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Business News/ Companies / News/  NRAI wary of Swiggy, Zomato dine-in discounts
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NRAI wary of Swiggy, Zomato dine-in discounts

Zomato Pay and Swiggy Diner — two new discount-driven features — are being rolled out with offers of a host of benefits to diners

NRAI wary of Swiggy, Zomato dine-in discounts (REUTERS)Premium
NRAI wary of Swiggy, Zomato dine-in discounts (REUTERS)

In what may turn out to be another spat between restaurants and food aggregators, the National Restaurant Association of India (NRAI) on Friday cautioned its partner-members against programs being piloted by Swiggy and Zomato offering discounts and promotions on dine-in orders.

Zomato Pay and Swiggy Diner — two new discount-driven features — are being rolled out with offers of a host of benefits to diners, at the cost of restaurants, NRAI claimed in an advisory on Friday.

To be part of the program, restaurants must compulsorily offer a discount of 15-40% and pay a commission of 4-12% on every transaction made via the respective payment gateways to Zomato or Swiggy. In return, restaurants are promised higher footfalls.

These programs can impact the overall restaurant ecosystem in the long run, NRAI cautioned.

“Both of them build a payment gateway (Zomato Pay/Swiggy Diner), incentivize our customers to use this payment gateway (through discounts, 100% cash backs and bank offers) and urge partner restaurants to adopt this payment gateway under the unsubstantiated promise of more footfalls," NRAI said.

The product brings no “tangible" value to restaurants or solve any pressing problems of the industry, NRAI, the representative body of restaurants, said. In fact, it warned, the programs will help Swiggy and Zomato get a “firm foothold" in the dine-in business, it added.

Zomato and Swiggy have been reaching out to restaurants in Hyderabad piloting the programs.

A spokesperson for Zomato said its new dining product, now live in Hyderabad for a few weeks, is showing “great results".

“We are confident that we will create tremendous value and growth for the industry. We are looking forward to working with progressive restaurants in the industry," the spokesperson added.

Zomato Pay works as a payment feature embedded within the Zomato app. Customers can choose to settle the bill using the feature and unlock offers such as cash-backs and discounts.

Swiggy did not offer a comment on the issue. However, the aggregator acquired restaurant tech solutions platform Dineout from Times Internet in May. “Swiggy will double down on the synergies with Dineout’s offerings, including dining out table reservations and events. In time, restaurant partners will be able to reach more customers and grow their business," it said at the time.

NRAI’s strongly worded advisory once again threatens to escalate tensions between aggregators and top restaurant chains that have called for levelling the playing field with aggregators.

Last year, NRAI approached the Competition Commission of India with evidence to back allegations of anti-competitive practices such as data masking and charging of exorbitant commissions by food aggregators.

“There is absolutely nothing stopping Zomato and Swiggy increasing their discount requirements as well per- transaction commissions once that happens. They are currently funding the cash-backs to the customers, but that too can easily change," it said on Friday.

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Suneera Tandon
Suneera Tandon is a New Delhi based reporter covering consumer goods for Mint. Suneera reports on fast moving consumer goods makers, retailers as well as other consumer-facing businesses such as restaurants and malls. She is deeply interested in what consumers across urban and rural India buy, wear and eat. Suneera holds a masters degree in English Literature from the University of Delhi.
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Published: 03 Sep 2022, 12:20 AM IST
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