Swiggy and Zomato shares fall, NRAI raises serious questions

On Friday, shares of online food delivery platforms Swiggy and Zomato witnessed a huge fall amid market fluctuations.

• Swiggy shares fell below Rs 490.
• Zomato shares fell below Rs 240 level.

The decline came after the National Restaurant Association of India (NRAI) filed a complaint against the two companies with the Competition Commission of India (CCI).

What is the controversy?

NRAI has accused Zomato and Swiggy of creating an unequal level of competition in private labeling and quick commerce food delivery.

• NRAI claims:
  Both the companies are delivering food through their private label platforms like BlinkitBistro and Swiggy Snacks.
• This move violates market fairness and hurts small restaurant businesses.

NRAI’s response

NRAI President Sagar Daryani took strong objection to this, saying:
“Zomato and Swiggy are venturing into private label food delivery using their network data. “This not only hurts the business of restaurants that rely on these platforms, but it also creates copyright and other legal concerns.”

he adds:
“We disagree that these platforms are selling food themselves by private labeling.”

Snack and Bistro: Quick Delivery Platforms

• Swiggy’s Snack:
  Designed for breakfast, drinks, and food delivery in under 15 minutes.
• Zomato’s Bistro:
  Blinkit claims to deliver snacks, meals and drinks in 10 minutes.

Summary of NRAI’s allegations

NRAI says that:

1. Misuse of data:
   Swiggy and Zomato are selling private labeling products by leveraging restaurant data on their platforms.
2. Impact on Restaurant Business:
   This strategy is weakening the restaurant’s business.
3. Legal Concerns:
   This move violates copyright and other related laws.

impact on stock market

After the complaint was filed with CCI, investor reaction was negative, leading to a decline in the shares of both the companies:

• Swiggy: Down 3.6%.
• Zomato: Below Rs 240.