Fri. Mar 29th, 2024
yourstory.com

India’s fastest emerging foodtech startups like Swiggy, Zomato, Foodpanda, and Uber Eats, are summoned by the Department for Promotion of Industry and Internal Trade (DPIIT). The call was made after the food aggregators were scrutinized for providing deep discounts and predatory pricing that is disrupting the foodtech market in India.

The development comes after the commerce and industry minister, Piyush Goyal, recently, warned the global e-commerce players for hurting local kiranas and small retailers through their predatory pricing practices.

“We are invited to the meeting chaired by DPIIT secretary, Ramesh Abhishek. This meeting will be attended by key stakeholders from food service industry tomorrow (Thursday) and is intended to address the issues and challenges faced by the industry,” said a spokesperson for Swiggy.

Goyal had stated that the government will not allow small retailers and kirana shops to be wiped out and that it is making all efforts to balance the interests of small businesses, retailers and e-commerce companies.

“The meeting has been called to resolve the issues of the restaurants. They have problems similar to those brick-and-mortar retailers had with ecommerce platforms,” said an anonymous official source.

The meeting also comes almost two months after representatives of offline restaurants met the department to highlight the impact of food aggregators deep discounting and predatory pricing on their trade.

“The department wants the two sides, the restaurants and online players to discuss mutual areas of interest and develop viable solutions for equitable growth in the industry”, said another official.

On the other hand, the restaurants have claimed that aggregators were offering massive discounts on their own products, thereby forcing restaurants to drop prices to remain competitive.

Importantly, around 500 restaurateurs had complained to the Competition Commission of India (CCI) early this year.

“There are no foreign direct investment issues in this matter and it seems the government wants to understand their working model and how aggregators manage to give significant amount of discounts. An intervention may not be likely at the moment,” said Arvind Singhal, chairman, Technopak.

India’s food ordering sector has seen partial rationalisation in the past six months.

“Apart from small restaurants, large chains have also raised these issues with authorities… discounts doled out by these app-based players have led to as much as 30% reduction in their business,’’ said a person in the know of the matter.

At the Thursday meeting, summoned by the minister, representatives from various restaurant associations, including Federation of Hotel & Restaurant Associations of India and National Restaurant Association of India, will also be present.

Leave a Reply

Your email address will not be published. Required fields are marked *