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Jayant Mundhra

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Dexter Capital Advisors • 6m

There's this crazy pattern about Zomato’s platform fees. And this might be the single most profit-making strategy for its food delivery vertical. Consider this chronology: .. Q2FY24- Platform fee of Rs 2 introduced in August. Q3FY24- Platform fee hiked by Re 1 to Re 3 in October. Q4FY24- Platform fee hiked by another Re 1 to Rs 4 in January. Q1FY25- Platform fee has now yet again been raised by Re 1 to Rs 5 :) .. For about 20L deliveries (avg) Zomato does a day, this translates to what income per quarter? At Rs 2: Rs 36cr At Rs 3: Rs 54cr At Rs 4: Rs 72cr At Rs 5: Rs 90cr! This is crazy good. But, is this trend sustainable? .. How long can you keep shoring up profit growth via this tool? There's definitely a ceiling to this approach. And by the time this strategy saturates, they will surely need other levers to bring in more money. Maybe advertising income will have to shoot up. Or commission income. Or maybe some other new fee? Or a higher degree of cost optimisation? What do you think?

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