Zepto Experiments With Platform Fees To Boost Profitability

Quick commerce company Zepto has been exploring the introduction of platform fees alongside handling charges and delivery fees to enhance its profitability.

Zepto has initiated a platform fee of Rs 2 per order, in addition to handling charges varying between Rs 5-20 based on factors such as order size, location, and time of day. This sets it apart from competitors like Zomato-owned Blinkit and Swiggy Instamart, which solely levy handling fees.

Contrarily, Zomato and Swiggy’s main food delivery services do impose platform fees. These fees, along with avenues like advertising, contribute to increased earnings for food delivery companies, even though escalating commissions from restaurant partners are sometimes met with resistance.

In January, Swiggy hinted at a platform fee of Rs 10 for select users, a significant increase from the Rs 3 it typically charges most users. Similarly, on New Year’s Eve, Zomato briefly raised the platform fee to as high as Rs 9 per order in certain markets, compared to its usual Rs 3-4 per order.

Zepto stands out as the lone standalone quick commerce company in India. A spokesperson for the company emphasized their focus on achieving profitability through core operational efficiency and cost reduction, rather than relying heavily on delivery fees. The spokesperson refrained from disclosing specific plans regarding platform fees.

Apart from platform, delivery, and handling fees, Zepto also imposes a “small cart” fee for orders under Rs 100, and a surge fee during peak demand periods.

On February 19, Zepto introduced a membership program called Zepto Pass, providing free delivery for orders over Rs 99 and discounts for orders exceeding Rs 399 for most customers. The program, priced between Rs 149 and Rs 299 per month, is currently being offered at a heavily discounted Rs 19.

Cofounder and CEO Aadit Palicha announced on X (formerly Twitter) that Zepto achieved 1 million Pass subscribers within a week of launch.

According to brokerage firm JM Financial, customer fees like platform and handling fees play a significant role in enhancing profitability for quick commerce firms.