NRAI Takes On Zomato and Swiggy

Swiggy and Zomato have been the biggest players in India’s food delivery market for years, with Zomato holding 58% of the market share and Swiggy at 34% as of 2024. They’ve become so popular that it’s hard to imagine a time when they weren’t the top choices for ordering food online. However, their dominance has brought a lot of problems for both customers and restaurant owners.

Smaller restaurants are struggling with the high commission fees these platforms charge, while customers often pay extra due to hidden charges. This is mostly because they charge restaurants high commissions, between 18% to 25% per order, excluding additional fees like GST and payment gateway charges. These high costs have become a big burden for restaurants, making food delivery on Zomato/Swiggy unprofitable for many.

Swiggy and Zomato have been the biggest players in India’s food delivery market for years, with Zomato holding 58% of the market share and Swiggy at 34% as of 2024. They’ve become so popular that it’s hard to imagine a time when they weren’t the top choices for ordering food online. However, their dominance has brought a lot of problems for both customers and restaurant owners.

Smaller restaurants are struggling with the high commission fees these platforms charge, while customers often pay extra due to hidden charges. This is mostly because they charge restaurants high commissions, between 18% to 25% per order, excluding additional fees like GST and payment gateway charges. These high costs have become a big burden for restaurants, making food delivery on Zomato/Swiggy unprofitable for many.

NRAI Takes Action

In response, the National Restaurant Association of India (NRAI), which represents over 500,000 eateries, plans to file a major complaint with the Competition Commission of India (CCI) against these platforms. The complaint will focus on their "private labelling" practices and their entry into quick commerce through brands like Blinkit Bistro and Swiggy Snacc.

NRAI raised concerns about the "anti-competitive" behavior of these platforms, including deep discounting, data masking, and unfair trade practices. He stated that many restaurants are struggling to survive due to these issues, with some even shutting down and employees losing jobs. The association is encouraging restaurants to try alternatives like ONDC. ONDC charges much lower and nominal commissions—around 10% to 11%—and allows restaurants to access customer data directly.

NRAI Takes Action

In response, the National Restaurant Association of India (NRAI), which represents over 500,000 eateries, plans to file a major complaint with the Competition Commission of India (CCI) against these platforms. The complaint will focus on their "private labelling" practices and their entry into quick commerce through brands like Blinkit Bistro and Swiggy Snacc.

NRAI raised concerns about the "anti-competitive" behavior of these platforms, including deep discounting, data masking, and unfair trade practices. He stated that many restaurants are struggling to survive due to these issues, with some even shutting down and employees losing jobs. The association is encouraging restaurants to try alternatives like ONDC. ONDC charges much lower and nominal commissions—around 10% to 11%—and allows restaurants to access customer data directly.

Private Labelling by Zomato and Swiggy

The association is now adding the issue of private labelling to its petition. It argues that these practices violate platform neutrality and hurt smaller businesses by creating unfair competition.

Zomato and Swiggy’s private labelling creates unfair competition for restaurants on their platforms. They use customer data to launch their own food brands and often promote these more than others, reducing visibility for independent restaurants. This makes it harder for small and newer restaurants to compete and forces them to lower prices. With fewer alternatives available, they feel forced to remain on these platforms despite unprofitable conditions.

Private Labelling by Zomato and Swiggy

The association is now adding the issue of private labelling to its petition. It argues that these practices violate platform neutrality and hurt smaller businesses by creating unfair competition.

Zomato and Swiggy’s private labelling creates unfair competition for restaurants on their platforms. They use customer data to launch their own food brands and often promote these more than others, reducing visibility for independent restaurants. This makes it harder for small and newer restaurants to compete and forces them to lower prices. With fewer alternatives available, they feel forced to remain on these platforms despite unprofitable conditions.

How is ONDC different?

Think of food delivery apps like Zomato as closed food courts. Only big, rich restaurants can get good spots and customers only see what the mall wants them to see. ONDC is like an open street market. Any restaurant can set up, show its food, and sell directly to customers. Small restaurants have the same chance to succeed as big ones. NRAI believes this model can be expanded across India to provide a fairer marketplace for restaurants.

The NRAI is also negotiating with Swiggy and Zomato to address these concerns. It has requested a reduction in commission rates and the separation of payment systems from other services. However, progress has been slow, as both platforms continue to prioritize profitability by increasing fees and expanding their own brands.

What The Solution Is

Despite these challenges, NRAI is optimistic about alternatives like ONDC. The network's lower costs make it an attractive option for restaurants looking to improve their profit margins. By promoting ONDC and raising awareness among smaller businesses, NRAI hopes to create a more balanced food delivery ecosystem in India.

How is ONDC different?

Think of food delivery apps like Zomato as closed food courts. Only big, rich restaurants can get good spots and customers only see what the mall wants them to see. ONDC is like an open street market. Any restaurant can set up, show its food, and sell directly to customers. Small restaurants have the same chance to succeed as big ones. NRAI believes this model can be expanded across India to provide a fairer marketplace for restaurants.

The NRAI is also negotiating with Swiggy and Zomato to address these concerns. It has requested a reduction in commission rates and the separation of payment systems from other services. However, progress has been slow, as both platforms continue to prioritize profitability by increasing fees and expanding their own brands.

What The Solution Is

Despite these challenges, NRAI is optimistic about alternatives like ONDC. The network's lower costs make it an attractive option for restaurants looking to improve their profit margins. By promoting ONDC and raising awareness among smaller businesses, NRAI hopes to create a more balanced food delivery ecosystem in India.

(Credit: Daffodil Software)

If ONDC replaced Zomato and Swiggy, customers would have more food options at lower prices because of better competition. Small restaurants would earn more since ONDC charges lower fees, helping them grow and offer unique dishes. Restaurants would also have more control over their prices and services. Ordering food would be simple, with easy access to menus and the same order’s tracking on different apps. This change would support local businesses, boost communities, and give people fresh, affordable meals.

If you’re a seller interested in joining ONDC, SellerSetu is ready to help!

Fill out the form to schedule a demo and see how we can streamline your onboarding process while improving your experience. Our platform is built to help you sell online and foster your business growth.

Start your journey with ONDC now!

(Credit: Daffodil Software)

If ONDC replaced Zomato and Swiggy, customers would have more food options at lower prices because of better competition. Small restaurants would earn more since ONDC charges lower fees, helping them grow and offer unique dishes. Restaurants would also have more control over their prices and services. Ordering food would be simple, with easy access to menus and the same order’s tracking on different apps. This change would support local businesses, boost communities, and give people fresh, affordable meals.

If you’re a seller interested in joining ONDC, SellerSetu is ready to help!

Fill out the form to schedule a demo and see how we can streamline your onboarding process while improving your experience. Our platform is built to help you sell online and foster your business growth.

Start your journey with ONDC now!

NRAI Takes On Zomato and Swiggy

NRAI Takes On Zomato and Swiggy