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Restaurants looking at ONDC to cut reliance on Swiggy/Zomato

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Experts say that thousands of small to big restaurants are already selling through ONDC and the number is growing rapidly

New Delhi: India’s restaurant industry is seeking to cut its stranglehold reliance for online orders on two food-aggregator powerhouses Swiggy and Zomato. The eateries are exploring and working with various alternative options including the State-run e-commerce platform, Open Network for Digital Commerce (ONDC) and other smaller food aggregators.

“Restaurants are exploring all the platforms as part of their omnichannel strategies,” said Riyaaz Amlani, managing director of Impresario Restaurants, which runs popular restaurants like Social, Smoke House Deli, Mocha, French bistro Slink & Bardot among other chains.

He said thousands of small to big restaurants are already selling through ONDC and the number is growing rapidly.

ONDC is quite friendly in terms of the commissions they charge from restaurants,” Amlani added.

This is also good news for the restaurants that, otherwise, have been blaming Swiggy/Zomato for charging steep commissions and offering heavy discounting through the platform that eateries alleged hurt their businesses.

Restaurant owners said their total payout to Swiggy and Zomato is in the range of 40-55% for a combination of services including discovery, discounts and delivery charges or what the hospitality industry calls 3Ds.

T Koshy, managing director of ONDC said the platform currently is home to around 75,000 restaurants in 290 cities nationwide. On the other hand, Swiggy and Zomato each service more than 250,000 restaurants on their platforms.

“Swiggy and Zomato are a duopoly in the market. They have created huge demands, and customer bases and it would be impossible to change the customers’ habits,” said Anurag Katriar, director of deGustibus Hospitality which operates a host of restaurant brands including Indigo, Indigo Deli, Neel, and Tote among others. 

“Our idea is not to look for alternatives to Swiggy and Zomato but to find additional routes to sell online,” Katriar added.

Many restaurant owners IndiaRetailing spoke to said it is almost impossible to confront or ignore both Swiggy and Zomato due to their sheer sizes and the business restaurants generate through these platforms.

This is a sharp departure from the stand restaurants had taken a few years ago. In 2019, restaurant operators in India under the aegis of the National Restaurant Association of India (NRAI) launched a “Logout” campaign asking hospitality companies to delist from Swiggy and Zomato to protest steep discounts offered by food-aggregating platforms.

Another top executive of a national restaurant chain who was one of the spearheads of the 2019 boycott calls admitted that their campaign against Swiggy and Zomato has almost fizzled out over the years.

Aside from ONDC, the restaurants are also working with the offline-to-online commerce platform DotPe and the food ordering platform Thrive.

Last year, the Gurugram-based DotPe raised $58 million in its Series B round led by Temasek and the funding round was also participated by its existing investors PayU, Prosus, InfoEdge Ventures and two new investors Mitsubishi and Naya Capital.

Some restaurant chains said their overall share of online orders through Swiggy and Zomato is slowly coming down. These chains have already started selling on ONDC, DotPe, Thrive and their online sites.

deGustibus Hospitality said it currently generates 23% of its online orders from non-Swiggy/Zomato platforms and the company is hoping to gradually increase that share from alternate platforms.

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