Swiggy and Zomato Hike Platform Fees Amid Festive Season Demand

Food delivery majors Swiggy and Zomato have once again raised their platform fees in tandem, banking on an expected spike in orders during the festive season. The two rivals, who collectively dominate India’s food delivery landscape, are counting on this additional fee to strengthen revenues and offset rising costs in other segments.

Swiggy Raises Platform Fee to ₹15

Bengaluru-headquartered Swiggy has raised its platform fee three times in as many weeks, with the latest hike taking it to ₹15 per order inclusive of GST. With a daily order volume of nearly 20 lakh, this translates to ₹3 crore in daily collections from platform fees alone. For Swiggy, the timing of the festive season surge provides an opportunity to capture additional earnings while demand is at its peak.

Zomato Matches with 20% Hike

Zomato, owned by Eternal Ltd., has implemented a similar strategy by raising its platform fee by 20%, bringing it to ₹12 per order (excluding GST). With daily orders in the range of 23-25 lakh, Zomato too is positioned to generate approximately ₹3 crore a day purely from platform fees. The near-parallel fee structures of both companies underscore the intensity of competition in India’s food-tech industry, where pricing power has become an important lever.

The Pressure of Quick Commerce

Despite the strong order volumes and revenue growth, both Swiggy and Zomato continue to face significant cost pressures. Their quick commerce businesses—Swiggy Instamart and Zomato’s Blinkit—remain loss-making units. These ventures, while fast-growing and strategically important, are highly cost-intensive due to logistics, warehousing, and rapid delivery commitments. This persistent financial strain is pushing the companies to rely more heavily on incremental revenue streams such as platform fees.

Financial Performance in Focus

Recent financial results highlight the contrasting realities faced by both companies. For the quarter ended 30 June, Swiggy reported a widened loss of ₹1,197 crore, even though its operating revenue jumped 54% to ₹4,961 crore. Zomato, on the other hand, posted a sharp 90% decline in profit, down to ₹25 crore, despite a 70% surge in revenue to ₹7,167 crore. These numbers underline the challenge of balancing growth with profitability in India’s competitive food delivery sector.

What is a Platform Fee?

A platform fee is an additional charge levied on customers over and above the cost of items, delivery charges, restaurant charges, surge pricing, packaging, and GST. It appears separately in the bill breakdown and is designed to help cover operational costs. Importantly, platform fees improve EBITDA margins and unit economics while also compensating for losses from other ventures like quick commerce.

Why Platform Fees Matter Now

The festive season, marked by a sharp rise in food delivery orders, provides an ideal window for Swiggy and Zomato to benefit from higher platform fees without significantly impacting customer demand. For the companies, it is a relatively small charge per order but, at scale, it generates significant revenues. This model has quickly become a vital element of their strategy to achieve financial stability.

Consumer Impact and Market Response

From a consumer perspective, the rise in platform fees adds to the overall cost of ordering food online, although the increase per order remains marginal in absolute terms. For investors, however, this move signals a pragmatic approach to enhancing earnings. On Wednesday, shares of Swiggy’s parent and Eternal Ltd. both recorded gains—up 1.19% and 1.16% respectively—outperforming the benchmark Sensex, which rose 0.51%.

Strategic Balancing Act

Swiggy and Zomato are walking a fine line between maintaining affordability for customers and ensuring long-term profitability. While platform fees may not drastically deter customers in the short run, sustained hikes could test price sensitivity in the highly competitive Indian market. At the same time, this strategy reflects an urgent need to shore up margins and counterbalance the losses of quick commerce operations.

Looking Ahead

As the festive season progresses, Swiggy and Zomato are likely to enjoy strong order volumes and steady fee-driven revenues. However, whether these gains are sufficient to offset the financial drag of their quick commerce arms remains uncertain. For now, platform fees have emerged as a crucial tool in their playbook, providing a much-needed cushion against rising operational costs and slowing profits.