After an eventful New Year’s eve, Swiggy & Zomato might have to make food orders costlier for consumers

Swiggy & Zomato are now liable to pay a 5 per cent GST not just for supply from registered but also unregistered restaurants, the weight of which might or might not come on the users of the apps.

online food delivery, GST, restaurant, night curfew, new year's eve, food orders, grocery orders, omicron, Swiggy, Zomato, Blinkit, Instamart
Swiggy & Zomato registered record number of order on New Year’s eve. Image: Bloomberg

Online food delivery platforms have gotten expensive starting this year and while this might dampen the home food delivery segment in the days to come, the two food-delivery apps, Swiggy and Zomato had a blast of a new year.

According to a finance ministry circular, starting January 1, all food delivery apps will be liable to pay a 5 per cent GST not just for supply from registered but also unregistered restaurants. Also, they will not get input tax credit (ITC). And this new charge may or may not be offloaded to the users of the apps. Before this, this tax was being paid by the restaurants.

Even as the possible effect of this on the platforms, on restaurants and on the consumers, are not ascertained as of now, the two online food delivery apps ensured that it was a happy end of the year after an eventful 2021. During the year 2021, Zomato got listed on the public markets and Swiggy doubled down on its grocery service Instamart.

Rewind to the NYE

Most people across the country stayed back indoors this new year due to the omicron scare and also night curfews and restrictions imposed across many states, Swiggy and Zomato registered ‘unexpected’ number of orders. While Swiggy received over 9000 orders per minute, Zomato touched a high of 7100 orders per minute.

“Swiggy crossed the 2 million total orders mark by 9 pm itself. We broke our own record of 5500 food orders per minute from Dec 31, 2020 and ended the night with an order peak of 9500 orders per minute for food alone. This is the highest ever for food delivery in India,” the food delivery aggregator Swiggy informed Financial Express Online. Also, its grocery delivery platform recorded 63 per cent more orders and 74 per cent increase in gross merchandise value (GMV) compared to the rest of the month, beating its own previous Christmas day peak. “The order intensity peaked closer to dinner, with 17662 being placed in 30 minutes alone,” it confirmed.

Zomato, meanwhile, clocked over Rs 100 crore in GMV as compared to Rs 75 crore it had registered last year on December 31. The food delivery platform had touched 2.5 million orders by 11:15 pm.

What were the most ordered items?

Users mostly ordered Biryani, Butter Naan, Masala Dosa, Paneer Butter Masala and Chicken Fried Rice, from Swiggy and Swiggy Instamart saw mostly breakfast items being ordered from the app, “15,458 cartons of egg, 35,177 bags of tomatoes, 27,574 bags of onions and 7822 bread packets”, to be precise. “Instamart saw a 30x growth from last year,” Swiggy told Financial Express Online.

Zomato’s founder & CEO Deepinder Goyal, meanwhile, tweeted about the items being ordered on Blinkit, the online grocery delivery service backed by Zomato. He tweeted, “An update from @letsblinkit – 7,000 packs of nachos have been ordered already. And 43,000 cans of aerated drinks. Not going to share the stats on condoms.” Blinkit registered orders of 130,154 liters of Soda, 11,943 ice packs, 4,884 jars of dips, 6,712 tubs of ice creams, 28,240 packs of instant popcorn, on the NYE.

What cities/ towns placed the most orders?

Opposed to what many may think, at Swiggy, tier-II and -III cities saw a 68 per cent increase in delivered orders while metros saw a 58 per cent increase and among the non-metro cities, Vizag registered the highest number of orders per minute at 190. Also, cities like Rourkela and Palakkad witnessed a 300 per cent growth in orders. “The new users on our platform increased by 80 per cent showing that there was a strong intent for customers to order online. Cities like Mangaluru, Patna, Ludhiana and Surat saw the highest new users,” Swiggy maintained.

The preparedness that went behind it all

Interestingly, both restaurants and food delivery aggregators had prepared themselves ahead of the new year which resulted in smooth delivery of food till late night and “low restaurant driven cancellations even during the peak hours”.

Earlier, a Zomato spokesperson had said, “This year, we have Zomans (our employees) volunteering to deliver orders and helping the customer support across chat, email and social media. This is beyond their regular work profile. Besides, we have always had emergency SOS services for our delivery partners in case of SOS support and road side assistance. We are also working with the authorities to ensure our delivery partners are equipped with the right road safety and Covid gear.”

Swiggy too had its delivery army ready for the month. “We ran a month-long celebration for our partners by putting in place various schemes and incentives that have made December the highest-earning month for them. Additionally, top-performing delivery partners were felicitated with badges and gift hampers throughout the month. To aptly compensate them for their efforts on Dec 31 and Jan 1, special incentives were in place. We’re happy our delivery partners, along with our operations and support staff, ensured a great customer experience for lakhs of users,” Swiggy told Financial Express Online.

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