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The Hunger Games: Zomato, Swiggy’s deep discounts under scanner

PW Bureau 

While companies like Zomato and Swiggy have distorted the market with heavy discounts, every platform needs a level-playing field, said NRAI president New Delhi: The national restaurant association of India (NRAI) said it needs a code of conduct to be put into effect for online food aggregators, with the association planning to hold an internal meeting on Thursday to decide the next step to be taken. While companies like Zomato and Swiggy have distorted the market with heavy discounts, every platform needs a level-playing field, NRAI president Rahul Singh said.

Are Zomato, Swiggy discounts distorting market?

“We are happy with the marketplace model. They are bringing restaurants closer to the consumer but they cannot get into exclusives, arm-twisting, promoting their own brands, using their own (search) algorithms. We all have happy hours, end of season sale but not that everything is perpetually on a sale. You are influencing the market forces. You cannot have the entire month saying no cook December,” Singh said. Singh added that sales of every product at hefty discounts and the dumping of capital should be avoided. Two weeks ago, the NRAI sent the department for promotion of industry and internal trade (DPIIT) a letter asking for clarity on whether online food aggregators ought to fall under the purview of the government’s new guidelines on foreign direct investment in e-commerce that came into effect on February 1. “E-commerce entities providing marketplace will not directly or indirectly influence the sale price of goods or services and shall maintain level playing field,” the note issued by DPIIT said. Further, the rules added that if over 25 percent of purchases of a vendor is from the marketplace entity, the inventory of a vendor will be deemed to be controlled by e-commerce marketplace entity.