Zomato is in talks with several restaurants as they are looking to increase their commission by about 2-6%. The company has been reaching out to restaurant chains for over a week now, but has met with rejection.
Kabir Suri, president of the National Restaurant Association of India (NRAI), said, “We will be discussing this matter with Zomato on behalf of our restaurant partners”.
The company has decided to approach these restaurant chains as it is facing severe losses and there is pressure on them to make up for it. Zomato, is attempting to match the Swiggy business model, as they charge a higher commission from the restaurants. Zomato’s CEO, Deepinder Goyal, stated, “The slowdown was due to a few temporary factors”. He went on to say that Zomato lost Rs 347 crores in the quarter ending in December 2022. It was Rs 63.2 crores higher than the same quarter of the previous year.
According to reports, restaurants that would not agree to Zomato’s demands could possibly be delisted from the platform or they will be ‘shadow banned’, which will reduce their visibility to customers. Karan Tanna, the founder of Ghost Kitchens, said, “It is good to see Zomato’s focus on unit-level profitability, but this might disturb the unit economics of restaurants drastically”.
The founder of Indigo Hospitality, Anurag Katriar, who runs Indigo Deli and Neel restaurants, stated, “Various restaurant chains have been approached in multiple cities, including Mumbai, Delhi, and Kolkata, by Zomato to increase commissions. It is being done selectively, so far, and industry associations will be discussing this with the aggregator”.
Currently, the food aggregator charges its partners a commission of 18–25 percent per order for home deliveries.
