In a significant move that's likely to impact consumers, major food delivery platforms in India, including Zomato, have increased their fees ahead of the festive season. This industry-wide adjustment reflects the rising costs in India's competitive food delivery sector.

Zomato's Fee Hike

Zomato, one of India's leading food delivery platforms, has raised its platform fee to ₹12.50, excluding GST. This increase puts Zomato's fees slightly lower than its main competitor, Swiggy, but still represents a notable rise for consumers.

Industry-Wide Trend

The fee hike is not isolated to Zomato:

These simultaneous increases across major platforms indicate a broader trend in the food delivery industry, possibly driven by rising operational costs and the need for improved profitability.

Additional GST Impact

Adding to the cost increase, an additional 18% GST levy on delivery charges is set to take effect from September 22. This is expected to further impact consumer costs:

• Zomato users may see an approximate increase of ₹2.00 per order.
• Swiggy customers could face an increase of about ₹2.60 per order.

Interestingly, Magicpin stated that it already pays 18% GST on food-delivery costs, meaning the GST changes will not affect its cost structure or impact consumers.

Implications for Consumers and the Industry

These fee hikes and additional GST charges are likely to make food delivery slightly more expensive for consumers across India. For companies like Zomato, platform fees have become an important additional revenue source, helping to offset operational costs in the competitive food delivery market.

As the festive season approaches, it remains to be seen how these price increases will affect consumer behavior and the overall dynamics of the food delivery industry. While the platforms aim to balance their operational costs, they must also consider customer retention in an increasingly price-sensitive market.

For Zomato and its competitors, the challenge will be maintaining growth and market share while adapting to the evolving cost structures in India's dynamic food delivery landscape.

Zomato, the popular food delivery platform, has implemented a significant increase in its platform fees, raising it by 20% to Rs 12 per order across all cities where it operates. This move comes as the company capitalizes on the increased demand during the festive season.

Fee Hike Details

This latest adjustment follows a pattern of fee increases by Zomato. The company had previously raised its platform fees from Rs 6 to Rs 10 per order ahead of last year's festive season.

Competitive Landscape

Zomato's fee hike comes in the wake of similar moves by its competitors:

• Swiggy, Zomato's main rival, recently experimented with a Rs 14 platform fee at select locations last month.

Financial Performance

The fee increase coincides with recent financial results from Zomato's parent company, Eternal:

Market Response

The market's reaction to these developments was relatively muted:

Industry Trends

The platform fee increases by both Zomato and Swiggy indicate broader trends in the food delivery sector:

1. Capitalizing on festive season demand
2. Efforts to improve profitability in a competitive market
3. Balancing user experience with revenue generation

As the festive season progresses, it remains to be seen how these fee adjustments will impact consumer behavior and the companies' bottom lines in the highly competitive food delivery market.