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The great Indian food delivery tussle



With direct delivery options entering the fray, the food delivery space is India’s latest battleground. As new options like Thrive and DotPe go head to head with giants, customers are now more spoilt for choice

“Where a consumer has a presence, a restaurant can follow. Facebook, Instagram, Google listings, WhatsApp… any of them can be worked into an ordering platform, and we are teaching restaurants how to do just that,” says tech entrepreneur Anurag Gupta. His non-aggregator platform DotPe, co-founded with Shailaz Nag and Gyanesh Sharma, has tied up with over 15,000 restaurants in 300 cities, in two years.

This business is miniscule compared to giants like Swiggy and Zomato — Zomato boasted of 1.4 million active restaurants back in 2019, the year DotPe had just started out. But even as the giants continue to innovate, creating employment and providing essential delivery during lockdown, alternative food delivery platforms have been seeing a steady rise over the past two years.

The commission conundrum

Interestingly enough, they arrived on the scene to fill an urgent need, not of consumers, but of restaurants. Restaurateurs (as well as organisations like National Restaurants Authority of India, NRAI) have for years been seeking alternatives to mainstream aggregator apps. Statements galore have been made about how the deep discounts offered by delivery apps, combined with heavy commissions they charge, cut deep into profits of restaurants, bars and cafes, to the point of making business nearly unsustainable.

While NRAI announced plans to launch its own delivery platform back in 2020, it was in May 2021 that Kerala Hotel and Restaurant Association (KHRA) launched a food delivery app, Rezoy, as a response against the commission charged by larger food aggregators.

“It is around 20% plus GST, which comes up to 21.5% or 22% of the bill amount. When you factor in the overheads, which include raw material cost and salaries, a restaurant owner is not left with much to run the business. Sometimes the bill amount [on a particular order] may not justify the commission. We needed to do something about it in order to continue in the business,” says Asees Moosa, Ernakulam district president of KHRA.

Platforms like DotPe and Thrive, in contrast, charge anywhere between 1% to 3% commission per order, and have capped it at that. Thrive has been another popular option for individual restaurants in metro cities. Launched in October 2020 with one restaurant partner in Mumbai, Thrive built its base to 1,500 restaurants by February 2021.

“That is when we launched our 2.0 version, which has helped double our count in the last two months alone. We now have over 3,000 restaurants on board,” says co-founder Dhruv Dewan.

Dhruv does not see Thrive as an alternative to Swiggy or Zomato. “I think in the near future, direct-to-customer platforms and aggregators will coexist,” he says, “But for anyone building a business from scratch, a direct-to-customer option makes more sense than an aggregator.”

A key reason why certain restaurants choose Thrive over Zomato or Swiggy, is access to consumer data. As Gauri Devidayal of The Table, Mumbai puts it, “It is very difficult to run a business online if you don’t know who your consumer is, which dish they prefer and why, what problems they had with a particular order.”

Thrive gives its restaurant partner ownership over such data. “The data is hosted on our servers, because it isn’t feasible to have a separate server for each restaurant. But the data rests contractually with each restaurant, and they have full access to it. According to the terms and conditions, we [Thrive] can’t give a restaurant’s consumption data to anyone else. We can only use it to improve our operations, like keeping track of payment hiccups,” says Dhruv.

Asees explains how hotels are encouraged by aggregators to have different prices — for online and offline orders. “Prices [on the online menu] and portion sizes are ‘adjusted’ in a way that justifies the commission they pay to the aggregators, some make extra too. So who gets the raw deal in the end? Our aim [with Rezoy] is that all stakeholders benefit, not just us,” he adds. The menu uploaded by the restaurant on Rezoy has to be the one displayed at the hotel. If there is malpractice then action is taken against the hotel — they are removed if they refuse to comply. “This is a reason why a few hotels are not keen on being on the app as they are used to the extra profit,” says Asees.

Last-mile delivery is another factor where today’s giants appear to have an advantage; a restaurant needs a dependable delivery fleet, one that knows its city’s lanes and bylanes, shortcuts and detours.

DotPe and Thrive address this with a hybrid model. As Anurag points out, “The last-mile delivery problem has already been solved by others — by Shadowfax, Rapido and Dunzo. We have tied up with them; restaurants have the option of using their own staff for delivery, these third-party teams, or a mix of the two.” Thrive’s model is similar.

Riyaaz Amlani’s Impressario Handmade restaurants — the firm behind Social — recently snagged a headline-grabbing tie-up: Mumbai’s dabbawalas now deliver his restaurants orders to homes across the metropolis.

Learning curve

Innovating is one thing, getting smaller and newer restaurants to understand the nitty-gritties of online operations in the midst of a pandemic is another.

NRAI has been conducting bootcamps to familiarise restaurants with DotPe’s system in multiple cities.

In Mumbai, the gastropub London Taxi co-founded by Dhaval Udeshi and NRAI member Pawan Shahri, has doubled up as an incubator programme.

Dhaval says, “This is the first time that a restaurant is opening up its kitchen to become an incubator for home delivery. There is no doubt about the adverse effect of the pandemic on India’s F&B segment, especially small business owners. Newer companies who want to start their own brand in the food business need SEO (search engine optimisation) to acquire direct customers. To make a business survive on its own it takes a good couple of months.”

Dhaval says that partnering with known brands is one definite way forward, keeping in mind the importance of SEO in reaching end-customers online. “We have redone our entire marketing strategy towards online delivery, and have partnered with DotPe for the same,” he says.

It appears to be a case of multiple Davids banding against a few Goliaths, in a tussle that promises to be fascinating, and ultimately rewarding for customers.

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