In a pioneering move within the quick-commerce landscape, Zepto, a hyperlocal delivery player, has unveiled a platform fee of Rs 2 per order, marking a significant shift in revenue generation strategies within the sector. This bold initiative positions Zepto as the first among its competitors to implement such a fee, setting a precedent for the industry.
Traditionally, platform fees have been more prevalent in mature sectors like e-commerce and food delivery. However, Zepto’s decision to introduce a platform fee signals a strategic pivot towards enhancing profitability and sustainability in the increasingly competitive quick-commerce market.
Unlike its competitors, Blinkit and Swiggy Instamart, which currently refrain from imposing platform fees on grocery orders, Zepto’s move reflects a proactive approach to revenue diversification. While nominal platform fees of Rs 2 were initially commonplace among food delivery platforms, there has been a gradual escalation in charges, with peak-hour fees reaching up to Rs 10 in some instances. This trend hints at the possibility of Zepto experimenting with higher fees in the future to capitalize on demand surges.
The introduction of the platform fee is not the sole adjustment Zepto has made to its pricing structure. The company has also implemented a ‘late night handling fee’ of Rs 15 for orders placed after 11 pm and revised its delivery fee policy, eliminating free deliveries for select users. With delivery fees ranging from Rs 5 to Rs 28 based on cart value, Zepto aims to optimize order profitability as it strives to achieve EBITDA positivity by May 2024.
In response to queries regarding these changes, a Zepto spokesperson emphasized the company’s commitment to operational efficiency and cost reduction as primary drivers of profitability. The introduction of Zepto Pass, its loyalty program, further underscores this commitment, offering subscribers free deliveries and enhanced discounts to incentivize higher engagement and spending on the platform.
Analysts note that while competitors like Blinkit and Swiggy Instamart may leverage their food delivery customer base to bolster quick-commerce offerings, Zepto’s singular focus on quick-commerce presents a unique advantage. The company’s aggressive expansion strategies, coupled with competitive pricing, have positioned it as a formidable contender in the market.
Despite the additional fees, consumer behavior remains largely unaffected for now. However, industry experts caution that continued fee escalation may eventually prompt consumer resistance, necessitating a delicate balance between profitability and consumer satisfaction in the evolving quick-commerce landscape.
