Bengaluru-based food delivery giant Swiggy is reportedly testing the waters for a potential doubling of its platform fee from ₹5 to ₹10 per food order, according to a recent report by Moneycontrol. This strategic move is believed to be an effort by the company to mitigate losses in anticipation of its upcoming initial public offering later this year.
Swiggy has discreetly started suggesting the potential fee increase on its app, specifically targeting a "small set" of users. This echoes a similar strategy deployed in April 2023 when the platform introduced a nominal fee of ₹2 for select customers before extending it to all users. The current fee stands at ₹5.
In response to the speculation, a Swiggy spokesperson stated, "Swiggy has not changed its platform fee and has no plans for a significant increase in the near term. We're always running small experiments to better understand the consumer’s choices.", reported Mint.
The timing of Swiggy's move is significant, given the current slowdown in the food delivery market. Co-founder and group CEO Sriharsha Majety emphasized the importance of Swiggy Instamart as a growth driver, underscoring the company's commitment to affordability, exemplified by the introduction of Pockethero.
Swiggy's pursuit of expanding its user base aligns with its IPO plans later this year, a goal shared by industry competitor Zomato. Zomato, initially hesitant to implement a platform fee, eventually followed in Swiggy's footsteps. The decision to levy a fee highlights the challenges faced by food delivery companies in a dynamic and evolving market.
Also Watch: India now ranks fourth globally in stock market capitalization, surpassing Hong Kong