E-commerce platform Swiggy is looking to hike its fees for Instamart, its grocery delivery arm, CFO Rahul Bothra told reporters after the company’s analyst call on December 3, according to a Financial Express report.
Speaking to the media, Bothra said, “In the overall delivery fee construct, today there is a certain amount of subsidy that goes into the business, both through the subscription programme (Swiggy One) as well as getting users acquainted (with) this new service. Over time there is expectation to increase the delivery fee.”
Plans for Instamart Business
He did not specify a timeline for when the fee hike could be expected, but said that the company plans to increase its take rates from Instamart from the current 15 per cent to 20-22 per cent.
Swiggy Instamart as on date charges a delivery fee of ₹30 for all orders priced below ₹199, a cart fee of ₹15, and handling charges of ₹6.50. Notably, for its food delivery arm, Swiggy has already hiked the platform fee from ₹2 to ₹10 — 5x since second half of 2023.
Besides Swiggy, its competitors Blinkit (owned by Zomato) and Zepto also charge delivery fees of ₹30 for orders below ₹200 and ₹16 on larger orders; and ₹35 on orders priced below ₹99, respectively.
Further, Swiggy is looking to increase its Instamart dark store count from around 600 to nearly 1,046 by March 2025 as well as increase their average size by 30-35 per cent to keep up with the growing demand for wider assortment in the highly competitive quick commerce sector.
In its maiden post-earnings analysts’ call on December 3, the Bengaluru-based company said it is replacing some of its older, small-format stores sized 2,500-2,800 sq ft with larger stores sized 3,500-4,500 sq ft that can house up to 20,000 stock-keeping units (SKUs). The company will also roll out ‘megapods’ with an area of 8,000-10,000 sq ft in top cities, which can house over 50K SKUs, aiming to serve consumers in 10 to 30 minutes with an extended selection of items.
Swiggy Q2 Results Highlights
Swiggy share price jumped over 6 per cent on December 4 after the company reported its earnings for the second quarter of FY25. Swiggy shares spiked as much as 6.69 per cent to ₹534.85 apiece on the BSE.
The newly-listed Swiggy reported strong revenue growth along with narrowing of losses in the quarter ended September 2024.
Swiggy’s revenue from operations in Q2FY25 increased by 30 per cent to ₹3,601.45 crore from ₹2,763.33 crore in the corresponding period last year. The company had posted a revenue of ₹3,222.2 crore in Q1FY25.
Consolidated net loss of Swiggy during the July-September of FY25 narrowed by 5 per cent to ₹625.5 crore from a loss of ₹657 crore in the same period last fiscal year.
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