Swiggy and Zomato, India’s leading food delivery platforms, are expected to scale back food discounts as they focus on sustainable pricing strategies to maintain profitability and leadership. This move comes amidst rising competition in quick commerce, a segment that is reshaping their operational priorities.
Shift in Discount Strategies
Historically, discounts have been a key driver for customer acquisition. However, the growing pressure in the quick commerce space is prompting these platforms to reconsider their pricing models.
“Increased competition in quick commerce is pushing platforms like Swiggy and Zomato to rethink discounts and adopt tiered pricing strategies in food delivery,” said Mitesh Shah, co-founder of IPV and partner at Physis Capital.
Recent changes support this trend. Over the past year, Swiggy and Zomato have reduced the free delivery radius under basic subscriptions from 10 km to 7 km. They are also optimizing discounts to improve delivery efficiency. For instance, discounts for smaller, long-distance orders encourage batching, while shorter routes emphasize larger cart values.
Benefits of Optimized Pricing
“These tailored discounts based on order size and delivery region improve efficiency and resources, supporting better unit economics,” Shah added. Such strategies maximize revenue per delivery ride while enhancing customer satisfaction.
Additionally, Swiggy’s premium ‘One Blck’ subscription model reflects an effort to monetize loyal users with perks like guaranteed on-time delivery and enhanced discounts. Zomato is reportedly exploring a similar tiered membership system.
Challenges in the Competitive Landscape
The entry of aggressive competitors like Magicpin, now the third-largest food delivery platform, could slow the tapering of discounts. An analyst noted, “Platforms can counter this competition through superior service, exclusive perks, and enhanced user experiences.”
Restaurants have borne much of the discount burden, often paying 5–10% of order value for promotions. “For a sustainable ecosystem, consumers must increasingly bear the cost of home delivery convenience,” said Pranav M. Rungta, vice-president of the National Restaurant Association of India (NRAI).
These developments come as Jefferies downgraded Zomato’s stock from ‘buy’ to ‘hold,’ citing concerns over profitability in the quick commerce segment.
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