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F&B merchants bemoan ‘too high’ delivery fees
Online platforms have fundamentally changed the way food outlets operate, offering merchants wide market access on the one hand but also increasing competition on the other, while taking a sizeable chunk out of merchant's revenues in platform fees.
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Food delivery platforms can be a boon for customers, but they can be a double-edged sword for merchants, especially micro, small and medium businesses, as they must pay a platform fee of at least 20 percent. (Sadjang Bakmie/-)
T
he decade-long rise of online food delivery platforms has fundamentally changed the way food outlets operate, creating joy for some merchants but resentment for others.
On the one hand, merchants rely on these platforms to reach more potential customers; on the other, platforms put small businesses in fierce competition with one another while demanding sizeable fees from merchants to generate revenue.
The three biggest players, GoFood, GrabFood and ShopeeFood, charge platform fees of at least 20 percent per item, an amount some merchants say they find agreeable but others say greatly impacts their performance.
“It’s 50:50 when it comes to whether or not the [platform fee] is fair, because we have no say in the fees a certain platform [charges]. But at the same time, that platform is of central importance for micro, small and medium enterprises [MSMEs],” says 24-year-old entrepreneur Bryan (not his real name).
Most merchants add 20 percent to the prices of items they sell on these platforms to maintain profit margins, which can make their products less affordable for customers.
Read also: High e-commerce fees squeeze small F&B firms’ margins
Bryan, who sells his Satebox product to customers directly for Rp 25,000 (US$1.62), said he had no choice but to mark up the price to Rp 30,000 for delivery platforms. He added that that price tag had turned some customers off, as the figure looked “psychologically more expensive because it starts with a three”.
