Zomato’s ₹2 Platform Fee: Insights into its Introduction in Select Markets

Zomato, the popular food delivery platform, has initiated a trial phase for a ₹2 platform fee on its food delivery app. This experimental move is currently being tested in specific markets, although the exact locations remain undisclosed. This fee is applied per order, regardless of the cart total, and is applicable to all users, including those who are part of the Zomato Gold loyalty program.

All About Zomato’s Platform Fee

This nominal fee introduction is viewed as Zomato’s endeavor to explore fresh avenues for profitability and enhance the overall user experience. The company’s spokesperson informed the Economic Times that the permanent implementation of this fee structure hinges on the results of this trial. They elaborated that Zomato might adopt or forego scaling the fee structure based on its effectiveness and user feedback.

This development comes in the wake of a similar approach taken by its primary competitor, Swiggy, which introduced a ₹2 platform fee for all orders earlier this year. As Zomato seeks to solidify its financial position, the platform fee is seen as a potential measure to bolster earnings and drive sustainable growth.

Previously, Zomato’s CFO, Akshant Goyal, mentioned during an earnings call with analysts that the company had yet to make a decision regarding the implementation of platform fees. Goyal stated, “So, it’s a business call… we are aware of that, and I think we’ll take a call when we think it’s right for the business. At this point, we haven’t done that… there is no platform fee on our platform.”

In recent news, Zomato achieved its first-ever profitable quarter, reporting a profit of ₹2 crores in the initial quarter of FY24. This marked a remarkable turnaround from the ₹186 crores loss during the same quarter in the previous year. The company’s revenue surged by an impressive 64 percent, reaching ₹2,597 crores in the same quarter, exhibiting substantial progress compared to the ₹186 crores loss incurred a year ago.

“We were realistically expecting to reach this milestone in the September quarter (Q2FY24), and we were being conservative in our previous guidance. However, some crucial segments of our team across various business domains surpassed our expectations, and certain initiatives yielded better outcomes than we had initially projected,” Akshant Goyal remarked. As of June 2023, Zomato proudly boasted approximately 17.5 million monthly transacting customers.