NEW DELHI: IPO-bound Zomato, an online food delivery platform, has said that the National Restaurant Association of India’s (NRAI) concerns about food aggregators' anti-competitive policies are "misplaced".
It added that it was yet to receive any intimation from the Competition Commission of India (CCI) which was approached by NRAI to look into a series of practices followed by aggregators that it said are hurting the restaurant industry.
“So, we haven't received any intimation from CCI on that. Once we get it, we'll take actions that we need to. We believe the points that they've raised are misplaced. As and when there is an intimation to us, we will take steps to respond to whichever government authority we have to," Akshant Goyal, chief financial officer, Zomato, said at a virtual press conference announcing the Gurgaon-based company’s upcoming Rs9,375 crore initial public offering (IPO).
Zomato is committed to working and resolving differences that emerge with the restaurant body and the restaurant industry at large, the company’s top executives said.
On Monday, NRAI said it had approached the CCI with evidence to back allegations of "anti-competitive" practices such as data masking and charging of exorbitant commissions by food aggregators Zomato and Swiggy.
NRAI submitted detailed information to CCI on 1 July. The industry body in its petition to CCI raised concerns over deep discounting. Lack of transparency and neutrality on aggregator platforms were also red-flagged. NRAI also highlighted exclusive deals that offer some listed restaurants better terms of engagement on the platforms.
The move signalled an escalation of already existing conflict between aggregators and restaurants.
Restaurants have been at loggerheads with aggregators, alleging that their practice of doling out discounts and charging steep commissions from eateries have distorted the economics of the restaurant industry. In 2019, NRAI, which represents the interest of over 500,000 restaurants, launched a campaign against food aggregators with several restaurants logging out of the platforms citing similar concerns.
Over the last few months, NRAI has also launched an #orderdirect campaign, prompting eateries to look at alternatives beyond the two large aggregators, to lower costs and gain more control over the data of consumers they serve.
Meanwhile, top executives at Zomato said they do not view restaurants banding together to build their own direct ordering channels as a “threat" or a “replacement" to aggregators.
“Order direct has always been there…what restaurants are trying to do now they're actually trying to digitize that channel, which is a great thing. Even restaurants are saying that this is an additional channel they're trying to build in addition to what platforms are already there today, it is not a replacement for the platform. As a platform we drive tremendous business for them, 10-20-30 times more than what order direct can do," said the company’s co-founder Gaurav Gupta.
Over the last few years Zomato has enabled restaurants with technology and tools to service customers better. “When the restaurant industry grows, Zomato grows, I think that's clear to us, we don't see it as a threat," Gupta added.
Gupta said Zomato will grow on the back of growth of the restaurant industry, and that restaurant partners are core to its business.
“We work with 1000s of restaurant partners to actually grow the industry, that's why we've been able to do it over the last few years, and we continue to listen to them and work with them. In this journey, as we go along…there will be some times where there will be differences, but I think it is for us to make sure that we listen to them, we work with them, and resolve the issues that are there," he said.
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