With over 2,000 restaurants now logged out of food delivery apps across the country, the impasse over deep discounting and predatory pricing still remains unresolved as the standoff between food aggregators, restaurants and restaurant associations enters its second week.
Here’s a closer look at what has intensified this ongoing war between different stakeholders of the food delivery ecosystem over the past few days :
January 2019: NRAI says online food companies are making their consumers “discount addicts”. Restaurants ask government to clarify whether online food-ordering is covered by the FDI policy in ecommerce and if such companies should comply with guidelines prohibiting them from influencing prices and operating inventory-based models, including their own kitchens.
July 4, 2019: The Department for Promotion of Industry and Internal Trade (DPIIT) summons Swiggy, Zomato, Foodpanda and Uber Eats for a meeting. This follows complaints from restaurants that food aggregators are engaging in “deep discounting” and “predatory pricing”. It also comes in the backdrop of Commerce and industry minister Piyush Goyal admonishing global e-commerce players for “hurting” local kiranas and small retailers through their “predatory pricing” practices.
August 8, 2019: Zomato faces resistance from restaurants over its all-you-can-eat dine-in programme, re-igniting an ongoing battle with food aggregators. Several restaurants take to Twitter and argue that loyalty programme lead to food wastage, while earnings hardly improve. Restaurant associations, too, say they’re receiving more than the usual number of complaints from members, who are seeking their intervention.
August 15, 2019: As many as 300 prominent restaurant brands in Gurgaon log out of aggregators and table reservation services including Zomato, EazyDiner, Nearbuy, MagicPin and Gourmet Passport, citing “unsustainable” deep discounting.
August 20, 2019: US-based online retailer Amazon proposes competitive commissions to lure restaurants onto its platform and break away exclusivity from Zomato and Swiggy, as it starts onboarding eateries.
August 21, 2019: Online food delivery and dine-in aggregators including Zomato agree to tone down and rationalise offers they make to their members, including deep discounts, after a series of meetings held over the past two days.
August 22, 2019: Restaurants continue to stay off Zomato, even as Zomato announces to reconstruct its ‘Gold’ service to help drive better margins for the restaurants, an effort that does not go well with the NRAI. The restaurants’ body says it’s not yet satisfied with the latest Zomato changes, calling the decision a “knee jerk reaction” and threatens restaurants won’t come back until the “deep-discounting phenomenon” is off the table.
The same day, Deepinder Goyal, cofounder and CEO, Zomato retaliates in a series of tweets saying there will be no further negotiations with its partner restaurants on the company’s discount programmes – Infinity and Gold – anymore. He directs his ire at NRAI president Rahul Singh, claiming that Singh is spearheading the #LogOut campaign to “sabotage aggregators.”
August 23, 2019: Singh hits back at Goyal by starting a new campaign #ZoGoisNoGo. Zomato issues a statement saying – “We stand by our 10-point improvement plan that addresses the collective concerns of our restaurant partners while keeping our users’ best interests in mind.”
August 26, 2019: Minister Piyush Goyal calls on Swiggy COO Vivek Sunder at the ET Startup Awards in Bangalore to deliberate on the ongoing fracas between restaurants and online food delivery platforms and draw up a solution swiftly. Swiggy’s Sunder tells Goyal that some of NRAI’s demands “on sharing customer data were a breach of privacy.”
August 27, 2019: NRAI sends notices to Swiggy, Zomato, Uber Eats and Foodpanda, flagging “serious concerns” over alleged “lack of transparency, deep discounting and abuse of dominant position by the online delivery aggregators”. Restaurants continue to stay out of Zomato Gold.
August 28, 2019: A restaurant owners’ body seeks a meeting with online food delivery companies to discuss the issue of commissions and private brand cloud kitchens, in a move that could hurt Swiggy. While all of this is happening, Swiggy quietly launches two new private brands, which will make negotiations with NRAI tricky.