NRAI to discuss issues with Swiggy, Zomato in mid-September

The National Restaurant Association of India (NRAI) will meet online food delivery companies Swiggy and Zomato in the second week of September to take a step closer to resolving the issues of deep discounting and arbitrary commissions, which is a major bone of contention between restaurant associations and food aggregators.

Earlier this week, NRAI met representatives of Swiggy and Zomato to deliberate on the matter and reach an amicable solution. Anurag Katriar, head of Mumbai chapter, NRAI told FE that the online platforms will submit a plan, outlining their approach to the issues in the meeting next month.

However, problems seem far from over – while Swiggy’s approach was ‘fairly constructive’, NRAI claimed Zomato’s meeting began with a false note as they stated their intention to introduce Zomato Gold to the delivery vertical as well. Zomato has capped the minimum order value at Rs 300 for the service. This means if a customer orders an item worth Rs 300 on Zomato, he will get another item worth the same price for free.

The move by Zomato comes after a nationwide logout campaign was launched against steep discounting resorted to by dine-in verticals of food aggregators and online restaurant reservation platforms by the association. Over 2,500 restaurants delisted themselves from the platforms. Zomato, however, logged out of the campaign saying aggregators are ‘being painted as bullies’.

In the meeting held with Swiggy and Zomato recently, NRAI suggested the platforms that there should be cap on discounts and aggregators should refrain from doling out discounts throughout the year. Discounts should be ‘episodic’, Katriar said.

Apart from online platforms’ business practice of deep discounting and unfair commissions that restaurants pay to aggregators, detailed discussions had also been held on data masking and bundling of services. Restaurants said delivery platforms refrain from sharing customer data with them, hurting prospects of building relationship with customers.

“There is an in-principle agreement to resolve these issues within specific timeline,” NRAI said in a statement on Friday. “Broad contours of resolving each issue was chalked out,” it added.

Speaking at an event in New Delhi, CEO of food delivery at Zomato, Mohit Gupta said the firm had a very good meeting with NRAI. Gupta said food aggregators had no conflict of interest with the industry and they are ‘deeply committed’ to the industry.

Rahul Bothra, CFO at Swiggy, said online food delivery platforms created more than five lakh delivery jobs in the last five years and launch of private labels by aggregators was an attempt to address gaps in meeting consumer demand.

Earlier this week, NRAI shot off letters to Swiggy, Zomato, Uber Eats and Foodpanda expressing concern over their predatory marketing practices and seeking a consultation on the same.