The National Restaurant Association of India (NRAI), representing the collective voice of the Indian restaurant industry, strongly opposes the recent foray of food delivery giants Zomato and Swiggy into quick commerce through private-label food delivery. This move undermines the principles of fair competition and poses a significant threat to the viability of thousands of restaurants across India.
Zomato and Swiggy, originally established as marketplace platforms, are now leveraging their dominant positions and access to restaurant data to venture into private-label food delivery either directly or via their subsidiary. This strategy not only cannibalizes the business of restaurants that rely on these platforms but also raises serious concerns under the Copyright Act and related laws.
Violation of Marketplace Neutrality
As marketplace platforms, Zomato and Swiggy were built on the premise of providing equal opportunities for all restaurant partners. Their entry into delivering food through private labelling and selling on their platforms and also delivering private labelled food via their own quick commerce platforms such as Blinkit Bistro and Swiggy Café / Snacc fundamentally violates this neutrality, creating an uneven playing field. By monetizing data derived from restaurant partners, they are exploiting a conflict of interest that could decimate the very ecosystem they claim to support.
Legal Recourse Underway
The NRAI views this as a clear case of misuse of private labels, infringing upon intellectual property rights under the Copyright Act. We are committed to pursuing all available legal remedies to safeguard the interests of the restaurant industry. This includes filing complaints with relevant regulatory authorities and initiating legal action to prevent Zomato and Swiggy from monopolizing the market.
Speaking on the announcement, Sagar Daryani, President of the NRAI, said, “Quick commerce in food is here to stay, grow and add more zing to the food delivery space. People want more convenience and so it will add an edge to the restaurants that can adapt to it. We are completely for it. What we are absolutely not okay with is Zomato and Swiggy doing private labelling and selling food by themselves. In Zomato via Blinkit’s separate Bistro app and Swiggy launching Snacc for quick food delivery. They have all our data which they do not share with us. For us there is complete consumer masking. We have no reason to not believe them migrating our customer to the products they sell as private labels on their apps. Be it data from a tea brand, biryani or momo. We are definitely considering taking a serious legal route. As long as these aggregators are okay working with restaurants and enable restaurants to go quick, we’re absolutely fine with it but we will not want to be demolished as an industry where they end up selling our similar products. This has not been allowed for even larger E commerce players operating in the marketplace. We were always given a verbal assurance by the aggregators that they would never resort to private labelling. This is definitely a breach of trust is what we feel. Our businesses will get severely impacted with these platforms launching their private labels.”
