zomato platform fee: Zomato hikes platform fee it charges users by 33% across key markets

On Sunday, New Year’s Eve, the Gurugram-based company had temporarily upped the fee to as high as Rs 9 per order in certain markets.

Zomato’s deliveries hit an all-time high on December 31 with the company saying it surpassed the combined numbers it clocked for New Year Eve’s for 2015, 2016, 2017, 2018, 2019 and 2020, chief executive Deepinder Goyal wrote in his social media posts.

The listed firm started levying a flat platform fee in August 2023. Initially, it was Rs 2 per order, and was subsequently increased to Rs 3 in most of its major markets.

“These are business calls which we take basis various factors from time to time,” a Zomato spokesperson told ET on the platform fee hike, but did not provide further details.

Zomato’s closest rival, Bengaluru-based Swiggy, too, last year began charging a Rs 2 fee, which was later hiked to Rs 3.

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Zomato levies the platform fee in addition to a delivery charge, which is waived for customers of its loyalty programme, Zomato Gold, who make an upfront payment and get benefits such as discounts and free delivery. The platform fee, however, is applicable to Zomato Gold members as well.Zomato-owned quick-commerce platform Blinkit levies a handling charge of Rs 2 on every order.

In its July-September quarterly results, Zomato’s management had attributed the improvement in its take rate — or the percentage of what the company makes on every order — for food delivery to the introduction of the platform fee.

According to a research note by Jefferies in November, Zomato’s take rate in the September quarter of fiscal 2024 was 24.1%, improving 28 basis points (0.28 percentage point) from a year earlier and 32 basis points from the previous three-month period.

The report estimated Zomato to have delivered around 190 million orders during the quarter, 14% higher from the same period last year.

The three-month period ended September 30 saw Zomato post its second consecutive quarterly net profit. It reported a profit after tax of Rs 36 crore during the quarter. In the April-June quarter, it had reported a net profit of Rs 2 crore.

On October 10, ET reported, citing a UBS report that customers of food-delivery and quick-commerce platforms were broadly agnostic to marginal increases in costs and that such non-delivery fees provided a revenue upside and helped unit economics for the companies.

ET had reported on September 2 that several consumer-focussed internet platforms, including Uber, BigBasket’s quick-commerce vertical BB Now and Zepto were levying a per order, or per booking, fee to improve their unit economics.

Shares of Zomato were trading 0.8% higher at Rs 124.70 on the BSE Monday afternoon.

On Sunday, New Year’s Eve, the Gurugram-based company had temporarily upped the fee to as high as Rs 9 per order in certain markets.

Zomato’s deliveries hit an all-time high on December 31 with the company saying it surpassed the combined numbers it clocked for New Year Eve’s for 2015, 2016, 2017, 2018, 2019 and 2020, chief executive Deepinder Goyal wrote in his social media posts.

The listed firm started levying a flat platform fee in August 2023. Initially, it was Rs 2 per order, and was subsequently increased to Rs 3 in most of its major markets.

“These are business calls which we take basis various factors from time to time,” a Zomato spokesperson told ET on the platform fee hike, but did not provide further details.

Zomato’s closest rival, Bengaluru-based Swiggy, too, last year began charging a Rs 2 fee, which was later hiked to Rs 3.

Discover the stories of your interest

Zomato levies the platform fee in addition to a delivery charge, which is waived for customers of its loyalty programme, Zomato Gold, who make an upfront payment and get benefits such as discounts and free delivery. The platform fee, however, is applicable to Zomato Gold members as well.Zomato-owned quick-commerce platform Blinkit levies a handling charge of Rs 2 on every order.

In its July-September quarterly results, Zomato’s management had attributed the improvement in its take rate — or the percentage of what the company makes on every order — for food delivery to the introduction of the platform fee.

According to a research note by Jefferies in November, Zomato’s take rate in the September quarter of fiscal 2024 was 24.1%, improving 28 basis points (0.28 percentage point) from a year earlier and 32 basis points from the previous three-month period.

The report estimated Zomato to have delivered around 190 million orders during the quarter, 14% higher from the same period last year.

The three-month period ended September 30 saw Zomato post its second consecutive quarterly net profit. It reported a profit after tax of Rs 36 crore during the quarter. In the April-June quarter, it had reported a net profit of Rs 2 crore.

On October 10, ET reported, citing a UBS report that customers of food-delivery and quick-commerce platforms were broadly agnostic to marginal increases in costs and that such non-delivery fees provided a revenue upside and helped unit economics for the companies.

ET had reported on September 2 that several consumer-focussed internet platforms, including Uber, BigBasket’s quick-commerce vertical BB Now and Zepto were levying a per order, or per booking, fee to improve their unit economics.

Shares of Zomato were trading 0.8% higher at Rs 124.70 on the BSE Monday afternoon.