Swiggy rules out zero-commission model, bets on Toing for growth

Indian food technology platform Swiggy has stated it will not adopt a zero-commission model for its restaurant partners, characterizing such a approach as a marketing tactic rather than a viable business strategy.

Rohit Kapoor, Swiggy's CEO of the food marketplace, explained that platform costs must be covered, and some form of charge will inevitably be necessary in the medium term. Swiggy does not charge restaurants for deliveries, unlike some competitors. The company believes a zero-commission model would shift costs to either consumers via higher fees or delivery partners through reduced payouts.

Instead, Swiggy is significantly investing in its new service, Toing, to broaden the Indian food delivery market. Toing, launched last September, targets budget-conscious customers like students and young professionals. Meals start at Rs 49, with most under Rs 250, and no delivery fee is charged. Swiggy anticipates Toing will attract new and previously infrequent users, as up to 70% of its customers order less than once a month, with price being a major barrier.

Swiggy projects Toing will drive food delivery Gross Order Value (GOV) growth of 2.5-3.5 times by FY31. Unlike rivals experimenting with micro-kitchen models, Swiggy exited those due to uncertain economics. Toing leverages its existing logistics network, focusing on low pricing and revenue streams from consumer fees, advertising, and reduced restaurant charges.

Furthermore, Swiggy's quick commerce service, Instamart, will fully transition to an inventory ownership model within the next two to four quarters. Instamart's GOV increased by 40% year-on-year in Q1 FY27 and is projected to become a business exceeding Rs 150,000 crore by FY31.