Prelims - Current events of National & International importance and General Science.
Why in News?
A Rs.2 platform fee on Swiggy in 2023 began as a trial but soon became a trend across all the e-commerce and quick commerce platform.
E-commerce –It refers to buying and selling of goods and services online, focuses on large inventories and scheduled deliveries.
It includes everything from purchasing clothes and electronics to booking vacations and paying bills. For example, platforms like Amazon, Flipkart, and Shopify etc.
Quick commerce -Faster and more immediate version of e-commerce.
It caters to the growing need for speed in online shopping, ensuring deliveries within minutes to a few hours, which prioritizes speed and proximity.
It ensures that these urgent needs are met almost instantly. For example, platforms like Blinkit, Zepto, and Instamart etc.
Platform fees – These are charges imposed by online marketplaces, service providers, or software platforms for using their infrastructure and services to conduct transactions or access functionalities.
It isnow being charged across all major food and grocery delivery platforms.
Reasons cited by commerce platform –It helps the platforms running smoothly, invest in product improvements, and continue delivering a smooth and convenient experience for users.
Hide trick used by commerce platform - Companies avoid raising base prices because shoppers often compare item prices across apps before buying.
If the visible price looks high, people might choose a cheaper option elsewhere.
So instead, platforms add fees at checkout, where customers are already more committed.
Consumer’s concern - The fees are a growing concern from a consumer point of view.
When a product is sold on platforms, makes harder for customer to get a good deal.
If all companies follow the same pattern of hiking fees, it might seem like they're indirectly group up to inflate prices instead of competing.
This raises concern around anti-competitive practices, entities and platforms acting as a cartel to increase prices for consumers.
Transparency asymmetry–Customers have a right to know clear information about the fees they’re being asked to pay, reduces the exploitation.
