Swiggy Hinted at Increasing Platform Fees, probably to Make up for Losses before its IPO

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Supermarket unicorn and food delivery aggregator based in Bengaluru According to a report, Swiggy is testing the possibility of increasing its platform fee from ₹5 to ₹10 for each food order. It further stated that the action is viewed as a calculated attempt to cut losses as the business prepares for its impending initial public offering (IPO) later this year.

On its app, Swiggy has begun to allude to a possible cost increase for a subset of users. This comes after a similar action taken in April 2023, when it charged a small price of ₹2 to select clients, then increased it to ₹2 for everyone. Right now, the cost is ₹5.

Swiggy’s decision is being made at a time when the market for food delivery is growing more slowly. Sriharsha Majety, group CEO and co-founder of Swiggy, emphasized the significance of Swiggy Instamart as a growth engine and the company’s efforts to lower costs, as evidenced by the launch of Pockethero.

According to Majety, Swiggy’s efforts to grow its user base are in line with its aspirations to go public later this year. Zomato is one of the competitors; at first, it said it wouldn’t be introducing a platform charge, but it eventually adopted Swiggy’s strategy. The decision to charge a fee is a reflection of the difficulties meal delivery services confront in a competitive industry.

Analysts note that given customers’ sensitivity to pricing, care must be taken when imposing increasing platform fees as the market continues to change. While Zomato and Swiggy have both found success with small fees, maintaining customer satisfaction and order frequency depends on striking the correct balance.

The business frequently uses a strategy of first offering discounts, hinting at bigger sums, and then progressively raising the cost. The ₹10 charge is a part of continuing tests to learn consumer preferences, a Swiggy spokeswoman told the sources.

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