For now, while the platform fee line item does not generate profits, it certainly helps cushion the blow.
When Delhi resident Shivam Bhalla ordered dinner on Swiggy last week, he noticed something he once barely paid attention to -- a small platform fee tacked onto his bill. Once a negligible Rs 2, the charge has crept up steadily, by 600 percent now, to as much as Rs 14 in recent months.
Now, it is hard to miss.
"It adds up, but honestly, I don't mind paying a little extra for the convenience," Bhalla said, reflecting a sentiment shared by many urban consumers who have grown used to paying for speed and ease.
What began as a token experiment in food delivery back in April 2023 has now become a fixture across e-commerce. From Swiggy and Zomato to Flipkart, Amazon, Myntra and Ajio, nearly every major platform now levies a platform fee to make each order more profitable.
A simple back-of-the-envelope calculation showed that all e-commerce companies that levy a platform fee bring in a total of about Rs 3,500-4,000 crore annually. The figure is a simple calculation of estimated daily order volumes multiplied by the per order fee and annualised, giving a sense of the scale even though actual receipts may vary.
For now, while the platform fee line item does not generate profits, it certainly helps cushion the blow.
"Platform fees are not a major revenue driver for companies yet. They mainly cover operational costs," said Ashish Dhir, Senior Director - Consumer and Retail at consulting firm 1Lattice. "It has been accepted by consumers. Frankly, customers don't have much choice. Platforms have levied the fees, and people end up paying for it."
As companies, especially Swiggy and Zomato, have been steadily increasing the platform fee over the past months, it has certainly become an additional source of income.
Dhir added that while platform fees are now a steady stream, they remain supplemental. "It may not be accepted by all consumer sets, but as long as the increases are modest, it will continue to contribute to revenues without pinching too much," he said.
Analysts said companies will continue to toe the line and will keep pushing up the platform fee as long as they do not see it impacting order volumes.
With daily orders of over 2 million for Swiggy and 2.3-2.5 million for Zomato, according to industry estimates, these charges alone could contribute more than Rs 1,000 crore annually to each firm's topline.
It is especially crucial as companies invest in other units, like quick commerce and general app upkeep.
Small amount, big contribution
For companies where losses continue to mount despite surging revenues, the platform fee component has become one of the few dependable ways to shore up margins.
"Platform fees are still a small percentage of overall revenue, but given the daily volumes, the contribution is significant. Without it, profit margins would take a big hit," said Satish Meena, founder of research firm Datum Intelligence.
Swiggy reported a net loss of Rs 1,081 crore in the June quarter, dragged down by Instamart, its quick commerce arm. Zomato's profit shrank 90 percent year-on-year to Rs 25 crore in the same period.
Meena said fees have become one of the few levers available to food delivery companies.
When asked about the key drivers of margins and if the platform fee was a primary component, Akshant Goyal, group CFO, Eternal (formerly Zomato), in an earnings call earlier this year, said: "I don't want to be too specific here...the business economics here are a function of multiple levers, and it's the small optimisations that add up and result in margin expansion."
At the same time, restaurants are pushing back on commissions, and new entrants like Rapido are serving up new offerings like zero-commission models, and more.
"There is little room to raise take rates now. The only way to grow topline now is either to cut incentives for delivery workers or charge customers more," Meena from Datum Intelligence said.
Not just food delivery
The picture is similar in large ecommerce marketplaces. Flipkart and Amazon each levy a Rs 5 charge on every order -- Flipkart calls it a platform fee, while Amazon labels it a marketplace fee.
Based on daily order volumes of 3.6-4 million for Flipkart and 3.3-3.8 million for Amazon, according to industry sources, this adds up to roughly Rs 1.8-2 crore in collections every day, or about Rs 600-700 crore annually for each.
It should be noted that these are back-of-the-envelope calculations that may vary depending on exact volumes, refunds, and cancellations.
For Flipkart, this provides another lever to improve margins as it works to cut burn ahead of a potential India listing.
Flipkart Internet, its marketplace arm, narrowed losses by 41 percent to Rs 2,358 crore in FY24 even as revenue grew 21 percent to Rs 17,907 crore, and its board has asked chief executive Kalyan Krishnamurthy to halve monthly cash burn.
Amazon is on a similar path. Its marketplace arm, Amazon Seller Services, trimmed net loss by 29 percent in FY24 to Rs 3,470 crore while revenue rose 14 percent to Rs 25,406 crore. Here too, the Rs 5 charge may look modest, but at scale it provides a steady inflow that improves operating leverage.
Operators acknowledge that the fee has become essential. "Margins in this business are razor thin," said a senior ecommerce executive, requesting anonymity. "The platform fee is one way to balance costs and revenues. Without it, companies would have to depend more heavily on subsidies or cut back on incentives, which is difficult to sustain."
Style, at a cost
Fashion platforms have gone further still. Myntra charges Rs 25 per order and Ajio Rs 19.
With daily order volumes of 0.5-0.7 million for Myntra and 0.2-0.3 million for Ajio, according to industry estimates, this works out to Rs 1.2-1.7 crore in daily collections for Myntra and Rs 40-60 lakh for Ajio. Over a year, that translates into Rs 450-640 crore for Myntra and Rs 140-200 crore for Ajio.
"In categories like fashion, platforms want to nudge customers to increase their cart values and reduce returns... the platform fees, therefore, give a little cushion to get some money out of (potential) returns," said Meena. Returns can spike to as much as 40 percent during the festive season, compared with about 25 percent in quieter months -- costs that eat into margins if not offset.
A non-refundable platform fee helps cushion that blow, too.
The practice is not limited to food and fashion. Quick commerce players such as Blinkit, Zepto and Instamart levy "handling fees" of a few rupees per order, while ticketing platforms like BookMyShow, IRCTC and several travel portals routinely add a "convenience fee" to bookings -- underscoring how the model has become standard across industries..
Regulatory radar
Analysts, however, caution that incremental hikes have so far gone largely unnoticed, but beyond a certain point, especially in high-frequency categories like food delivery and grocery, customers may start to push back.
And the risk is not just about consumer sentiment. If fees climb further, platforms could also attract regulatory attention. Globally, watchdogs in the US and EU have begun cracking down on 'junk fees' -- mandatory add-ons that are not always transparent to customers but are included at checkout.
In the US, regulators have pressed ticketing platforms, airlines and hotels to disclose these fees upfront or roll them into headline prices, while the European Commission has warned ecommerce and travel firms against misleading add-ons.
In India too, customers have voiced frustration on social media about multiple small charges being stacked on orders. For now, though, the platform fee is entrenched.
What began as a token experiment has turned into a continuous, non-seasonal stream of revenue. Whether labelled a platform fee, handling fee or marketplace fee, it has become one of the few dependable levers companies can pull to shore up their financials. For consumers it may be an irritation, but for platforms battling wafer-thin margins, it has become a crucial cushion.