In a strategic move to boost revenues, Zomato, the renowned food delivery platform, has increased its platform fee to INR 4 per order across major cities, up from the previous INR 3. The revised rates, effective from January 1, were confirmed by information available on the Zomato app.
The decision follows a temporary surge in platform fees during New Year’s Eve, with certain markets witnessing fees as high as INR 9 per order. Responding to queries, a Zomato spokesperson explained, “These are business calls which we take basis various factors from time to time,” as reported by ET.
Notably, Zomato experienced a record-high order volume on New Year’s Eve, surpassing the combined number of orders from the past six years. CEO Deepinder Goyal shared this milestone on X, indicating the platform’s continuous growth and popularity.
Zomato introduced platform fees in August last year, initially starting at INR 2 and later increasing it to INR 3 across major markets. Its competitor, Swiggy, also adopted a similar strategy, initiating a fee of INR 2, later raised to INR 3. Both platforms apply the platform fee in addition to the delivery charge, though it is waived for customers enrolled in their loyalty programs, while Zomato Gold and Swiggy One members are still subject to the fee.
Blinkit, Zomato’s quick commerce arm, also charges a platform fee of INR 2 per order. While the fee may be unpopular among users, it has significantly contributed to the revenues of food delivery startups. Zomato, in its July-September quarterly results, attributed the improvement in its take rate (percentage of revenue per order) to the platform fee.
Jefferies’ November research note indicated that Zomato’s take rate in the September quarter of FY24 was 24.1%, showing an improvement of 28 basis points from the previous year and 32 basis points from the preceding quarter. The platform fee has played a pivotal role in Zomato’s recent profitability, reporting a profit after tax of INR 36 Cr in the quarter ending September 30, 2023, and INR 2 Cr in the April-June quarter.
As of Monday (January 1), Zomato’s shares concluded trading 0.7% higher at INR 124.50 on the BSE, reflecting investor confidence in the platform’s strategic decisions and financial performance.
