Why #OrderDirect doesn’t bother Zomato, Swiggy

Why #OrderDirect doesn’t bother Zomato, Swiggy

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Aditi Shrivastava

104 reads
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Aditi Shrivastava

104 reads

Restaurants urging people to order directly from them than through Swiggy or Zomato may have a long, hard journey ahead if they want to make a viable business model of it

June 01, 2021

9 Min Read

The #orderdirect page on Instagram is a virtual gastronomical delight, offering a proverbial manna from heaven for foodies locked at home (pardon the liberal sprinkling of cliches).

One post features an implausible tower of meat slices spiked between buns, with Jimis Burger imploring patrons to order directly from its website. Social has an offer of a 25% discount and no delivery fee on its signature biryani if ordered on its website. The Table, in Mumbai’s posh Colaba area, promises it will pass on to customers the “commissions saved” if they order directly from it.

That’s a reference to commissions food delivery platforms such as Swiggy and Zomato charge restaurants on orders placed through them. These commissions, or take rates, have gradually increased, in part to cover the platforms’ own losses, and are now among the highest in the world. This has become a bigger issue now as the extended pandemic lockdowns have effectively positioned the aggregators as the primary source of business for restaurants.

The #orderdirect campaign, supported by the National Restaurant Association of India (NRAI), encourages customers to skip platforms such as Zomato and Swiggy and place food delivery orders directly with the restaurants.

But, as several restaurants are discovering, building a direct ordering channel is hard. It requires having either an in-house delivery team or a tie-up with a logistics firm. It also requires marketing and supply chain expertise and comes with additional operational and financial costs, which many small eateries cannot afford. 

Besides, an impactful switch away from food delivery platforms seems a distant goal with direct orders and takeaways, according to several restaurant managements The CapTable spoke with, still not accounting for more than 20% of the deliveries.

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