NRAI sends notices to Swiggy, Zomato, others on deep discounting, lack of transparency

The National Restaurant Association of India (NRAI) has sent notices to online delivery aggregators, raising concerns over alleged lack of transparency, deep discounting and abuse of dominant position in the market.

The notices were sent to Swiggy, Zomato, Uber Eats and Foodpanda, according to a  statement issued by NRAI.

“All the standalone and chain restaurateurs across India have displayed their strong resentment on the prevailing concerns such as deep discounting, data masking and high and uneven commission charges by online food aggregators. There is a very strong demand to immediately extend the #Logout movement to the online delivery vertical as well. However, as a responsible industry body, we want to actively engage with these delivery aggregators to find a solution,” said Anurag Katriar, head of Mumbai Chapter of the association.

Deep discounting is impacting the growth, employment and sustainability of thousands of small restaurants and startups in the country, the association said in the statement. 

“We are not against the technology platforms, but our concerns are largely around these aggregators misusing their dominant position to indulge in predatory behaviour,” Katriar said.

Katriar had tweeted yesterday that Zomato has already broken the promise of not selling its discounting offer Zomato Gold below the committed price.

So much so for keeping promises @ZomatoIN!

You promised never to sell Gold under 1800, but selling for 1620 within days of that.

And u also talked about restricting unlocks & here u r giving an incentive of extra unlocks for recommending friends!#Logout @NRAI_India pic.twitter.com/RFYc1g7Dhd

— Anurag Katriar (@KingKatriar) August 27, 2019

Deepinder Goyal, founder of Zomato, tweeted back that they will fix it as soon as possible, and said new memberships cannot be bought below the fixed price.

Thanks for pointing this out, Anurag. Will get this looked into and fixed asap. As of now, referral and renewal flows still don’t have floor pricing checks. We need to fix them. Any new memberships cannot be bought under 1800.

— Deepinder Goyal (@deepigoyal) August 27, 2019

Timeline of the  ongoing #logout campaign

23 Aug: Zomato founder Deepinder Goyal said he is logging out of the discussions with restaurant owners over the deep discounting issue. Other aggregators like MagicPin, EazyDiner, Nearbuy and Dineout maintain they are willing to work with the NRAI to address the issues.

21 Aug: The tough stance adopted by the restaurants against the food aggregators forces  booking and subscription platforms like Zomato and Swiggy commit to revising their terms of engagement over deep discounting 

20 Aug: US-based retail giant Amazon comes up with a competitive commission to attract restaurants on its Amazon Restaurant platform.

19 Aug: The #logout campaign leads to several restaurants exiting food aggregator platforms. Zomato founder Deepinder Goyal requests restaurant owners to stop the #logout campaign.