Zomato Hikes Platform Fee to 25%

Business View
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Zomato Hikes Platform Fee to 25%

To achieve high earnings over a quarter, India’s leading food delivery company, Zomato has increased its platform fee. With the revised costing platform fee, the order on the platform will automatically get on the higher side. That means ordering food from this platform to get costlier. According to the reports, Zomato has hiked the platform fee that will be applicable from Sunday, 20 April 2024 onwards. This platform fee will now charge 25 per cent to ₹5 per order from its customers.  

The app of the company has officially shared the information about the hike in platform fees. The revised charges have surged in cities like the National Capital Region, Lucknow, Mumbai, Bengaluru, and Hyderabad. All these cities are the key markets of a Gurugram-based company. Since the introduction of the platform fee in the Zomato app, it is the fourth time the charges have been revised. Earlier, the company had raised the platform fee for users on 1 January 2024 which was between ₹3 to ₹4. 

In the meantime, Blinkit, a quick-commerce platform acquired by Zomato takes a handling charge of ₹2 on every order

Swiggy And Zomato Has Now Similar Platform Fees

The main rival of the company, Swiggy charges ₹5 in the form of platform fees on food-delivery foods. However, some users claim that a Bengaluru-based company is charging a platform fee of Rs 10. Moreover, The platform fee charged by the users of the food delivery apps is different from the delivery charges. However, those users who have opted for a Zomato Gold loyalty programme are not required to pay for the delivery charges, although it doesn’t mean that they are freed from the platform fees. Despite having a Zomato Gold loyalty programme, the users need to pay the platform fees.  

Zomato Has Changed Platform Charges Multiple Times 

The leading food delivery company in India started taking the platform fees from its users in August 2023. At that time the platform fee was ₹2 per order. Soon after in October 2023, Zomato increased its platform fee to ₹3 and then in January 2024, the charges stood at ₹4. Now in April 2024, the company again increased the charges which now stood at ₹5. 

According to the reports, Zomato processes between 2 and 2.2 million orders daily, which gives the idea that increasing ₹1 in platform fees will automatically increase the profits in its revenues. 

Also Read: Infosys Q4FY24 Results: Net Profit Jumps to ₹7,975 Crore

After introducing the platform fees, the company found a profit in its quarterly earnings. With leveraging charges fees from users in August, the quarterly profits increased to new heights. The quarterly profit of the company for the final quarter was ₹138 crore in comparison to the 3rd quarter which was ₹36 crore. In the fiscal year 2023, December quarter, Zomato had to achieve a loss of ₹347 crore. Besides it, Industry insiders had earlier predicted that the January hike in platform fees could aid Zomato offset a substantial tax demand of over Rs 402 crore from goods and services tax authorities. 

Apart from that, the operating revenue of Zomato for the third quarter of fiscal year 2024 was 69% year-on-year (YoY) to ₹3,288 crore- on a consolidated basis.

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