Last week, NRAI, which represents over 500,000 restaurants across the country,
sought the intervention of the Competition Commission of India to resolve what it alleged were “anti-competitive practices” by the food aggregators.
On Monday, NRAI submitted what they said was evidence of these alleged practices by Swiggy and Zomato, such as charging exorbitant commissions, delaying payments, and forcing restaurants to give discounts. The association said in a statement that these practices have forced many restaurant owners to work in “extremely stressful conditions” and put many establishments on the verge of closure. “Restaurants are running at a loss since they cannot meet their expenses, yet they have had to rely on Zomato and Swiggy due to the pandemic curbs,” it said.
The association also alleged that the food aggregators delisted restaurants if they offered customers better rates through other channels. Many restaurants in recent months have opted for direct ordering to bypass food aggregators while choosing to remain listed on Swiggy and Zomato.
In the past two weeks, both Swiggy and Zomato have expanded deep discounts. In an
interview with ET, Zomato CFO Akshant Goyal and cofounder Gaurav Gupta said that aggressive discounting tactics will remain an important way of acquiring more users.
On Thursday, when Zomato
announced its plan to list on the national exchanges, Goyal said NRAI’s concerns were “misplaced” in response to a question. He later said that sharing customer data with restaurants, another of NRAI’s demands, was not not a good idea. “We don’t think that’s the right thing for the industry. Customer privacy is very important to us,” he said.
Anurag Katriar, president of NRAI, said, “We have received overwhelming support from our restaurant partners and the industry in general. Many members have shared their personal experiences of misuse of power by these food aggregators. This prompted us to file additional information with the CCI to ensure that our continued efforts bear fruit.”
Zomato and Swiggy did not respond immediately to ET’s queries.