Food delivery platforms, Zomato and Swiggy stare at risk from restaurant body which moved CCI on discount issue

The National Restaurant Association of India (NRAI) has moved the Indian Competition Commission (CCI) on 1 July
to emphasize the anti-competitive practices of Zomato and Swiggy. This includes service bundles, data masking and overcharged fees, price parity contracts, and significant discounts such as: Force restaurant partners to offer discounts to maintain a proper list.
Such a move took place when the Indian Stock Exchange (SEBI) approved Zomato’s initial public offering (IPO) application.
Next, will this move affect Zomato’s IPO?
The company has previously mentioned in its Herring Guide (DRHP) draft risks, including diminishing the value of the company’s network, if it does not retain existing restaurant partners or is unable to add new restaurants. did.
Zomato also mentioned the “log out” move for restaurants that disagree with the terms of the discount. In August 2019, we launched a campaign against Zomato’s Gold subscription program, with more than 300 restaurants launching a Twitter campaign to announce removal on Zomato Gold, EazyDiner, Dineout’s Gourmet Passport, Nearbuy, and MagicPin platforms. Among other people. At
DRHP, the company also quoted the 2019 policy of fines for rolled-back late-order restaurants, based on feedback. The
company has described the above as dangerous, but in connection with NRAI’s CCI, Karan Taurani, Vice President of Elara Capital, said these measures would not harm the company’s IPO listing.
“I don’t think it will hurt the IPO listing because it is impossible without the aggregator ecosystem. The value of the Indian order is almost low. And applications like Zomato and Swiggy provide scale,” he said. According to
Taurani, the Zomato commission rate is 1617% in restaurants. And there has been talk of raising this rate. Highlighting the anti-competitive practices of Zomato and Swiggy. CCI’s information has the potential to result in managing these high commission rates.

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