Even as commissions bite, eateries struggle to replace Swiggy, Zomato

Restaurants earn a third of their revenues from food delivery platforms Zomato and Swiggy, The Economic Times (ET) reported. This is despite the fact that three-fourths of them have their own food-delivery app, website, and tele-calling facilities to order food.

More than 85 per cent of these restaurants have higher price tags on their online menu than their dine-in menu.

It is likely that restaurants follow this pricing model to attract more customers to their restaurants while also avoiding the high commissions they have to pay to these aggregators, the report cited a recent study conducted by JM Financial that surveyed more than 135 eateries across the top 10 cities.

Elaborating on the tight hold of aggregators on customers, the report said that while the food service industry can survive without aggregators but practically it is unlikely to happen. Even big brands and hotel chains are unable to overcome the size of their user base, loyalty and diversified supplier base, ET reported.

An association of restaurants, the National Restaurants Association of India (NRAI) was quoted in the report as saying that restaurants can survive even without these aggregators. While these platforms have helped increase the demand, their high commission rates eat into restaurants' profits, NRAI added.

Swiggy said that it had helped 280,000 restaurants increase their sales via its online platform, the ET report said.

While there are options like Open Network for Digital Commerce (ONDC) that facilitate restaurants to sell their food directly to the customers through buyer apps, Industry experts say that the platform is still not mature and people are unaware of it. This is when the ONDC has substantially lower commission and free delivery options.