In a move aimed at increasing orders and gaining market share, one of India’s leading hyperlocal delivery platforms has significantly lowered the fee it charges restaurants. Magicpin announced it will reduce its commission from restaurants by nearly one-third to just Rs. 5 per order for the remainder of 2024.
The fee cut is a strategic decision by Magicpin to improve its competitive positioning at a time when others in the industry have gone the opposite route. Rivals Zomato and Swiggy both increased their commissions to restaurants to Rs. 10 per delivery last month. By positioning its fees at half the level of competitors, Magicpin hopes to attract more restaurants to its platform and see an uptick in daily orders.
The results so far seem promising. Magicpin saw orders double year-over-year during the festive season in October, with over 500,000 food deliveries completed. On a daily basis, the company now processes a massive 150,000 orders thanks to its growing presence on the ONDC open network.
With a new lower price point and strong growth trajectory, Magicpin aims to bring 100,000 additional restaurants and cloud kitchens onto its platform. The company has already expanded its restaurant partner base significantly from just 22,000 when it joined ONDC last year to 70,000 currently. An investment of Rs. 100 crore will back Magicpin’s goal to further penetrate the decentralized ONDC network and food delivery market.
By slashing commissions and leveraging open infrastructure, Magicpin hopes to outsmart bigger rivals and stake its claim as the go-to choice for restaurants. Only time will tell if its bold pricing gamble pays off in the highly competitive online food delivery space.
