Zomato, the leading foodtech platform, has reported a marked increase in its revenues, largely due to the introduction of a platform fee last August.
The company’s Q1FY25 Shareholders’ Letter and Results reveals that Zomato collected INR 83 crore through this fee by the end of March 2024, with significant contributions from recent quarters.
Quarterly Breakdown of Platform Fees
In the financial year 2023-24 (FY24), Zomato’s platform fee earnings were segmented as follows:
- Q2 FY24: INR 13 crore
- Q3 FY24: INR 37 crore
- Q4 FY24: INR 33 crore
The sequential increase in platform fees culminated in a record INR 53 crore for the first quarter of the financial year 2024-25 (Q1 FY25).
This marks a notable 60.6% increase from the INR 33 crore collected in Q4 FY24.
Incremental Fee Hikes
Zomato implemented multiple fee hikes to achieve these figures:
- Initially, the platform fee was set at INR 2 per order.
- On New Year, the fee was raised to INR 4 per order.
- In April, the fee was further increased by 25% to INR 5 per order.
- Most recently, in June, the fee reached INR 6 per order.
Customer Metrics and Revenue Impact
Despite the increases in platform fees, Zomato’s average monthly transacting customers remained relatively stable, showing modest growth:
- Q1 FY24: 1.75 crore
- Q2 FY24: 1.84 crore
- Q3 FY24: 1.88 crore
- Q4 FY24: 1.9 crore
- Q1 FY25: 2.03 crore
The platform fee, along with revenue from operations and customer delivery charges, has been a key driver of Zomato’s adjusted revenue.
The company reported a 55.8% year-over-year growth in adjusted revenue, reaching INR 13,545 crore in FY24, up from INR 8,693 crore in the previous fiscal year.
Financial Performance and Future Outlook
Zomato’s strong financial performance continued into Q1 FY25, where it recorded a consolidated net profit of INR 253 crore, a multifold increase year-over-year.
Revenue from operations in Q1 FY25 jumped by 74% to INR 4,206 crore compared to INR 2,416 crore in the same quarter the previous year.
The company’s profitability streak, initiated in Q1 FY24, has been sustained, with Blinkit playing a significant role in driving growth.
As Zomato continues to adjust its fee structures and expand its service offerings, it is well-positioned for sustained financial success in the coming quarters.
Industry Context
Zomato’s competitor, Swiggy, also introduced a standardised 2% collection fee on all orders starting from December 20.
This move aligns with the industry’s trend towards implementing platform fees to bolster revenue amidst rising operational costs.
Zomato’s strategic fee adjustments and strong financial performance highlight its resilience and adaptive strategies in the competitive food delivery market.
With continued growth in user base and revenue, Zomato is set to maintain its leading position in the industry.
