Swiggy Instamart to raise delivery charge 'over time' amid profit push, following doubling of platform fee
Swiggy is gearing up to increase delivery charges on its Instamart platform over time, as the company looks for ways to boost the profitability of its quick-commerce arm. According to a MoneyControl report, the food tech giant plans to raise fees to improve the unit's financial health while continuing to familiarise customers with the service.
Swiggy plans to gradually raise delivery charges on its Instamart platform over time to boost profitability, according to a recent report.?
The company's CFO, Rahul Bothra, explained that, at present, some of the delivery fees are subsidised, mainly through the Swiggy One subscription service, while also helping customers get accustomed to the platform.?
Currently, Swiggy One members enjoy free delivery on Instamart, while non-subscribers pay a variable delivery fee based on their order.?
Competitors like Zepto also offer free delivery for loyal customers under their Zepto Pass program, but Swiggy's key rival, Blinkit, charges a delivery fee on all orders, regardless of loyalty membership.
Now, Swiggy plans to gradually increase these fees as part of its strategy to strengthen its financial position. "Over time there is expectation to increase the delivery fee," Bothra said.
In addition to raising delivery charges, Bothra discussed Swiggy's plan to increase its commission rate from 15% to a target of 20-22% for Instamart.?
A key aspect of this strategy involves generating advertising revenue on the platform, which is expected to contribute significantly to improving margins.
Where does Swiggy Instamart stand in terms of profitability?
Instamart's revenue has shown impressive growth, reaching Rs 513 crore in Q2 FY25, up from Rs 240 crore in the previous year.?
However, it still trails behind Blinkit, which reported Rs 1,156 crore in revenue.?
By raising delivery charges and leveraging ads, Swiggy aims to enhance its position in the competitive quick-commerce sector.
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