Your food deliveries on Zomato are about to become costlier
What's the story
Zomato has increased its platform fee from ₹10 to ₹12 per order, in view of the anticipated spike in demand during the festive season. The revised fee is exclusive of goods and services tax (GST). The move comes after Swiggy's recent hike, which raised its platform fee to ₹14 for select pin codes due to a surge in orders.
Fee introduction
Platform fee introduced in 2023
Both Zomato and Swiggy had introduced the platform fee in 2023 as a per-order levy on customers. The move is part of their strategy to boost profitability amid rising competition and financial pressures from investments in quick commerce. Despite the hike, industry experts believe it will help improve Zomato's take rates by 22 basis points for every rupee added to the platform fee.
Profit drop
Zomato's net profit fell by 90% in Q1
Despite a 70% jump in revenue, Zomato's parent company reported a sharp 90% year-on-year decline in consolidated net profit for the April-June quarter. The company posted a profit of ₹25 crore as compared to ₹253 crore during the same period last year. Meanwhile, Swiggy's quarterly losses widened to ₹1,197 crore due to investments in Instamart while its operating revenue rose by 54% to ₹4,961 crore.
Steps
Zomato testing other monetization strategies
Zomato has been testing other monetization strategies like rain surcharges during bad weather and a 'VIP Mode' for select customers. The firm has also introduced a 'long distance fee' payable on orders delivered beyond four kilometers.