Gauri Devidayal owns a gourmet bakery brand, Mag St. Bread Co., in an upmarket neighbourhood in south Mumbai, selling bread and pastries online through a variety of delivery platforms. In May 2020, as India was gripped by a wave of Covid-19, forcing many people to stay home, Devidayal’s customers suddenly found they couldn’t pre-order on Scootsy. 

The app had been acquired by Swiggy, one of two giant aggregators that make up the bulk of India’s food delivery marketplace, in 2018. In 2020, the company had simply decided to discontinue the pre-order functionality, leaving her without one of her main sales channels.

“From an operations standpoint, [pre-ordering] is a big benefit for restaurants to know in advance what orders are coming,” Devidayal told Rest of World

The sudden, overnight disruption to her biggest delivery brand through a unilateral decision by the aggregator forced Devidayal to hunt for alternatives. A month later, she signed up with Thrive, a platform that lets restaurants take delivery orders directly from customers via her social media channels. A year on, only half of her orders come through the aggregators. The rest come direct, and she’s adopted the platform across the rest of her portfolio of restaurants and delivery-only brands.

Now, Devidayal, who sits on the managing committee of the National Restaurant Association of India (NRAI), which represents more than 500,000 eateries, is running a nationwide #OrderDirect campaign, encouraging others to free themselves from their “unhealthy dependency” on food delivery aggregators and to move onto alternative platforms which charge lower commissions and impose less strict controls.

Swiggy and Zomato, whose initial public offering launched on July 14, have an effective duopoly on India’s food delivery market, which is expected to be worth $8 billion by 2022. But a wave of resistance is growing from restaurants who are frustrated by the steep commissions and powerlessness over the aggregator’s policies, helped by direct order platforms that offer to process deliveries for a fraction of the commission. Direct order platform DotPe has signed up 20,000 restaurants, while Thrive has more than 1,700, and claims to have saved restaurants $246,000 in commission fees. Restaurants hope that, even if direct ordering can’t break the power of the aggregators, it can at least force them to mend their ways.

“Zomato and Swiggy are not the devil, they are not enemies. They are very, very necessary service providers in today’s day and age. But their methodology is questionable,” said Manu Chandra, the executive chef of Olive Beach restaurant in Bengaluru, who recently created a successful nostalgia-themed menu exclusively for direct ordering channels. “The more an order direct movement gains steam, the more they will be compelled to remedy the way they conduct business. And I think that is the end goal.”


The NRAI estimates India’s food delivery sector to be worth $4.2 billion, two-thirds of which is accounted for by app-based aggregators. It’s a business with room to grow — the delivery business is worth just 6% of the overall restaurant industry, which the NRAI said is valued at $54 billion. Swiggy and Zomato have each raised more than $2 billion in their tilt at the market; Zomato is targeting a valuation of $8.6 billion in its IPO this week. 

The two aggregators’ success has come from their ability to build four main business areas: online storefronts that make discovery easy for users; payment gateways; their own large delivery fleets; and an understanding of user data that gives them insights into how customers order.

Having created these powerful stacks of technology and logistics, the aggregators insist that restaurants on the platform commit to using all of them. DoorDash in the United States, for instance, allows restaurants to list on its marketplace for discovery, but still do their own fulfillment. That’s not an option for thousands of restaurants listed on Zomato or Swiggy in India. 

“India is a rare country where if you want to work with an aggregator, you have to give everything up,” said Naman Pugalia, Bengaluru-based founder of direct order platform Peppo. “So the cataloguing, the user experience, fulfillment, everything is controlled by aggregators. This is not the case with a lot of other countries.”

Even huge chain restaurants, such as McDonald’s and Burger King, can’t deliver using their own fleets when they take orders on aggregators. There is only one exception to the rule — Domino’s Pizza. Jubilant FoodWorks, owner of the Indian franchise of the U.S. pizza chain, operates its own delivery fleet and pays a much lower commission to orders coming via aggregators. (The Domino’s Pizza mobile app has over 57 million downloads and contributes over half of the chain’s sales). 

Company Name:Zomato Ltd
Headquarters:Gurgaon, India
Founding year:2008
CEO:Deepinder Goyal
Delivery riders:169,802
Active restaurant listings:389,932
Key Investors:Info Edge, Uber, Alipay Singapore, Ant Financial Singapore, Tiger Global, Sequoia Capital
Total investment raised:$2.1 billion

With all parts of their delivery, from discovery to distribution, on the aggregators’ systems, restaurants feel hostage to the tech companies’ policies, and to their commissions. Peppo charges 15 rupees or 15% of the order value, whichever is lower, compared to the 25% that is standard on Swiggy or Zomato. Instead of an annual or monthly subscription fee, charges are levied per delivery. “Peppo only makes money if the restaurant does,” Pugalia said. DotPe charges 1%-3% of an order’s value, while Thrive charges 3% per order.

Restaurant owners complain about the platforms’ ability to set metrics, like their delivery radius, cancellation fees, length of time for preparing a dish, and the criteria for a refund. They have also started to realize that they are giving up a core part of their business — their customer data. They rely on the aggregators to bring them orders, but the platforms don’t share the data they collect, citing privacy concerns. 

“Not knowing who is eating your food and being able to remarket to them is a big problem,” Devidayal said.

On July 1, the NRAI filed an antitrust complaint against aggregator apps for anti-competitive policies. Zomato has said that the concerns are “misplaced.” 

