Swiggy is looking to increase the delivery fees it charges from its customers on its quick commerce platform Instamart in a bid to improve its unit economics.
This was indicated by the company’s chief financial officer (CFO) Rahul Bothra, in an analyst call post the announcement on results on Tuesday.
Instamart currently charges a delivery fee of Rs 30 on orders below Rs 199, a small cart fee of Rs 15 and handling fee of Rs 6.5 per order.
On orders higher than Rs 199, the small cart fee is waived and delivery fee is dynamic. It is only free for Swiggy One members.
“In the overall delivery fee construct, today there is a certain amount of subsidy that goes into the business, both through the subscription programme (Swiggy One) as well as getting users acquainted (with) this new service. Over time there is expectation to increase the delivery fee,” Bothra said.
However, he did not mention a specific timeline for the fee hike. He also said that Swiggy intends to improve its take rates or commissions for Instamart from the current 15% to 20-22%.
Instamart’s competitors Zomato’s Blinkit and Zepto also charge delivery fees. Blinkit charges Rs 30 for orders till Rs 199 and Rs 16 on above this amount. Zepto charges a small cart fee and delivery fee of Rs 35 each on orders below Rs 99.
On its food delivery platform, Swiggy has already raised its platform fee fivefold, from Rs 2 to Rs 10 per order, in the past 18 months.
In its financial results for July-September quarter, Swiggy said it has narrowed its losses to Rs 625.5 crore from Rs 657 crore in the same quarter last year. Its revenue from operations rose 30% year-on-year to Rs 3,601.5 crore during the quarter.
Swiggy has also said that it is increasing the size of its dark stores to house up to 20,000 stock keeping units (SKUs) and introducing mega pods — bigger dark stores — with an extended capacity of over 50,000 SKUs.
In a note, Motilal Oswal Financial Services said mega pods could “potentially compromise the 10-minute delivery promise”.
“Maintaining ultra-fast delivery times amidst such expansions will be a key challenge for Swiggy’s Instamart,” it said.
In quick commerce, Swiggy has said it would achieve a breakeven of contribution margin by October-December 2025.
In another result update, Nuvama institutional equities said that Swiggy’s gross order value growth in food delivery and quick commerce is lower than Zomato’s for H1FY25, “indicating further market share loss during the last six months”.
Notably, Swiggy Instamart’s average order value at Rs 499, is around 24% lower than Blinkit’s Rs 660 in Q2FY25. Zepto’s AOV is around Rs 530-540. “Comprehensive assortment, value addition and better services would led to success,” Nuvama added.