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As the voice of the Indian restaurant industry, we represent the interests of 500000+ restaurants & an industry valued @ USD 4 billion. Whether a chain or independent restaurant, the NRAI is here to help every step of the way. Join us!


Tech Solutions for the Restaurant Industry



The relationship between aggregators and restaurants has been a volatile one in the recent past. While the narrative sold by the aggregators is pro-restaurants, our friends in the red and orange corner are gently yet firmly pulling the rug from underneath us. Unfortunately, the business of food is no longer about good food and hospitality, instead restaurants have to compete on the basis of deals and discounts. The business has been ravaged by high commissions that vary from restaurant to restaurant, nor do we have access to our customers who are made anonymous by an order ID. The aggregators may declare their best intentions, however, over time, the very platforms that were supposed to empower restaurants are strangling them. 

Levelling this grossly unbalanced playing field has been a top priority for the NRAI, a need that has been amplified during the COVID crisis. While engaging with Zomato and Swiggy to reach common ground on the rampant issues such as high commissions, data masking, predatory pricing, mandatory use of their delivery services and compliance with anti-competitive terms to sell on their platforms, representations were made to the Department for Promotion of Industry and Internal Trade seeking clarity on Press Note 2. Taking note of the growing noise, the Competition Commission of India commissioned a study on the “Changing Competition Landscape in India”, which confirmed what many of us knew to be true: aggregator platforms were on a collision course with the restaurants that supported it. This was cemented by the spontaneous #LogOut movement in August 2019, which saw thousands of restaurants across India boycotting the discount programs that were eating away at the insides of the restaurant industry. 

The aggregator model has a rich history of conflict in the taxi (Uber, Ola), travel (MakeMyTrip), hotel (OYO, Airbnb) industries too. The growth at all costs rampage that these companies employ globally have left many small businesses in the dust. The root cause of this, unfortunately, is a flawed business model – business goals of the aggregator platforms are inherently detrimental to the restaurants interests and run counter to a viable, sustainable enterprise. The fact that Zomato and Swiggy are hemorrhaging cash every month despite exorbitant service fees is a standing testament to this, making a strong case for a change in approach. An aggregator model always converges to a point where a couple of players hold all the cards. 

This premise has been the foundation of the various technology initiatives that have silently been in the works at NRAI for months now. The idea of an industry owned platform isn’t a unique one, yet we believe that another aggregator platform (no matter how ethical) will end up facing the same problems that we are today: a conflict of interest and consolidation of power in the hands of a few. Any technological alternative, therefore, must empower restaurants to sell more through any channel and not compete with the restaurant. It should be the railroad that we operate our businesses on, allowing restaurants to exercise full discretion of the direction they want to take.

Wider choice always leads to better experiences, and as restaurateurs, we have first-hand knowledge of this. The NRAI aspires to build a universe where brands have the freedom to choose technology products that fit their restaurants format. Our vision is to spur innovation in three pillars to bolster the customer experience: a loyalty program, digital ordering interfaces, and solutions for the delivery of food. 

And while the cool and clinical buzzword ‘contactless dining’ seems to be the flavour of the season, so far Zomato and Swiggy have tunnelled deep into the home delivery ecosystem and have cut themselves a deal that gives them a fat percentage of every online sale. They haven’t been able to directly tap into the dine-in revenues of restaurants despite their best efforts. By ensuring that customers use their respective wallets (ZPay, Dineout Pay etc) to complete transactions and charging a percentage commission as high as six per cent on the total dine-in transaction value to restaurants, the current contactless dining products offered by aggregators are a gateway to exactly that: your restaurants dine-in revenues and customer spending patterns. If history is any indicator (commissions in the home delivery segment have quadrupled in the last four years), the offer of zero commissions in the first three to six months is nothing but a hook to increase adoption by the industry and it is crucial that we recognise this.

In practical terms contactless dining is a misnomer, rather, it should be called ‘digital ordering’ where a customer views the menu, places the order and completes the payment via a device. Given how the COVID virus spreads, digital ordering is going take a stronger position in the customer’s journey and it is vital that we are ready for it. In that spirit, NRAI has partnered with DOTpe to provide a robust alternative to the current digital ordering products in the market. The costs have been rationalised to a low flat fee rather than a percentage based commission so that your costs do not inflate as your revenues grow. With DOTpe, the NRAI is committing to the idea of an omnichannel, open ecosystem; one that helps restaurants know their customers better and grow rather than compete with it. The possibilities are many: the same tech-stack can be adapted to serve the takeaway and home delivery segments of your business, giving you the freedom to use your own delivery fleet or signing up any third party logistics player of your choice. NRAI also has an alliance based loyalty program in the works, which will be unveiled to the community in due course of time. 

It gives me comfort that the restaurant industry has a history of resilience during times of strife and confidence we will chart our path against staggering odds together. 

Stay safe. 

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