Food tech giant, Swiggy has raised its platform fee from INR 7 to INR 10 per order, a 43% increase, mirroring a similar move by rival Zomato.
Swiggy hikes platform fee to 400% since introduction
According to INC42, Swiggy started the platform fee in April 2023 at INR 2 per order. It raised the fee to INR 3 in October, then to INR 5 in April, and to INR 6 in July. The latest increase to INR 10 means a 400% rise since the fee was first introduced.
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This hike comes even though Swiggy said in January it had no plans for a major platform fee increase. While talking to INC42, a Swiggy spokesperson said at the time that the company was “running small experiments to better understand consumer choices” and had no plans for a significant increase in the near term.
Meanwhile, Swiggy’s fee increase is part of its effort to boost revenue ahead of its planned IPO. Recently, the company got shareholder approval to increase its IPO fresh issue size to INR 5,000 Cr from INR 3,750 Cr.
Zomato’s platform fee revenue surges to INR 75 Cr in Q2 FY25
Additionally, the platform fee is a major revenue source for food delivery companies. Zomato’s platform fee revenue rose to INR 75 Cr in Q2 FY25, up 41.5% from INR 53 Cr in Q1 FY25. Swiggy reported revenue of INR 11,247 Cr in FY24, with the food delivery business generating a GOV of INR 24,717 Cr. Swiggy’s losses decreased by 44% to INR 2,350 Cr in FY24 from INR 4,179.3 Cr in FY23.
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Furthermore, the fee hike fits with Swiggy’s new services, like Swiggy Bolt for 10-minute deliveries in six cities and Swiggy XL EV fleet for bulk orders in Gurugram. They’re also testing a premium membership, Rare Club, for high-end consumers. Swiggy did not comment on this.
With both Swiggy and Zomato implementing the INR 10 fee within a day of each other, the platform fee surge comes right before the festive season. Zomato mentioned in its app notification, “This fee helps us pay our bills to keep Zomato running.” To maintain services during the festive season, it has increased slightly.