For newcomers like Thrive, unbundling the various businesses that Zomato and Swiggy have built into their platforms will be complex, but not impossible. “With the advent of the way platforms work, modularization is not as complicated as it was maybe 5-10 years back,” Dhruv Dewan, Thrive’s co-founder, told Rest of World. “Instead of trying to create a product that covers the entire ecosystem, we partner with payment gateways, logistics, marketing, [order analytics]... The idea is to be more of an open platform, and to work with these restaurants to provide them these services.”

For example, the direct order players, including Thrive, DotPe and Peppo, all have partnered with third-party logistics (TPL) companies, such as Dunzo, Bounce, Shadowfax, and Delhivery, to fulfill orders. While aggregators charge a delivery fee to both the restaurants and customers, these anti-aggregator platforms charge only the restaurants, who then decide if they want to pay the cost or pass it on to the customer or split it with them. Some restaurant owners have also hired their own delivery drivers, using TPLs as a backup. By using idle staff as drivers, they can save cash. 

Handling payments has also become easier with the emergence of third-party point-of-sale platforms, and the growth in platforms like Walmart-owned PhonePe and Alibaba-backed Paytm. Both have super-app ambitions, and have captive audiences of tens of millions of customers. 


Global tech companies are also trying to expand their reach into the Indian internet economy. Facebook is expanding the rollout of its WhatsApp Business product, which lets small businesses interact with their customers. WhatsApp has nearly 500 million users in India. Google has been opening up its Google Pay product to more merchants. Earlier this year, the company invested in DotPe, which lets restaurants scan inventory, create digital menus and QR codes for ordering, to book third-party logistics and to reach customers directly, including via WhatsApp.

Giving restaurants control over their interactions with customers could help them address the most significant cause of their dependency on the aggregators: discoverability. Zomato and Swiggy have a critical mass of users. In 2020, Zomato had more than 130,000 restaurants on its platform. With the platforms doing their advertising for them, restaurants haven’t had to build their own marketing muscle. But by integrating with social media channels, direct order platforms let the restaurants have richer, more frequent conversations with their customers, helping them get repeat orders, offer special deals to regular customers, and target their marketing better.

“[Restaurants] can actually start leveraging Facebook as active channels for marketing to the customers,” said Anurag Gupta, co-founder of DotPe. “To be on top of the list of any aggregator platforms, [restaurants] have to do marketing within that platform.”

Devidayal said the most satisfying part of direct ordering is getting access to the data, and being able to see whether a buyer is a new or repeat customer.  She said that watching repeat customers trickle in reassures her that patrons are not put off by the new ordering process. “We're able to remarket to the audience that is obviously coming back to us, because we have the data. It's giving us the confidence to bring in more repeat business, and that's a hugely gratifying part of having this whole order direct platform.” 

Eric Lafforgue/Art in All of Us/Corbis/Getty Images

Analysts said that the scale of the aggregators’ businesses does make it highly unlikely that their direct order challengers will replace them, or even significantly undermine their businesses in the short term. “While I think that some customers will order direct, I do not think that direct ordering channels will create a major threat to delivery aggregators,” Sheryl Kimes, emeritus professor of operation management at Cornell University School of Hotel Administration told Rest of World.

She compared the pushback against aggregators to that of hotels against online travel agents (OTAs). Platforms like Expedia and charged commissions similar to that of delivery platforms, but hotels have struggled to free themselves. 

“Hoteliers, like restaurant operators, do not like paying this commission and have tried various tactics over the years to get customers to book directly with them,” Kimes said. “Their efforts have made some inroads, but have come nowhere close to supplanting the dominance of the OTAs.”

Sherri said that customers like the convenience associated with food delivery aggregators and OTAs. “It’s not only easy, but allows them the opportunity to see the various choices available to them. In addition, they don’t have to worry about the perceived complications associated with contacting the restaurant or hotel directly.” While direct ordering might seem like an appealing alternative, “I don’t think it’s going to make that big of a dent in the size of the aggregator’s market share.” 

At the pre-IPO virtual press conference in June, Zomato’s co-founder Gaurav Gupta struck a relaxed tone. “Order direct has always been there… What restaurants are trying to do now, they are actually trying to digitize that channel, which is a great thing,” he said. “Even restaurants are saying that this is an additional channel … it is not a replacement for the platform. As a platform, we drive tremendous business for them: 10, 20, 30 times more than what order direct can do.”

Swiggy declined to comment.

“I don’t think it’s going to make that big of a dent in the size of the aggregator’s market share.”

Perhaps a greater threat to Zomato and Swiggy comes from Amazon, which began a limited roll out of food delivery in Bengaluru in March, charging half the commission of the incumbents. 

But the rebellion against aggregators could still have an impact. Campaigns from angry restaurants have in the past forced the aggregators to make changes to their policies. In 2018, Zomato introduced its Zomato Gold program, where for a $14 yearly fee, users got access to deals, including complimentary drinks and buy-one, get-one-free dining at 6,000 restaurants. Many restaurants signed up thinking it would improve discovery and increase footfall. But the steep commissions and discounts drove up costs for restaurants. In response, they started the #LogOut movement, where hundreds of eateries refused to continue with the program. The resistance ultimately forced Zomato to make changes to its loyalty program. 

There are signs this could be happening again. After a wave of restaurants started advocating for direct order, Devidayal said, Swiggy began talks with restaurants to introduce a sliding scale calculation of commission — the higher the order value, the lower the commission. “I mean, it's not closing the gap,” Devidayal said. “But the point is they are listening.”