Sagar Daryani, President of the National Restaurant Association of India (NRAI), expressed concerns that small food businesses in India could face closure due to the rise of private labelling by food delivery giants Zomato and Swiggy. He emphasized that smaller, localized eateries are particularly at risk, with rising commissions and competition from new initiatives like Zomato’s Blinkit and Swiggy’s Bistro and Snacc apps, designed for 10-minute food delivery.

Daryani highlighted the unfair advantage large aggregators gain by utilizing data from their restaurant partners to create private labels and compete directly in the food delivery space. This, he argued, disrupts the restaurant ecosystem, especially as these platforms have access to critical customer data that can be used to generate demand for their own offerings.

The NRAI, which represents over 500,000 restaurants, has approached the Competition Commission of India (CCI) to investigate these practices, which they claim violate the neutrality promised by Zomato and Swiggy. Daryani stressed the need for a balanced solution where all stakeholders benefit and warned of a potential “carnival-like” scenario where only businesses offering the deepest discounts can survive.

To stay competitive, Daryani advised smaller businesses to innovate, particularly by joining the ONDC platform and exploring food technology. He also suggested that restaurants focus on speed and packaging innovation to stay relevant in the evolving food delivery landscape. The NRAI is planning to seek legal recourse if necessary.