A recent study suggests that ordering through popular food delivery aggregators in India translates to an additional annual financial burden of at least ₹12,000 for the average Indian household in major metro/ tier-1 cities.
The report titled “Food Delivery Unwrapped: Uncovering Hidden Costs on India’s Aggregator Platforms”was released by Mavericks India, an integrated marketing agency.
According to a release from the company, the aggregators’ pricing models have tiny layers of seemingly negligible amounts worked into them, which generate an overall annual ecosystem cost of ₹9,000-11,000 crores.
The report reveals an average aggregator premium of ₹46 per dish as compared to delivery orders placed on the restaurant’s own channels, and conservatively, this translates to an average of ₹12,000 for households in metros.
Aggregators also charge an additional ₹2 for packaging than restaurants, even though the packaging remains the same. When added up, this makes up for ₹400 crores of the annual ecosystem revenues, suggests the report.
“Incremental differences in fees, such as 150-200% higher delivery charges, are significant, and the cumulative financial implication of that can be substantial for consumers. Where 46% of restaurants don’t charge any delivery fees on their own channels, most of them do indicate it on aggregator platforms,” the release said.
As per the report, on platforms, desserts incur a 15% premium, while vegetarian items see 11% price bump compared to non-vegetarian options. It also suggests that delivery fees for dine-in restaurants are ₹6.5 higher on average compared to delivery-first restaurants on aggregator platforms.
“As convenience drives more consumers towards food aggregators, the hidden costs of delivery, packaging, and perceived membership benefits can often add up to a significant financial drain over time,” saidChetan Mahajan, Founder and CEO of The Mavericks India, commenting on the findings.
“According to behavioural economics, consumers are more likely to accept dispersed, smaller fees, than a large lump sum, which potentially explains the cost breakdown of these aggregators. Our report not only breaks down these costs but also advocates for greater transparency. Consumers should be able to make informed decisions about their spending,” he said.
According to the company, the report was based on data from more than 50 restaurants across two cities - Delhi-NCR and Bengaluru – and three aggregator platforms – Swiggy, Zomato and Magic Pin. The price data from the platforms was compared to the prices on the restaurant’s own platform and looked at various components including the base price of the item, delivery fees, packaging and handling charges, platform-specific fees and total GST including restaurant and delivery GST.
The ecosystem costs were arrived at based on average order frequency estimates of aggregators, derived from secondary sources, said the release.
Published - September 19, 2024 09:00 am IST
