Zomato
Zomato increases platform fee on food delivery to Rs 10 to 'maintain services during festive rush'
New Delhi/IBNS: Indian multinational restaurant aggregator and food delivery company Zomato has increased its platform fee on food delivery to Rs 10 from Rs 7 amid the festive rush.
A notification on the app explained, “This fee helps us cover our costs and maintain services during the festive period.”
The platform fee was first introduced in August 2023 at Rs 2 as part of Zomato’s strategy to improve its margins and achieve profitability.
Since then, the company has gradually raised the fee to Rs 3, Rs 4 in January, and a temporary hike to Rs 9 on December 31.
For the financial year 2023, Zomato handled an order volume of 647 million.
Each Rs 1 increase in platform fees adds approximately Rs 65 crore annually to the company's revenue.
On Wednesday (Oct. 22), Zomato reported a lower-than-expected profit increase for the second quarter, primarily due to investments in expanding its "dark stores" for Blinkit, its quick-commerce platform.
Despite this, its consolidated net profit rose nearly fivefold to Rs 176 crore for the quarter ending Sept. 30.
The platform fee is an extra charge per food order, separate from the delivery fee, restaurant charges, and GST.
The company also approved a fundraise of up to Rs 8,500 crore through a qualified institutional placement (QIP) to strengthen its cash reserves after acquiring the movie and events ticketing businesses of a digital payments firm.
With growing competition in India’s food and grocery delivery market, companies are seeking funds to expand and gain market share.
Zomato’s key competitor, Swiggy, offered shares worth $448 million in its IPO, while Zepto raised $340 million in August and plans to go public next year.
To counter rising competition, Zomato added 152 new "dark stores" during the quarter, bringing the total to 791, the most added in a single quarter.
However, Blinkit’s contribution margin—a measure of profit from each additional order—declined to 3.8 percent from 4 percent in the previous quarter.
According to Zomato CFO Akshant Goyal, these new stores take time to ramp up and initially impact margins.
The company’s revenue saw a substantial 69 percent increase, reaching nearly Rs 4,800 crore.
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