In an effort to resolve their issues, the govt. calls food delivery apps and offline businessmen for a meeting

Key Highlights

Issues such as massive discounts offered by online food delivery apps and starting private labels by them that are reportedly cutting into the business of offline players in the country were discussed in the meeting

Both the online food delivery aggregators and officials from the National Restaurant Association of India gave their justifications and recommendation to the department officials.

However, even after immense discussions, no concrete solutions came up and the government told both the parties to work hand in hand so as to come up with a mutually beneficial solution.

On the 4^th of July, the Department for Promotion of Industry and Internal trade summoned officials from online food delivery aggregators like Zomato, Swiggy etc and offline businessmen for a meeting in a bid to discuss and resolve the issues between them.

Issues such as massive discounts offered by online food delivery apps and starting private labels by them that are reportedly cutting into the business of offline players in the country were discussed.

Recently, e-commerce players were slammed by Piyush Goyal, the industry and commerce minister for allegedly hurting local players such as Kirana stores and mom and pop stores by their pricing practices that he said were predatory. He also claimed that the government will not allow small retailers to be wiped out by e-commerce players. He called for efforts to be made so as to balance the interests of both the parties.

Related : India’s food ordering and delivery giants face losses due to the furnishing of discount to build up customers

Both the online food delivery aggregators that included major players like Foodpanda, Ubereats, Swiggy, Zomato etc and officials from the National Restaurant Association of India gave their justifications and recommendation to the department officials.

However, even after immense discussions, no concrete solutions came up and the government told both the parties to work hand in hand so as to come up with a mutually beneficial solution.

Swiggy officials confirmed in an email that they indeed had been invited to a meeting that was attended by key players in the food delivery sector which was commenced to discuss issues faced by the industry. This meeting was chaired by Ramesh Abhishek who is the secretary of DPIIT.

This meeting was conducted almost two months after various offline players meet with the officials of the department to bring forth the ways e-commerce players were hurting the functioning of their businesses.

The Ministry of road and transport, standards authority of India and the Food safety were also present at the meeting. These officials acknowledged the immense growth that e-commerce businesses have brought forth with the use of technology in the food sector.

Related : Zomato Revises Payment Structure In NCR: Faces Protest By Delivery Personnel

The major complaint that offline players have against the food delivery apps is that they have been offering massive discounts to the customers. This has left the offline restaurants struggling to keep up with the competitive pricing. They have no choice but to reduce the prices so as to compete. The government seems to be wanting a better understanding of the business models of these e-commerce giants and how they manage to give such massive discounts to the consumers. However, the food aggregators refuse to back down on the issue of discounts. They said that they will be providing recommendations to boost the food sector to the government in which they claim to have created tremendous employment.

Another issue that had been brought forth by the offline players in this issue is about the private labels that are launched by e-commerce companies. The restaurants have alleged that online food aggregators make use of the massive amounts of food preferences data available to them so as to tweak their menu to make it more preferable to consumers.

Despite all the complaints, Swiggy assured that they are working with the government and other food aggregators to boost the food sector.

Stay connected with us for latest updates!