Swiggy teases doubling platform fee, likely to offset losses ahead of planned IPO

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₹5 to ₹10 per food order, as per a Moneycontrol report. The move is seen as a strategic effort to reduce losses as the company gears up for its upcoming initial public offering (IPO) later this year, it added. Swiggy has started hinting at the potential fee hike on its app, targeting select customers.

This follows a similar move in April 2023 when it introduced a nominal fee of ₹2 for a few customers and later expanded it to all customers. The current fee is set at ₹5. The move by Swiggy comes at a time when the food-delivery market is experiencing slower growth.

Co-founder and group CEO Sriharsha Majety highlighted the importance of Swiggy Instamart as a growth driver, highlighting the company's efforts to make itself more affordable, as seen in the introduction of Pockethero. Swiggy's push to increase its user base aligns with its IPO plans later this year, as revealed by Majety. The competitive landscape includes Zomato, which initially stated no intention to introduce a platform fee but later followed Swiggy's path.

The move to levy a fee reflects the challenges faced by food delivery companies in a dynamic market. As the industry continues to evolve, analysts emphasize the need for caution in implementing higher platform fees, considering customer sensitivity to pricing. Both Swiggy and Zomato have experienced success with nominal fees, and finding the right balance is crucial to maintaining customer satisfaction and order frequency.

The company often follows a pattern of teasing higher amounts, offering discounts initially, and then gradually increasing the fee. A Swiggy spokesperson told Moneycontrol the ₹10 fee is part of ongoing experiments to understand consumer preferences. Earlier in October last year, Swiggy