Winning Bizness Desk
MumbaiOrdering food through apps, watching OTT content and getting groceries in minutes are no longer as affordable as they once seemed. A combination of platform fees, delivery charges and hidden costs is quietly inflating household expenses. Even moderate usage of these services is now adding a noticeable burden on monthly budgets, especially in urban households.
Extra ₹900 spent monthly on frequent orders
If a user places around 12 food delivery orders a month, nearly ₹900 is being spent additionally without much notice. This includes approximately ₹180 as platform fees and ₹720 as delivery charges. These costs have been rising consistently each year, making convenience increasingly expensive for regular users.
Between 2023 and 2026, platform fees on apps like Zomato and Swiggy have surged nearly nine times. At the same time, menu prices listed online are typically 10 to 15 percent higher than what customers would pay at physical outlets, further increasing the overall bill.
Small payments combine into large monthly burden
The real concern lies in how these seemingly small payments accumulate over time. A ₹249 lunch or a ₹199 subscription may appear insignificant individually, but together they can add ₹2,000 to ₹5,000 to a family’s monthly expenses.
Key contributors to rising monthly spending include:
- Platform fees on food delivery apps
- Delivery and surge pricing charges
- Higher online menu pricing compared to offline
- Multiple OTT and app-based subscriptions
Interestingly, such business models have shown resilience even during economic slowdowns. During the weakest quarter of the Covid-19 pandemic in early 2020, sales of S&P 500 companies fell by 1.9 percent, while subscription-based businesses grew by 9.5 percent. Revenues of Netflix rose 16 percent, Apple Services grew 36 percent, and Spotify saw a 26 percent increase.
Inertia and complex processes keep users paying
Experts believe subscription-based models remain one of the most robust business structures of the past two decades. These models rely on direct payments from consumers and are designed to retain users efficiently.
According to a McKinsey report, users tend to cancel subscriptions only when prices rise significantly. However, most continue paying due to inertia, or the tendency to avoid action. The process of cancelling often requires effort and multiple steps, whereas continuing a subscription needs no action at all. This imbalance leads many users to keep paying despite limited usage.
Freemium models, where services start free and later convert to paid plans, retain up to 95 to 100 percent of customers over five years, largely due to this behavioural pattern rather than satisfaction alone.
Food delivery and OTT sectors see rapid expansion
Both food delivery and OTT sectors are witnessing sharp growth despite rising costs.
Key growth indicators include:
- Food delivery market valued at ₹69,000 crore in 2023
- Expected to reach ₹2.25 lakh crore by end of this year
- OTT subscription market at ₹8,200 crore in 2023
- Likely to grow to ₹11,191 crore this year
- Streaming audience crossed 60.1 crore users last year
Rising demand, convenience and changing lifestyles continue to drive expansion, even as costs climb.
Global tensions may push prices even higher
The ongoing conflict in the Middle East is beginning to reflect in global commodity prices. Crude oil, which had dropped to around $60 per barrel, surged to nearly $100 and currently remains close to $96.
Experts warn that if the conflict prolongs, inflation across several sectors could rise by more than 10 percent. Wealth management firm Mevenark has advised households to prepare for at least a 10 percent increase in overall expenses.
- Fuel price rise may impact delivery costs further
- Food and grocery prices could see upward revision
- Subscription and service charges may continue increasing
As digital convenience becomes a necessity, the cost of accessing it is steadily climbing, making budget management more challenging for consumers.
