Indian food delivery giant Swiggy has announced a new strategy aimed at taking on its main rival, Zomato. Swiggy has said that it will no longer charge restaurants any commission fees for using its platform, a move that is expected to give the company an edge in the highly competitive food delivery market.
Under the new strategy, Swiggy will offer a “zero commission” model to restaurants that sign up for its services. The move is aimed at attracting more restaurants to the platform and offering them a more cost-effective alternative to other food delivery services.
In a statement, Swiggy said that the new model was designed to support the struggling restaurant industry, which has been hit hard by the COVID-19 pandemic. The company said that it wanted to help restaurants grow their businesses by giving them access to Swiggy’s large customer base, without having to pay any commission fees.
Note: This is applicable only for brands that are new to Swiggy and not for new outlets/ brands of existing partners.
Swiggy’s move is a direct challenge to other food ordering apps, which charge restaurants a commission fee of up to 18-25% for using its platform. The move is expected to put pressure on Zomato to rethink its own commission fee structure.
The food delivery market in India has seen explosive growth in recent years, driven by the increasing popularity of online food ordering and home delivery services. Swiggy and Zomato are the two main players in the market, with both companies aggressively competing for customers and restaurant partners.
Among other things, Swiggy also announced a slew of sops for new restaurant partners to help them drive growth and scale operations. The newly onboarded restaurants will also get access to a dedicated growth manager, free advertisements on the app and an extended delivery radius which they quoted as a win-win.
Record tell, Swiggy adds nearly 10,000 new restaurants a month on its platform and has more than 2.5 Lakh restaurant partners enabled on its app.
Swiggy’s decision to offer a zero-commission model is a bold move that is likely to shake up the market and put pressure on Zomato to respond. The move is also expected to be welcomed by restaurant owners, who have been hit hard by the COVID-19 pandemic and are looking for ways to reduce their costs and increase their revenues.