Quick commerce platform Zepto has begun charging its customers a ₹2 platform fee per purchase for selected users, according to a Financial Express report. This makes it the first quick commerce platform in India to begin charging a platform fee. Others like Zomato (which owns Blinkit) and Swiggy (which runs Instamart) have only been charging these fees for their food delivery services.
This comes a month after Zepto began testing its subscription service “Zepto Pass” at ₹99 per month to provide unlimited free deliveries on orders worth more than INR 99 and discounts of up to 20 percent based on the order value. It is the second subscription service to offer such a subscription service after Swiggy Instamart, revealed Your Story.
How are the subscription model and platform fee linked?
Just like Zepto, Zomato, and Swiggy also offer a subscription service. Of these, Zomato’s experience with its subscription service, Zomato Gold, suggests that orders made by subscribers are less profitable than the ones made by non-subscribers. This is because people with the subscription service usually club their orders together. As such, platform fees for all customers (including subscribers) have helped Zomato increase the contribution of its subscription service to the company’s income pool. Further, the cost per order for Zomato Gold orders is higher for the company due to
- higher delivery costs for longer distances,
- priority to subscribers during peak hours,
- a no-delay guarantee benefit for subscribers and
- low subscription fees.
While it is unclear whether Swiggy faces a similar issue, the company did show increased platform fees of Rs.10 this January (up from its previous platform fee of Rs.3), suggesting that it may also be attempting to offset lower profitability from subscription customers by increasing fees across all orders. Zepto could be considering a similar approach, especially considering the proximity of the platform fee introduction and its subscription service.
Also read:
- Will Zepto’s Experimental Membership Program Overcome The Hurdles Faced By Zomato Gold?
- Flipkart Considering A Quick Commerce Platform To Counter Blinkit And Zepto
- Flipkart In Talks To Acquire Delivery Platform Dunzo: Report
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