Food, grocery delivery gets dearer with hike in GST, platform fee
bengaluru, Sept. 5 -- India's top food and grocery delivery platforms are gearing up for the high-stakes festive season with a flurry of charges-a new goods and services tax, higher platform fees, surge pricing, rain fees and long-distance delivery charges-to cash in on the annual demand spike. The strategy signals a confident bet that customers, driven by convenience, will absorb rising costs.
The government levied 18% GST on delivery services provided by e-commerce operators as it rationalized the tax slabs to two rates from four on Wednesday. Previously, platforms did not charge GST consistently for every order because they were not liable to pay the tax. Now, they will be liable, so they will fully pass on the charge to the user.
Additionally, Swiggy and Eternal (formerly Zomato Ltd) have raised platform fees to Rs.15 and Rs.12, respectively, in key metros, aiming to boost per-order revenue during peak demand. For Swiggy, this marks the steepest increase since April 2023, when it introduced a Rs.2 platform fee.
Eternal's fee is now almost six times of it was when introduced in August 2023. These charges are levied on users outside its loyalty programme.
"This time of the year also tends to be costlier than business-as-usual months for online sellers as they need to hire more delivery and warehouse staff and maintain inventory. Higher charges passed on to customers is crucial for platforms to improve margins and move towards profitability," said Satish Meena, an analyst at consumer research firm Datum Intelligence.
"We will continue to tactically use levers like these [platform fees] to optimize both growth and margin expansion. Most importantly, as we do this, we will also continue to ensure the viability and well-being of each of our stakeholders-our customers, restaurant partners and delivery partners," Zomato's management noted in its Q3 FY25 letter to shareholders....
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