In a strategic move to bolster margins ahead of India’s lucrative festive season, Zomato has implemented a 20 percent increase in its platform fee, raising the charge from Rs 10 to Rs 12 per order across all operational cities. The fee adjustment, which includes GST, positions the food delivery giant to capitalize on the anticipated surge in ordering volumes during the upcoming Onam, Navratri, and Diwali festivities.
The timing of this platform fee escalation reflects calculated revenue optimization as festive season demand is expected to skyrocket. For restaurant industry stakeholders, this development signals how aggregator platforms are increasingly leveraging seasonal demand patterns to improve unit economics while transferring cost burden to end consumers.
Zomato’s competitor Swiggy has simultaneously escalated its platform fee strategy, raising its charge to Rs 15 per order, marking the third increase in three weeks. This aggressive fee structure creates a significant cost differential between platforms, with Swiggy’s platform fee now Rs 3 higher than Zomato’s Rs 12.
The duopolistic nature of India’s food delivery market enables both platforms to implement fee increases with limited consumer alternatives. As these platforms process around 2 million orders per day, this fee increase will significantly impact their revenue streams, with industry estimates suggesting substantial daily revenue additions from the nominal fee adjustments.
The current fee escalation represents the continuation of a systematic pricing strategy that has evolved considerably over recent years. In July 2024, Zomato extended the fee to Rs 6 in major metros, including Delhi, Mumbai, and Bengaluru. During last year’s festive season, it jumped to Rs 10, framed as a “festive platform fee.”
This progressive fee structure demonstrates how platforms test consumer price elasticity during peak demand periods. At its present order volumes of 2.3-2.5 million orders per day, Zomato would earn substantial additional revenue from the Rs 2 per order increase, directly improving their bottom-line performance.
The success or failure of current fee levels will likely influence future pricing strategies and provide market intelligence about consumer price elasticity in India’s evolving food delivery ecosystem.
