The Positive Shift: How Local Food Businesses Can Thrive Amidst Private Labeling Trends by Zomato and Swiggy

Zomato India

In the vibrant tapestry of India's culinary world, small food businesses stand at a crossroads, facing challenges yet brimming with potential, particularly in light of the rising influence of private labelling by significant food delivery platforms like Zomato and Swiggy. Ajay Somaiya, the forward-thinking founder of Quit Plastoc, shared valuable insights during a dynamic conversation with the founder of EcoPurnna, Mrs Isha, who shed light on this evolving situation.

Somaiya made an important observation: while the convenience of quick commerce in food delivery is undoubtedly exciting, the entry of food aggregators into the market with their private labels poses significant hurdles for smaller eateries. These larger platforms can often absorb initial financial setbacks, which puts small vendors at greater risk. "We genuinely care about the future of smaller players; many are fighting for survival," he expressed, underlining the urgent need for equity in the food delivery landscape.

The current atmosphere for local eateries is charged with a mix of concern and determination. Somaiya noted an influx of emails from passionate entrepreneurs in vibrant cities like Mumbai, Jaipur, Coimbatore, and Gurgaon. They are sharing their worries about the mounting pressures that standalone restaurants currently face. "Right now, smaller vendors are paying around 5% in commissions. But what happens if that climbs to 10% or even 15%? There's no safety net in sight," he pointed out, a reminder of the need for sustainable practices in our industry.

In response to competitive pressures from Zepto's rapid food delivery service, Zepto Cafe, Zomato's Blinkit, and Swiggy have launched Bistro and Snacc apps to deliver delightful meals in just 10 minutes. However, Somaiya cautioned that this race intensifies stress on the restaurant sector. "They feel the heat from Zepto, but why should local restaurants be caught amid these corporate strategies? Why can't we collaborate to achieve successful 15-minute deliveries together?" he asked, resonating with the hopes of many in the community.

Acknowledging food aggregators' essential role in the hospitality landscape, Somaiya highlighted a critical need for collaborative solutions that benefit everyone involved. "It's time for us to unite and tackle these challenges—understanding each other's pain points while crafting mutual benefits is key. The emergence of private labels was unexpected for us, and we are actively discussing constructive paths forward," he stated with optimism.

With the likelihood of potential legal actions, the industry body is already proactively exploring its options. "We are consulting with our legal advisors to consider our next steps, and we are committed to pursuing a course of action that aligns with our interests," he affirmed confidently.

In the face of these hurdles, Daryani shared encouraging strategies for small businesses to adapt and flourish. He advocated exploring opportunities within the ONDC platform, a government initiative to promote digital commerce while maintaining quality standards. "It's vital for them to rethink their packaging, streamline operations, and connect with services like Swiggy Bolt to remain vital," he emphasized, providing constructive guidance for sustainable growth.

Launched just last year, Swiggy Bolt is a groundbreaking initiative designed to deliver delicious meals from cherished local restaurants to consumers within a 2 km radius. It embodies the swift service today's diners desire, focusing on quick delivery and hot, fresh meals.

Daryani also urged small businesses to harness innovation and embrace food technology as pivotal elements of their growth strategy. "Adapting to technology and focusing on inventive solutions should become integral to their operational ethos. As an industry body, we are dedicated to raising awareness and will actively participate in more expos moving forward," he concluded, emphasizing the importance of unity as we navigate the ever-changing landscape, which includes evolving consumer preferences, technological advancements, and market dynamics, ahead.

Together, we can cultivate a thriving ecosystem that celebrates the rich diversity of local food businesses while adapting to an exciting future!