Indian restaurants to pursue legal action against food delivery platforms

INDIA – The National Restaurant Association of India (NRAI) has unveiled plans to pursue legal action against food delivery giants like Zomato and Swiggy, citing their platforms are gaining unfair advantage following the launch of their new quick food delivery apps Bistro and Snacc.

These services, currently available in select areas, promise delivery of snacks, beverages, and meals within 10 to 15 minutes.

This development is perceived as a strategic response to Zepto’s standalone cafe app and has sparked significant debate within the restaurant industry, according to the Times of India (TOI).

The primary concern among restaurant owners is the claim that Zomato and Swiggy are utilizing customer data to develop and market private label food products via these quick delivery apps.

Restaurant operators argue that by selling private-labeled food items, these companies are shifting from being neutral marketplaces to becoming direct competitors, which contradicts their original business model.

Anurag Katriar, trustee of NRAI, reportedly stated that this situation constitutes an abuse of market dominance, accusing Swiggy and Zomato of exploiting restaurant data to enter their domain.

Katriar emphasized that legal action would be pursued against these practices.

Over the years, Swiggy and Zomato have built multibillion-dollar enterprises by collaborating with restaurants.

The COVID-19 pandemic accelerated online shopping behaviors in India, prompting these companies to expand into quick grocery deliveries.

This expansion contributed to the rapid growth of the quick commerce sector. Zomato, through Blinkit, and Tata’s BigBasket now deliver groceries, electronics, apparel, and even iPhones within ten minutes.

Swiggy also introduced Bolt, a 10-minute food delivery service within its main app, while Zomato launched Bistro in December 2024, offering 15-minute deliveries.

Restaurants have generally accepted these rapid delivery services when they operate under the aggregator model, where deliveries are made in partnership with restaurants.

However, NRAI President and Wow! Momo Foods co-founder and CEO Sagar Daryani expressed concerns that aggregators might redirect customers toward their private label products.

Daryani stated that while restaurants support quick delivery models facilitated through partnerships, they oppose any moves that threaten to undermine the restaurant industry by introducing similar competing products.

As of now, Swiggy and Zomato have not commented on the business strategies behind the Snacc and Bistro apps or responded to the accusations raised by the restaurant community, as reported by TOI.

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