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Can’t close horns with Zomato and Swiggy, says restaurant body

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  • Despite a post-Covid rebound, restaurants remain at odds with food aggregators, Zomato and swiggy.
  • At the heart of the discontent that boils between restaurants, Zomato and Swiggy are commissions and data sharing.
  • While the NRAI fiercely against Zomato and Swiggy, the Hyderabad chapter founder said he believes a solution is possible.

Restaurants and food aggregators Zomato and Swiggy disagree — despite still working together — when it comes to two things: commissions and data sharing. And while the National Restaurant Association of India (NRAI) has yet to find a solution to these two problems, the Hyderabad chapter founder says a solution is still possible.

Discontent is steadily brewing in the industry against two unicorns – Zomato and Swiggy. Over the years, these two food aggregators have become a thorn in the side of restaurants — with their discounts, commissions, dining programs, customer complaints, and data sharing.

While the NRAI was vehemently against some of the practices of Zomato and Swiggy — with one delegate at the conclave even calling these food-gatherers “parasites” — Mehmood took a more moderate approach.

Speaking to https://londonbusinessblog.com/ India, Mehmood said a middle ground can be discovered through dialogue. The middle ground here is a commission structure acceptable to restaurants, and a transparent mechanism for sharing data between both parties.

“Look, there are two problems. One is commissions and the other is data sharing [aspect]. At some point, these aggregators will give in,” he told https://londonbusinessblog.com/ India.

“We can’t argue with people related to the industry. You have to find a way to work together and I’m sure a solution will be found,” he added.

‘Food aggregators must stick to food delivery’

Broadly explaining how the restaurants and food aggregators can coexist, Mehmood said both parties should stick with their business.

“We are not in food logistics, we are in food preparation. you [Zomato and Swiggy] deals with food logistics. We use you to deliver food. You will not go bankrupt. You share the data with the customers and you come up with better prices,” said Mehmood, who equates Zomato and Swiggy with shipping and courier companies like FedEx.

He also noted how Zomato’s dining programs are further weakening relationships with restaurants. Mehmood was key to the “#Logout” campaign against the Zomato Gold membership program, which offered discounts on dinners to members.

“The way forward will be programs launched by and for the industry. We have DotPe that will build a tech platform, and the data will stay with us,” he added, saying this will help restaurants reduce reliance on Zomato and Swiggy. DotPe is a trading and payment platform that also offers catalog discovery services.

The post-COVID boom

The food and beverage industry was one of the hardest hit by the Covid-19 pandemic, with initial lockdowns leading to nearly a third of the workforce leaving their jobs. However, it is quickly back on its feet.

Mehmood told https://londonbusinessblog.com/ India that their revenues had surpassed pre-Covid levels — in part due to better organization among restaurants.

“Sometimes you need a shake-up to bring everyone together, and they always say, behind a dark tunnel there is light. So Covid was that tunnel for everyone,” Mehmood said.

“Business growth is steady, growing year after year. It is now a more exciting proposition and the customers are better educated. They want more options for eating out, urbanization is happening a lot more,” he added, explaining the upswing in the F&B industry since the Covid pandemic.

Mehmood underlined that turning the industry into a more organized sector after Covid has helped to become more resilient. However, there is still a lot of work to be done as, according to him, two out of three eateries are still in the disorganized sector.

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