Swiggy, the popular food delivery giant in India, has recently started charging a nominal platform fee of Rs 2 per order for all its users. The fee will be imposed on food orders regardless of the cart value, and it will not increase as per the order quantity or the cart value. The move is aimed at improving Swiggy’s revenue and reducing its costs, which have been affected by the slowdown in the food delivery business.

The additional charge was initially introduced for users in Bengaluru and Hyderabad and is yet to be rolled out in major cities such as Mumbai and Delhi. However, it is expected to be extended to other regions soon, which will help Swiggy manage its costs. Sriharsha Majety, Swiggy’s CEO and co-founder, mentioned that the platform fee introduction is due to the slowdown in the delivery business, which has impacted the company’s growth rate.

While the platform fee may seem small, analysts suggest that it could generate a significant corpus for Swiggy, given that the company delivers over 1.5 million orders daily. Furthermore, the fee is only being levied on food orders and not on quick-commerce or Instamart orders yet. This introduction of the additional fee is expected to help Swiggy lower its cash burn, which is significantly higher than that of its rival, Zomato.

Zomato, too, has faced the impact of the industry-wide slowdown, as mentioned by its CFO, Akshant Goyal, in the company’s October-December quarter results. However, Zomato has not yet introduced any platform fees. In terms of revenues, Swiggy was larger at around Rs 5,700 crore, compared to Zomato’s revenue of over Rs 4,100 crore.

It is interesting to note that while Swiggy’s introduction of a platform fee may seem like a small change, it is indicative of the significant changes that are taking place in the food delivery business. With the industry-wide slowdown, companies such as Swiggy and Zomato are looking to reduce their costs and improve their performance. The introduction of a platform fee is just one of the many strategies that companies are adopting to navigate the current business environment.

Swiggy’s introduction of a nominal platform fee of Rs 2 per order is a move aimed at improving the company’s revenue and reducing its costs. While the fee may seem small, it could generate a significant corpus for Swiggy and help the company manage its costs. With the industry-wide slowdown, companies such as Swiggy and Zomato are looking for ways to navigate the challenging business environment and remain profitable.

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