Swiggy charges delivery fee on 30-35% of its orders

The company charges Rs 30-40 as delivery fee on orders which are below the value of R150-R250, which varies across different cities

Swiggy, the Bengaluru-based food ordering and delivery service, clocked revenues of Rs 11.6 lakh in about 6 months of operations to March, 2015 while reporting losses of Rs 2.2 crore.

The business is promoted by Bundl Technologies. According to a company’s filing with the registrar of companies, the company incurred employee benefits expenses of R1.3 crore to pay wages to its fleet of 3,000 delivery boys and 400 executive in the corporate department.

Swiggy charges a delivery fee on 30-35% of the orders it delivers, a company official told FE. The company charges Rs 30-40 as delivery fee on orders which are below the value of Rs 150-R250, which varies across different cities.

Swiggy is serving eight cities largely in the tier I market that include Bengaluru, Hyderabad, Gurgaon, Delhi, Mumbai, Pune, Kolkata and Chennai. Nandan Reddy, co-founder of Swiggy shared that they plan to enter two more cities by December 2016 but it will have to change its strategy for tier II market and until then it will continue to consolidate business in its existing markets.

The end of 2015 and the early months of 2016 saw food-tech companies battling stressed balance sheets and resorted to mass retrenchment, scaling down or shutting shops to stay afloat. Swiggy’s competitors such as Zomato and Foodpanda handed pink slips to about 300 employees each and Zomato even suspended its food ordering business in four cities on back of supply issues and lack of demand.

“We have scaled up very carefully, we haven’t burnt money on discounts and our expansion was also really low, we did not shut our business in any of the offices,” Reddy explained as its secret to survival.

The company said that it charges each restaurant between 20-25% of its total order value it has delivered as a fee for its services and hold about 15-20% of the restaurants’ business on an average. Serving 25,000 order daily with an average ticket size of about R300, Swiggy competes with the likes of Foodpanda and Zomato.

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First published on: 03-03-2016 at 12:52:17 am