India’s two largest food delivery platforms, Zomato and Swiggy, have recently brought changes in their pricing that have affected their volume of orders.
According to an Economic Times report, the two food delivery platforms consistently raised delivery fees, tightened order cancellation rules and hiked the prices of their loyalty programmes.
Analysts told the paper, “The drop in order volume is estimated at about 5-6 percent every month since October for Zomato and December for Swiggy, in line with when these platforms tightened policies.”
Swiggy recently raised prices of Super, its loyalty programme, while Zomato’s Gold membership has also got a recent price hike. Zomato has also started cross-selling during checkouts, suggesting side offerings to increase average order value. Additionally, order cancellation and escalation policies have also been changed.
The report also mentioned that Zomato users will now have to pay anything between Rs 16 to little over Rs 45 for small-value orders in Bengaluru, depending on the distance covered.
Zomato also added a Rs 11 delivery fee on its “meal-for-one” offering and a Rs 25 surge fee during peak hours. Swiggy has also raised delivery charges in certain cities like Bengaluru. While the platform previously didn’t charge delivery on orders above a specific limit, it is currently charging Rs 31 on delivery for orders up to Rs 98 and Rs 21 for anything above that. The food delivery services have also started passing certain other taxes to consumers, including packaging charges.
Both Swiggy Super and Zomato Gold memberships have seen price hikes. The Super programme now costs Rs 349 for a three-month membership, while Zomato Gold has nearly doubled its yearly cost. It’s worth noting that Zomato and Swiggy already charge restaurants a be a part of their loyalty programmes, while no expense of these benefits or offers is borne by the platforms.
According to market research analyst RedSeer Consulting, a slowdown is expected in the sector due to the increased costs being shifted to the consumers and the slashing of discounts across the platforms. The analyst expected growth in the food ordering segment to slow down to 35 percent in 2020, a massive reduction from the 205 percent growth (where 1.1 billion orders were clocked) in 2019.
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