Swiggy, one of India’s leading food delivery platforms, has announced a major shift in its business model. The company has decided to stop charging commission fees from restaurants and instead will charge a nominal platform fee of INR 2 (approximately $0.03) from customers.
Under the new model, Swiggy will offer restaurants the option to subscribe to its premium services, which will provide them with additional benefits such as increased visibility and data analytics. However, restaurants will no longer have to pay the high commission fees that were previously charged by the platform.
Swiggy’s decision to stop charging commission fees is aimed at increasing the profitability of its restaurant partners, many of whom have struggled to stay afloat during the pandemic. The move is also expected to help Swiggy attract more restaurants to its platform and gain a competitive advantage over rival food delivery services.
By charging a nominal platform fee of INR 2 from customers, Swiggy aims to continue offering its services at an affordable price while also generating revenue to support its operations. The company plans to use the funds generated from the platform fee to invest in technology and innovation, as well as to expand its operations in new markets.
The new business model is expected to benefit all stakeholders involved in the food delivery ecosystem, including restaurants, customers, and Swiggy itself. It remains to be seen how the market will respond to this change, but Swiggy’s innovative approach to business model experimentation is likely to set a new trend in the food delivery industry.
Swiggy’s decision to stop charging commission fees from restaurants is a significant departure from the traditional business model of food delivery platforms. In recent years, there has been growing criticism of the high commission fees charged by these platforms, which can range from 15% to 30% of the order value.
Many restaurants have argued that these fees are unsustainable, particularly for small and independent businesses. The COVID-19 pandemic has only intensified these concerns, as restaurants have had to deal with reduced foot traffic and increased delivery costs.
By eliminating commission fees, Swiggy is hoping to address these concerns and build stronger relationships with its restaurant partners. The company is also hoping to differentiate itself from competitors like Zomato and Uber Eats, which continue to charge commission fees.
Swiggy’s decision to charge a nominal platform fee from customers is also notable. While other food delivery platforms charge delivery fees or mark up menu prices to generate revenue, Swiggy’s decision to charge a flat platform fee is designed to be more transparent and affordable for customers