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

• Despite a post-Covid rebound, restaurants continue to be at loggerheads with food aggregators, Zomato and Swiggy.
• At the heart of the discontent boiling between restaurants, Zomato and Swiggy are commissions and data sharing.
• While the NRAI has been vehemently against Zomato and Swiggy, its Hyderabad chapter founder said he believes a solution is possible.

Restaurants and food aggregators Zomato and Swiggy have been at loggerheads – despite still working together – when it comes to two things: commissions and data sharing. And while the National Restaurant Association of India (NRAI) has not been able to find a solution to these two problems yet, its Hyderabad chapter founder says a solution is still possible.

Discontent has been 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 for restaurants – with their discounts, commissions, dine-in programmes, customer complaints and data sharing.

While NRAI has been vehemently against some of the practices followed by Zomato and Swiggy – with one delegate at the conclave even calling these food aggregators “parasites” – Mehmood took a more moderate approach.

In conversation with Business Insider India, Mehmood said a middle ground can be discovered through dialogue. The middle ground here is a commission structure that is acceptable to restaurants, and a transparent data sharing mechanism between the two sides.

“See, there are two issues. One is commissions, and the other one is the data sharing [aspect]. At some point these aggregators will give in,” he told Business Insider India.

“We can't be locking horns with people who are 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 should stick to food delivery’

Broadly explaining how the restaurants and food aggregators can co-exist, Mehmood said that both sides should stick to their businesses.

“We're not into food logistics right, we are into food preparation. You [Zomato and Swiggy] are into food logistics. We’ll use you to deliver food. You're not going out of business. You share the data to the customers and you come up with better pricing,” Mehmood said, equating Zomato and Swiggy with shipping and courier companies like FedEx.

He also touched upon how Zomato’s dine-in programmes further frayed its relations with restaurants. Mehmood was key to the “#Logout” campaign against the Zomato Gold membership programme, which offered discounts on dining to members.

“The way forward will be programmes launched by and for the industry. We’ve got DotPe that will build a tech platform, and the data will remain with us,” he added, saying that this will help restaurants reduce dependence on Zomato and Swiggy. DotPe is a commerce and payments platform that also offers catalogue discovery services.

The post-COVID boom

The food and beverages industry was amongst the worst affected due to the Covid-19 pandemic, with the initial lockdowns resulting in nearly a third of the workforce leaving their jobs. However, it has quickly got back on its feet.

Mehmood told Business Insider India that their revenues had exceeded the pre-Covid levels – and that has been in some part due to better organisation amongst restaurants.

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

“Business growth is steady, it’s been growing year on year. It’s a more exciting proposition now, and the customers are more educated. They want more options to eat out, urbanisation is happening much more,” he added, explaining the rebound in the F&B industry since the Covid pandemic.

Mehmood underlined that turning the industry into a more organised sector post Covid has helped it become more resilient. However, there’s still a lot of work that needs to be done as two out of three food outlets are still in the unorganised sector, according to him.

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