Restaurateurs flag concern at Zomato, Swiggy entry into private labelling, dining-in

Daryani highlighted that food aggregators have also entered the dining-in space, for which they are charging commission on reservations and attracting customers through high discounting.

“In delivery, there’s some service involved. In dining-in, there is no service involved. They’re just bringing the customer to you. They have zero role to play in the entire experience of the customer. So why should they charge? Today, they are charging 3-5 per cent, tomorrow they’ll make it 7 per cent and 10 per cent and 15 per cent. You can’t trust them – they have just done lip service all these years and haven’t really walked the talk,” he said.

In a letter to restaurant partners, Zomato CEO Deepinder Goyal said Bistro is not an existential threat to the restaurant industry. “Bistro is not a ‘private label’ or ‘Zomato kitchen.’ In the past, I have expressed that Zomato as a restaurant-aggregator will never compete with its own restaurant partners, unlike players such as Amazon who sell their own private labels on Amazon,” Goyal said.

“Zomato has fully backed this commitment by never opening a physical restaurant and will NOT use Zomato as a distribution channel for kitchens that we do. Bistro is a separate app, and its menus are curated using publicly known snacking patterns. The Bistro team has no access to data that would create an unfair playing field,” he added.

At the town hall, Riyaaz Amlani, CEO of Impresario Entertainment & Hospitality Pvt Ltd, which runs the popular Social outlets, suggested that restaurants should offer better deals to customers who dine-in directly rather than through aggregator platforms.

“Since June till now, we have seen 20 per cent of our dining-in traffic coming in through the aggregator business. That is huge. If they can capture 20 per cent (since June), in one year they will capture 40 per cent. But have my AOVs (average order value) gone up? No. Have my actual walk-ins gone up? No,” Amlani said.

NRAI’s Daryani emphasised the need for more players in the market and added that in the last 6-9 months in Bangalore, roughly 20 per cent of the deliveries were made through the Department for Promotion of Industry and Internal Trade’s Open Network for Digital Commerce (ONDC).

“From the learnings there, we’ll try and incorporate this across the country. Because of these practices of aggregators, we are being pushed to the wall. We feel there is a very strong need for various alternative channels. ONDC could be one of them… but with this whole duopoly play, we are getting sandwiched,” he said.

In 2021, NRAI had filed a petition with the Competition Commission of India (CCI) accusing Zomato and Swiggy of abusing their dominant market positions. “The CCI investigation is still on. There were media reports that the CCI has found some violations, but we haven’t got a copy of it,” Daryani said. According to him, NRAI plans to update their CCI petition with more recent complaints.

“We’ve got complaints from many of our members that Zomato Everyday and Swiggy Daily are in the disguise of home chefs but they’re actually buying from commercial kitchen operators and they’re buying in bulk,” Daryani added.