How Swiggy And Zomato Are Eating Away At Your Budget

It’s been a busy week, and you’ve just settled into your couch, ready for some well-deserved relaxation. With a few taps on Swiggy or Zomato, and a 'cash debited' message from your bank, your favourite meal is on its way. It’s quick, it’s easy, but could this convenience be costing you more than you realise?

Picture this: Khushi is a 25-year-old, working a 9-5 job in Mumbai. From exotic sushi to the classic biryani, her Instagram feed is a mouth-watering collage of takeout boxes and dine-in experiences. Initially, it was an occasional treat, but soon, she found herself tapping on those apps almost daily. Within a few months, Khushi realised that her food delivery expenses had spiralled out of control, eating into her savings and affecting her budget.

She’s not alone. Many people are grappling with the same issue. With the rise in popularity of food delivery apps, could Swiggy and Zomato be ruining one's budget?

The convenience of cashless transactions has transformed financial behaviour. Digital payment methods, from UPI to e-wallets, have made transactions seamless.

India accounts for 46% of global digital transactions and UPI payments account for 80% of all such payments in the country, Reserve Bank of India Governor Shaktikanta Das had said in March.

This reflects the shift towards more frequent and often impulsive spending. A 2024 report by Amazon Pay India and Kearney India reveals that nearly 90% of Indian consumers with internet access prefer digital payment options for online purchases. Another research by the University of Adelaide and University of Melbourne also indicates that people tend to spend up to 30% more, when using credit or debit cards compared to cash. This is because the immediate physical sense of parting with money is absent.

The frictionless experience of ordering food with just a few taps eliminates the psychological barriers associated with spending, leading to increased expenditure, as noted in a research published in the Journal of the Association for Consumer Research. "Cashless payments are less likely to elicit the negative arousal that is appraised as the 'pain of paying'," it said.

Additional charges, including delivery fees, service charges, and packaging costs, can inflate the total bill by up to 20%, as per a study by IIM Bangalore. Service fees, while seemingly small, add up over time, especially for frequent users. Additionally, packaging costs contribute to the final amount, further straining pockets. 

Promotional offers and discounts can sometimes lead to unintended spending. For example, a 'buy one get one free' deal might seem like a bargain, but if it encourages one to order more than intended, the savings are negated by the additional items purchased. Similarly, 'free delivery' offers may be offset by higher prices on menu items or increased service fees.

Ever ordered food simply out of boredom? This phenomenon, known as the 'boredom meal', is becoming increasingly common. A 2023 Zomato survey on Indian ordering habits found that nearly 25% of food orders were placed between 8 p.m. and 11 p.m.

When people use food delivery services as a remedy for boredom, they’re not just paying for a meal but also for instant gratification. This kind of spending, driven by emotional impulses, can lead to overspending and disrupt overall budget, according to Harshvadhan Roongta, chief executive officer, Roongta Securities Pvt.

At the end of the day, Swiggy and Zomato are businesses that want to stay profitable. Techniques like push notifications, limited-time offers, and personalised recommendations are made to trigger cravings and impulsive buying.

Research by NIT Tiruchirappalli, highlights that personalised suggestions and push notifications significantly increase the likelihood of impulse purchases.

Allocating a specific amount for food delivery each month could help in saving one's budget from being eaten up.

Roongta encourages 'envelope budgeting' for food delivery/eating out. This involves dividing in-hand income into categories like rent, outings, etc. Cash meant for expenditure in these categories is kept in defined envelopes. "This ensures that you spend only a certain specified amount, and it has been quite effective in curbing overspending," Roongta said.

For cashless transactions, he advises making a separate envelope for credit debt, and adding money to it by removing it from the food delivery envelope, guaranteeing that one sticks to the planned budget. If one mostly used digital payments, loading a set amount into a prepaid wallet could work as well, he said.

When it’s gone, it’s gone and this can help mimic the psychological impact of spending cash. Disabling notifications can be helpful as well.

So next time you’re about to order that late-night biryani or mid-afternoon pizza, take a moment to think about Khushi and her depleting bank balance. With a bit of mindfulness and budgeting, you can savour the convenience of food delivery without letting it devour your finances.