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The food delivery race in India is heating up once more, with Zomato increasing its platform fee from ₹10 to ₹12 (excluding GST). This move comes just days after its rival Swiggy raised its own platform fee to ₹14 in select regions, citing higher order volumes. The timing is crucial—just ahead of the festive season, when demand for food delivery typically spikes. But for customers already feeling the pinch of rising costs, this hike adds another layer to their growing expenses.
Zomato’s Long Trail of Fee Hikes
The journey of Zomato’s platform fee has been gradual but persistent. The company first introduced the fee in 2023 under CEO Deepinder Goyal, starting with ₹2 per order. By August that year, it was raised by another ₹2. In January 2024, the platform fee climbed to ₹4, then jumped again to ₹7 by October. Ahead of last year’s festive rush, it reached ₹10. Now, just in time for the 2025 festive season, customers are looking at ₹12 plus taxes.
A notification on the Zomato app stated, “This fee helps us pay our bills to keep Zomato running. To maintain services during the festive rush, it has increased slightly.” While positioned as a small adjustment, the repeated increments signal a long-term strategy to boost revenue margins.
Growth Slows Down for Zomato
The timing of the hike is linked to slowing growth in India’s food delivery market. In the April–June quarter, Zomato’s gross order value (GOV) grew 16% year-on-year, reaching ₹10,769 crore. But this was weaker compared to the 20%+ growth rates from earlier quarters. Parent company Eternal also reported a steep 90% drop in consolidated net profit—just ₹25 crore—despite a 70% surge in revenue. Rising costs and tightening competition are clearly eating into margins.
What Are Platform Fees?
Platform fees are charges applied on top of restaurant bills, delivery charges, and GST. For Zomato users, the ₹12 fee attracts an additional 18% GST, meaning the real cost per order is ₹14.16. While it may sound small, it adds up quickly for regular users.
Reports suggest that India’s online food delivery players handle between 2 to 2.5 million orders daily. Even a minor increase in fees can add crores to their revenue pool. Notably, Swiggy was the first to roll out platform fees, with Zomato following soon after in 2023. Both companies have steadily escalated their charges since.
What Undercode Say:
Zomato’s fee hike is not just about covering bills; it’s about strategy. The festive season is when people order more food—late-night snacks, family gatherings, or celebratory meals. With higher demand, delivery platforms seize the moment to pass on incremental costs to customers, knowing they won’t stop ordering.
But the larger story here is sustainability. The Indian food delivery sector, once considered a hyper-growth industry, is maturing. Growth rates are flattening, and profitability has become the real challenge. Zomato’s parent company seeing a 90% drop in profit despite strong revenue growth reflects that the business model is struggling with cost pressures. Delivery logistics, discounts, and customer acquisition are expensive, and platform fees are one of the few levers left to protect margins.
The psychology of consumer acceptance also plays a role. Customers have become somewhat desensitized to incremental hikes. ₹2 here, ₹3 there—it doesn’t sound like much. But multiply this across millions of daily orders, and companies like Zomato and Swiggy generate significant additional revenue without dramatically altering customer behavior. In fact, the festive season creates a cushion—people are less price-sensitive when celebrating.
The competition dynamic is equally telling. Swiggy raised its fee first, citing order growth. Zomato followed suit quickly, ensuring it didn’t leave money on the table. This tit-for-tat strategy highlights the duopoly that dominates India’s food delivery market. With limited players, they can experiment with fees without fearing mass customer defection.
From a consumer standpoint, this is frustrating. What started as a convenience is becoming costlier year after year. A platform fee that began at ₹2 in 2023 has ballooned to ₹12 in 2025—an increase of 500% in just two years. Customers may eventually start rethinking their frequency of orders or look for cheaper alternatives, such as cooking at home or using local delivery services.
However, from an investor perspective, these moves are necessary. Zomato and Swiggy cannot rely solely on discounts and venture capital funding anymore. Profitability is now the north star. With scale comes the pressure of financial performance, and fees are a direct path to balancing the books.
The danger lies in overplaying the hand. If hikes continue at this pace, the companies risk alienating their most loyal user base. The middle-class consumer, already navigating inflation in essentials, may see food delivery as a luxury instead of a necessity. That shift in perception could hurt long-term order volumes.
Ultimately, Zomato’s strategy is a balancing act between squeezing out revenue and maintaining customer trust. The festive season may justify the hike for now, but whether customers accept another round of increases next year remains to be seen.
🔍 Fact Checker Results:
✅ Zomato has increased platform fees multiple times since 2023, now at ₹12 excluding GST.
✅ Swiggy raised its platform fees earlier to ₹14 in select areas.
❌ Claim that food delivery demand is endlessly rising is misleading—growth rates are actually slowing.
📊 Prediction:
Zomato and Swiggy will continue raising platform fees gradually, normalizing higher charges as a permanent part of the food delivery experience. Over the next two years, platform fees could climb past ₹20, especially during festive peaks. However, if consumer backlash strengthens, smaller regional players or subscription models offering “no platform fee” perks may emerge to challenge this duopoly.
🕵️📝✔️Let’s dive deep and fact‑check.
References:
Reported By: timesofindia.indiatimes.com
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