Zomato's platform fee contributed ₹83 crore to its annual revenue
What's the story
Zomato, a leading food delivery service, has collected ₹83 crore in platform fees from customers until March, as per its annual report. The company initiated this fee in August last year, initially charging ₹2 per order. However, it has since increased the charge to ₹6 in key markets. This strategy was implemented to offset the cost of providing free delivery on Gold orders and boost profitability.
Revenue growth
Platform fee boosts adjusted revenue
The platform fee has significantly contributed to Zomato's Adjusted Revenue, which experienced a year-on-year (YoY) growth of 27% to ₹7,792 crore in FY24. The annual report stated, "Adjusted Revenue as a percentage of GOV (gross order value), continued to increase primarily due to increase in restaurant commission take-rates, improvement in ad monetization and introduction of platform fee from Q2FY24 onwards."
Information
Zomato's strategy mirrors industry trends
Zomato's main rival, Swiggy, also imposes a platform fee on its orders. This indicates that such strategies are becoming increasingly common among food delivery aggregators. The aim is to enhance profitability while balancing customer satisfaction with cost-effective service delivery.
Consumer behavior
Ordering patterns revealed in annual report
Zomato's annual report also provided insights into customer ordering habits. It revealed that the majority of late-night orders in the last fiscal year (FY) were from Delhi NCR, while most breakfast orders originated from Bengaluru. These trends offer a glimpse into regional preferences and habits, potentially influencing future business strategies for food delivery services like Zomato.