Zomato needs to make some more money, won't lower restaurant commissions: CEO

Deepinder Goyal.

There are no plans to lower commissions charged to restaurants by Zomato, the company’s CEO Deepinder Goyal said in an interview with CNBC TV18 on July 12.

“We are not profitable. We need to make some more money from somewhere. So, absolutely not taking rates down,” he said.

Although food delivery companies Zomato and Swiggy don’t disclose the exact structure of their take rates, industry experts say that the companies charge anywhere between 25-30 percent depending on factors like order volumes and value.

Goyal also maintained that Zomato has not been deep-discounting on its platform and has the data to prove it, provided restaurants agree to listen.

“Restaurants say that we actually discount too much. That's not true. So I mean, to a very large extent, I don't think that the other side is even willing to listen to us and look at the data that we have for them,” he added.

Last year, the National Restaurants Association of India (NRAI) moved to the Competition Commission of India (CCI) alleging that Zomato and Swiggy’s practices have had an "appreciable adverse effect on competition.”

Issues such as bundling of services, data masking, deep discounting, lack of transparency, and exorbitant commission were highlighted in the complaint.

“We work with most of them really well, most of them like working with us, but we cannot please everyone," Goyal said.

Zomato is constantly engaged in dialogue with restaurants and for the most part, things are improving, “but we cannot please everyone,” he said.

Moneycontrol reported earlier that NRAI held initial talks with officials of Online Network for Digital Commerce (ONDC) on June 21, according to sources close to the developments. Over the next couple of months, a mix of a few large and smaller restaurants may join the network for a pilot on the interoperable e-commerce network after a requisite technology standardisation.

Meanwhile, a note prepared by ONDC on a potential collaboration with food outlets that was accessed by Moneycontrol said: "With multiple NPs (network partners) offering their services on the open network with no pre-filters, it will help break away from current monopolisation/cartelisation of the online food delivery ecosystem."

In the interview with CNBC TV18, Goyal said that the company is looking at growth and profitability at the same time unlike before when profitability was compromised over growth, even as the firm along with other listed companies is seeing a huge decline in prices over the last few months.