Groceries get costlier as Instamart, Zepto, Blinkit add new charges
What's the story
Leading quick commerce platforms in India are introducing new charges to improve their profitability. The Economic Times reported that companies like Swiggy Instamart, Zepto, and Blinkit are adding a range of fees and handling charges. These include basket size levies, small-order surcharges, and weather-related fees such as rain charges. The move comes as part of their strategy to boost unit-level profitability.
Fee increase
Fee on orders below certain threshold
Starting this month, popular quick commerce apps like Zepto and Blinkit have increased charges on orders below a certain minimum order value (MOV). The new charges are in addition to the existing platform and service fees. For instance, Zepto has introduced a handling fee for orders under ₹175. Swiggy's quick commerce arm Instamart has also revised its MOV to ₹99.
Additional charges
Surcharge during peak hours
Along with a "quick delivery" charge, Eternal-owned Blinkit also levies additional fees on bulk orders or discounted purchases. In some cases, these platforms even apply higher handling fees on larger carts. Customers may also face a surgecharge during peak hours or when delivery workers are in short supply and the order value is below a certain threshold.
Profitability strategy
Fee hikes aimed at improving platforms' take rates
The fee hikes and policy changes are expected to improve platform "take rates," according to analysts at JM Financial. Take rates refer to the ratio of a platform's revenue to the total gross value of orders. Industry executives have admitted that rising delivery charges are starting to affect how platforms balance their earnings from customers with payments made to gig workers for last-mile delivery services.
Financial challenges
Despite these measures, market leaders continue to post losses
Despite these measures, market leaders in the sector continue to face operational losses. For instance, Blinkit posted an operational loss of ₹178 crore for the January-March quarter. During the same period, Instamart's gross order value (GOV) doubled year-on-year to ₹4,670 crore, marking a 19.5% rise quarter-on-quarter. However, adjusted EBITDA losses for the segment widened sharply to ₹840 crore—up from ₹307 crore a year ago and ₹578 crore in the previous quarter.