Zomato will now charge Rs 12 platform fee for every order, a 20% hike ahead of festive season

Deepinder Goyal-led food delivery giant Zomato has increased the platform fee on food delivery orders to Rs 12 per order from Rs 10, a move timed with the expected surge in demand during the festive season.

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The fee, which excludes goods and services tax (GST), is part of a broader trend among online food delivery firms to bolster margins as growth in the segment slows.

Interestingly, Swiggy has also raised its platform fee to Rs 15, inclusive of GST, in select pin codes.

The platform fee, a levy introduced in 2023 by both Zomato and Swiggy, has steadily risen from Rs 2 at inception to the current level. The strategy of raising the fee ahead of peak seasons and retaining the higher rate afterward has become a recurring practice.

“For every rupee added to the platform fee, Zomato’s take rates improve by about 22 basis points. This accelerates the company’s target to hit 5% adjusted Ebitda,” said Karan Taurani, executive vice president at Elara Capital. He noted that the fee on Zomato has increased sixfold since its introduction.

With 2.3 million to 2.5 million daily orders, the new Rs 12 fee translates to about Rs 3 crore in revenue every day. 

The Gurugram-based company reported a 16% year-on-year increase in gross order value to Rs 10,769 crore in the April-June quarter, slower than the 20% plus growth rates it recorded in previous quarters.

Parent company Eternal posted consolidated revenue of Rs 7,167 crore, up 70% from a year earlier, but net profit dropped 90% to Rs 25 crore from Rs 253 crore due to higher investments and rising costs.

The company’s quick commerce arm Blinkit was the standout performer, with net order value climbing 127% year-on-year and 25% sequentially to Rs 9,203 crore, overtaking food delivery for the first time. 

Swiggy, meanwhile, saw its losses widen to Rs 1,197 crore in the June quarter even as revenue rose 54% to Rs 4,961 crore, largely on account of continued spending on Instamart. Both firms are doubling down on quick commerce to offset slower growth in food delivery.