Zomato Raises Platform Fee To Rs 10 Amid Festive Season Demand

In the financial year 2023, Zomato reported an order volume of 64.7 crore. A Rs 1 increase in its fee structure could translate to an additional Rs 65 crore in revenue annually

Zomato's revenue surged nearly 69 per cent to approximately Rs 4,800 crore in Q2FY25

Source : Instagram

Food delivery platform Zomato has raised its platform fee from Rs 7 to Rs 10 in anticipation of the festive season. A notification on the app explained, "This fee helps us pay our bills to keep Zomato running. To maintain services during the festive season, it has increased slightly.”

In August 2023, Zomato first introduced a Rs 2 platform fee as part of its efforts to enhance profit margins. This fee was subsequently raised to Rs 3, then increased again to Rs 4 on January 1. The company also temporarily raised the fee to Rs 9 on December 31.

In the financial year 2023, Zomato reported an order volume of 64.7 crore. A Rs 1 increase in its fee structure could translate to an additional Rs 65 crore in revenue annually.

On October 22, Zomato announced a profit increase for the second quarter that fell short of expectations, primarily due to pressure on margins from investments in expanding its "dark stores," which are utilised for fulfilling online orders through its Blinkit quick commerce platform.

The platform fee is an extra charge added to each food order in addition to the goods and services tax, restaurant fees, and delivery charges.

For the quarter ending September 30, Zomato reported a consolidated net profit that soared nearly five-fold to Rs 176 crore.

Zomato has approved a fundraising initiative of up to Rs 8,500 crore through a qualified institutional placement to enhance its cash reserves following its recent acquisition of the movie and events ticketing businesses from a digital payments firm.

The competition in India’s online food and grocery delivery market is intensifying, with companies actively seeking funds to expand their operations and capture a larger market share. Zomato's main competitor, Swiggy, recently offered shares worth $448 million in its initial public offering, while Zepto raised $340 million in August and is poised to list its shares next year, according to media reports.

In response to increasing competition, Zomato added a record 152 new "dark stores"—distribution centres—during the quarter, bringing its total to 791. However, the contribution margin for Blinkit, which measures the revenue generated from each additional order as a percentage of gross order value, slipped to 3.8 per cent from 4 per cent in the previous quarter.

"New stores and warehouses require a few months to ramp up, which can temporarily dilute margins," noted Zomato CFO Akshant Goyal.

Despite these challenges, Zomato's revenue surged nearly 69 per cent to approximately Rs 4,800 crore.

As of 12:30 AM on October 23, Zomato's shares were trading at Rs 258.70 apiece on the BSE, reflecting a 0.98 per cent increase.