ONDC vs Zomato, Swiggy: Here's what India’s top restaurateurs prefer 

India’s top restaurateurs Riyaaz Amlani (founder of Social, Smoke House Deli, Boss Burger, etc.) and Zorawar Kalra (founder of Masala Library, Farzi Cafe, Louis Burger, etc.), have come out in support of the government-backed Open Network for Digital Commerce (ONDC), and also compared the platform with other food aggregators like Swiggy and Zomato. 

Speaking with Zerodha’s Chief Investment Officer Nikhil Kamath, the restaurateurs said that food aggregators like Zomato and Swiggy take up to 55 per cent of their order values through charges for delivery, discounts, discovery. On the other hand, ONDC does not take up a huge chunk of their order values and, hence, is the way forward for them to preserve their bottom lines.

Amlani said, “This is a triple D model. It's not just delivery cost, but also discovery cost which means that you are paying to be visible in a carousel, to be visible in one of those collections."

He added that food delivery commissions beyond 12 per cent aren't sustainable for restaurants, compared to the typical 24-28 per cent charged by the aggregators at present.

“You easily spend about 12 per cent more on that. On top of that, your average discounting is at 14-15 per cent. If you don't discount, customers don't come to you. That's the way it has been game. So, 55 per cent of your margin is taken by aggregators,”  he further explained.

Kalra agreed to this point and noted that food aggregator platforms also pressurise restaurants to put up discounts, which in the long turn might impact the end customer.

“Discounting has become an addiction and that's never a good thing. Whenever you build an entire system around discounts, eventually the consumer suffers. The funding of the discounts is happening at the cost of the discounts,” the founder of Farzi Cafe, Louis Burger, etc., noted.

On the other hand, both restaurateurs noted that they favoured ONDC because it does not charge high commissions.

“We are working very closely with ONDC. We are going to build channels and competencies. We have nothing against aggregators. We appreciate that they have helped build demand which is not competing with the restaurant business. While they have done that, they have taken away any hope of margins. We are all running just to stay in the same place,” Amalani explained.