “The growth rate for food delivery has slowed down versus our projections (along with many peer companies globally)â€æ. While our cash reserves allow us to be fundamentally well-positioned to weather harsh circumstances, we cannot make this a crutch and must continue identifying efficiencies to secure our long-term life,” Majety said in an email to employees.
Analysts believe that Swiggy’s over 1.5 million daily orders could generate a significant corpus from the platform fee, despite the fact that it may appear insignificant. Additionally, the company will be able to better control its expenses because the fee is expected to soon be extended to additional regions.
Swiggy’s adversary, Zomato, has likewise confronted the effect of the business wide stoppage. In the company’s October-December quarter results, Zomato’s CFO, Akshant Goyal, mentioned this, stating that the trend had been observed across the nation, but more so in the top eight cities. Nonetheless, Zomato has not yet presented any stage charges.
Swiggy’s cash burn, which is significantly higher than that of Zomato, is expected to decrease as a result of the introduction of the additional fee.
A spokesperson for Swiggy has confirmed that the platform fee is a small, one-time fee for food orders. Compared to Zomato’s over Rs 4,100 crore (approximately 550.3 million USD) in revenue, Swiggy generated approximately Rs 5,700 crore (approximately 763.4 million USD).