Swiggy, a major player in the food-tech industry, is making headlines as it gears up for its upcoming IPO. The company has introduced a significant change to its service fee policy, extending it to include the gross order value for restaurants in non-metro areas. This move, expected to increase commissions for these restaurant partners, has sparked considerable discussion within the industry.
New Service Fee Structure
Swiggy’s recent policy adjustment focuses on expanding its service fee, commonly known as a commission, to cover the gross order value, which includes GST and packaging fees. Previously, restaurants in non-metro areas were charged a service fee based only on the net order value, while those in larger urban areas were already subject to fees based on gross order value.
Starting August 14, the revised policy will apply uniformly across Swiggy’s platform, affecting approximately 1,000 restaurants. According to sources familiar with the situation, this change is part of a broader effort to standardize the commission structure for all restaurants listed on Swiggy, regardless of their location.
Industry Reaction and Debate
The policy change has ignited debate among restaurant partners, with some expressing concerns about the potential impact on their earnings. A Swiggy spokesperson emphasized that the recent communication was targeted at a specific group of partners and that individual contracts typically vary based on brand value, order volumes, and other metrics.
Despite assurances that no broad changes have been made to Swiggy’s commission structure, the move to standardize charges across all regions has raised questions about its long-term implications. Industry executives have pointed out that merely increasing commissions or offering discounts to gain market share may not be a sustainable strategy in the long run. They argue that finding a balance between the interests of restaurants and delivery platforms is crucial for the health of the food delivery ecosystem.
Swiggy’s UPI Launch
In addition to the service fee update, Swiggy recently introduced a Unified Payments Interface (UPI) Plug-in service, branded as Swiggy UPI. Powered by the National Payments Corporation of India (NPCI) and Juspay, this new feature allows customers to make faster payments directly within the app, reducing transaction time from over 15 seconds to just five seconds. This launch is part of Swiggy’s ongoing efforts to enhance the user experience and streamline payment processes.
Conclusion
Swiggy’s decision to expand its service fee policy to include gross order value for non-metro restaurants marks a significant shift in its commission structure. While the change aims to create a uniform fee structure across all regions, it has also sparked debate within the industry. As Swiggy continues to innovate with features like Swiggy UPI, the company remains at the forefront of the evolving food-tech landscape
