Originally established as marketplace platforms, Zomato and Swiggy are now leveraging their position and access to restaurant data to venture into private label food delivery, either directly or through their subsidiary. This strategy not only cannibalizes the business of restaurants that depend on these platforms but raises serious concerns under the Copyright Act and related laws.
Speaking to CNBC-TV18, Sagar Daryani, Chairman of NRAI said, “We have been rendered spineless by Swiggy and Zomato in a way”. He added that this creates an uneven playing field. By monetizing data derived from restaurant partners, they exploit conflicts of interest that can decimate the ecosystem they claim to support.
Also read | Zomato takes on Swiggy’s bolt with 15-minute food delivery service
“We’re all for fast food. I think it just adds that feel to food delivery. I think restaurants that can adapt to fast food will definitely benefit because everybody wants convenience. Which we’re definitely not okay with both Swiggy and Zomato coming into their own private brands and launching their own Quick Commerce apps like a Snacc or like a Bistro Cafe which is by Blinkit which is owned by Zomato,” he explained.
“So, what they do in these apps is they sell similar products that restaurants sell, whether it’s a samosa or a momo or a chai. These guys have all their data and they don’t share their data with us. So they know exactly who our customers are and for us there is consumer masking which I think is completely unfair but what they can easily do is they can migrate our traffic to their app and sell similar products which I think is completely unfair and then get into . private labeling is getting into the food business is to facilitate the food business by making sure they get into the food business I think it is a complete abuse of power, he pointed out.
“I definitely think we will take legal action if needed and we are definitely considering. But in a very serious way, we were always assured by Swiggy and Zomato that they would never enter the grocery business. But as partners, we feel that we has been backstabbed in a way because that’s absolutely what they’re doing here because they’re competing with Zepto Cafe, which does fast-food business,” Daryani said.
“Now, just because they want to compete with Zepto Cafe, and they launch a Snacc or they launch the Bistro app, we’re the ones who get squeezed in. And I think this is going to negatively impact the food industry, it’s going to negatively impact the smaller players who sell snacks like samosas, like momos, like tea, like coffee, like biryani. So I think it’s totally unfair, and we totally condemn it.” said the NRAI president.
NRAI sees this as alleged misuse of private marks, which infringes intellectual property rights under the Copyright Act. “We are determined to pursue all available remedies to protect 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,” said Daryani.
Daryani elaborated, “Fast Food is here to stay, grow and bring more flair to the food delivery space. People want more convenience and so that will give an edge to the restaurants that can adapt to that. We’re all for it.” What we are absolutely not okay with is Zomato and Swiggy private labeling and selling food themselves through Blinkit’s separate Bistro app and Swiggy launching Snacc for quick food delivery.
“They have all our data that they don’t share with us. For us there is complete consumer masking. We have no reason not to believe that they are migrating our customer to the products they sell as private labels on their apps. Whether it’s data from a tea brand, biryani or momo We are definitely considering taking a serious legal route,” Daryani explained.
Also read | Swiggy launches new app ‘Snacc’ for 15-minute food delivery
“As long as these aggregators are okay to work with restaurants and enable restaurants to go fast, we’re totally okay with that, but we’re not going to 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 market,” he said.
Additionally, NRAI called on stakeholders, including restaurants, customers and regulators, to come together to ensure a fair and competitive food delivery ecosystem. Together we can safeguard the future of India’s vibrant culinary landscape.
