Swiggy introduces platform fee for food orders amidst stagnant growth

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[/highlights]

  • Swiggy introduces a ₹2 per order platform fee for food orders in Bengaluru
  • The fee will create a significant corpus for Swiggy to reinvest in the business
  • Platform fees are common globally and in India, used to improve user experience and generate revenue
Highlights

In a bid to control costs, Swiggy has recently introduced a new “platform fee” of ₹2 per order, which will be applied uniformly regardless of the order’s total value. This move comes amidst stagnant growth as the company seeks to streamline its operations and improve profitability.

This fee is being charged only for food orders in Bengaluru at the moment. The company plans to roll out the scheme in other regions, including Delhi and Mumbai, soon. Swiggy has stated that the fee will be used to enhance the app experience and improve platform features, with the aim of delivering a seamless ordering experience for customers.

Swiggy Platform Fee

While the fee is currently limited to food orders, analysts believe that it could potentially be extended to e-commerce and other services offered by Swiggy, such as Instamart, which provides on-demand grocery deliveries. However, for now, the company has made it clear that the platform fee is separate from the handling fees levied on Instamart orders.

Despite the nominal amount charged per order, the platform fee is expected to generate a significant corpus for Swiggy, which delivers over 1.5 million orders every day. This corpus will likely be reinvested back into the business to drive growth and improve profitability, which has been a challenge for the company in recent times due to high competition and rising costs.

The introduction of the platform fee is not unique to Swiggy, as similar charges are common globally and in India on other platforms such as BookMyShow, PhonePe, and FoodPanda. The fee is used to provide customers with the best user experience possible, and as a way to generate revenue to reinvest in the platform’s development.

While the new fee may not sit well with some customers, Swiggy’s spokesperson has assured that it will lead to an improved app experience, which should ultimately benefit both customers and the company. As the food delivery market in India continues to grow, it remains to be seen how other players in the industry will respond to Swiggy’s move and whether they will follow suit with their own platform fees.

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