Your Swiggy Instamart orders may become costlier soon
Swiggy, a major player in the food and grocery delivery space, is considering raising delivery charges for its quick commerce arm, Instamart. The company's Chief Financial Officer (CFO), Rahul Bothra, disclosed the plan during an interaction with analysts. The development comes after the firm announced its Q2 FY25 financial results yesterday.
Current delivery fee structure and future plans
Currently, Swiggy offsets delivery charges through its loyalty program, Swiggy One, and by providing discounts to new customers. Delivery is free for Swiggy One members while other customers pay a variable fee. Bothra noted that the company plans to gradually increase these charges but did not specify when it would do so.
Swiggy's strategies to boost profitability
Along with hiked delivery charges, Bothra detailed other ways to improve profitability. These include hiked platform fees for food delivery orders, and monetizing Instamart through ads. In the last 18 months, Swiggy has already hiked its platform fee five times, from ₹2 to ₹10/order. The firm hopes to increase its take rates (commissions) for Instamart from the current 15% to 20-22%.
Instamart's financial performance
Instamart posted an adjusted revenue of ₹513 crore in Q2 FY25, more than double the ₹240 crore earned in the same period last year. However, it still trails Blinkit, which reported revenue of ₹1,156 crore during the quarter. At a company level, Swiggy's revenue increased 30% year-on-year to ₹3,601.5 crore for Q2, while its losses narrowed to ₹625.5 crore from ₹657 crore a year ago.
