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Public listing-bound Swiggy showcased a platform fee of Rs 10 to select users, sharply higher than the Rs 3 it currently charges most users, as the food delivery firm continued to experiment with ways to increase earnings from deliveries.
The Rs 10 fee wasn’t actually charged to the users, but teased during checkout where they were shown the higher fee and then charged Rs 5 after a discount.
A Swiggy spokesperson said the firm had “no plans for a significant increase (in platform fee) in the near term”.
“We’re always running small experiments to better understand the consumer’s choices. This was one such experiment,” the spokesperson said in a statement.
Platform fees are essential to delivery firms as they look to improve their take rates, which determine the amount of money the firms make on every order. With a duopoly in place, both Zomato and Swiggy have been experimenting with increased platform fees to boost their overall revenues and profits.
On January 1, ET reported that Zomato increased the platform fee it charges users for food delivery to Rs 4 per order in its key markets from Rs 3. On New Year’s Eve, the listed food delivery firm temporarily increased the fee to as high as Rs 9 per order in certain markets.
Swiggy started charging a flat platform fee in April last year, while Zomato started the levy in August. Both platforms had started with fee of Rs 2 per order, but increased them through the year.
Both the platforms’ quick commerce delivery arms, Swiggy Instamart and BlinkIt, charge a ‘handling fee’ of Rs 4 in Bengaluru, according to the two apps.
Charging higher platform fee is one of the ways in which such firms are trying to increase their profitability, with advertising income being another route. This assumes significance as platforms, particularly those engaged in food delivery, are finding it difficult to increase commissions that they charge restaurants without attracting their ire.
Swiggy’s experiments also come as it prepares to list itself on the bourses this year. On Tuesday, ET reported that Swiggy’s largest shareholder, Prosus, may have to be tagged as a promoter of the firm for the upcoming initial public offering (IPO), where its existing investors will be the major sellers.
The Dutch-listed investment arm of South African conglomerate Naspers has been trying to reduce its holding in Swiggy to below 26% from the current 33%. Under Indian rules, a shareholder with a stake of 26% or more is termed a promoter, which puts restrictions on the shares it could sell after the IPO.
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