Swiggy has begun reversing its fee waiver campaign on Instamart, reinstating handling charges on all orders and tying surge fee waivers to its subscription programme, weeks after management admitted the experiment showed “limited adoption and retention.
“The changes, visible on the app, marks a retreat from the aggressive discounting war in quick commerce that Zepto kicked off late last year by waiving handling, delivery and surge charges for orders above Rs 99. While it recently raised the free delivery threshold to Rs 149, handling fees remain waived regardless of cart value.
Swiggy had immediately responded with its own fee waiver campaign eliminating all customer facing charges for orders above Rs 299. But unlike Zepto, which has maintained its handling fee waiver, Swiggy has now reinstated the charge.
The move comes as Swiggy’s quick commerce business is targeting contribution margin breakeven by the end of Q1FY27.
Instamart now charges a handling fee of Rs 7-10 on all orders regardless of cart size. Additionally, surge fee waivers—previously available to all users above the Rs 299 threshold—are now restricted to Swiggy One subscribers.
High Cost of Growth
During its Q3 FY26 earnings call, chief financial officer Rahul Bothra had said that around 90 basis points of structural margin improvement, or roughly Rs 70-80 crore had been reinvested into the no-fee campaign. Instamart CEO Amitesh Jha had said the campaign has not attracted the ideal type of growth, distinguishing between customers who remain sticky to the platform versus those who switch based on discounts. “Wherever we have seen a growth in orders for any of these platforms, the basket sizes have not increased. In fact, it has gone down by a lot,” he had told analysts.
Breakeven Countdown
Swiggy’s quick commerce business reported a contribution margin of negative 2.1% in Q3 FY26. The company needs to improve contribution margins by 250 basis points over the next two quarters to achieve its breakeven guidance.
The partial rollback suggests Swiggy is testing which fees it can reinstate without triggering significant customer churn. By keeping delivery fee waivers intact for Swiggy One members above Rs 199 while bringing back handling charges universally, the company appears to be using its subscription programme as the primary vehicle for retaining price-sensitive users.
In terms of competition, market leader Blinkit had long resisted any customer fee waivers. However, recently it has begun experimenting with lower delivery fees in select pincodes to protect market share. Swiggy did not respond to a request for comment till the time of going to the press.