Wow! Momo CEO Criticises Impact of Zomato & Swiggy on Food Industry

Recently, Sagar Daryani, the co-founder of Wow! Momo appeared on entrepreneur Raj Shamani’s podcast. While having a heart-to-heart conversation on the reality of the food and restaurant business in India, Daryani mentioned that high commissions from Zomato & Swiggy are really killing the industry to a large extent.

Sagar Daryani is a co-founder of Wow! Momo, an Indian multinational chain of fast food restaurants headquartered in Kolkata. The chain started with momos, and now it specializes in momo-filled burgers (MoBurgs) and other momo-based desserts. 

Food businesses suffering in India

While sharing an insider look into the food business, Daryani mentioned the hurdles Indian food chain owners face, from obtaining licenses to commission rates being eaten away by delivery channels such as Swiggy and Zomato. Although he admitted that the delivery channel players are indeed helping the food businesses, their high commission rate is a reason for concern.

When Raj Shamani asked how much commission on revenue the delivery channel owners would charge, Daryani stated it could be anything from 15%-25%, depending on how small or big the business is. Though Open Network for Digital Network (ONDC) has been introduced in the Indian market, Daryani opined that more players are needed in the delivery business, or food businesses would continue to suffer in the hands of Zomato and Swiggy for taking away larger percentages of profits.

Indian food chains fighting back

Currently, the food chain owners in India are fighting for their rights and even talking with the finance ministry. Daryani admitted the owners of Swiggy and Zomato are supportive and lend an ear to the situation, but a quick solution is needed to rationalize everything. He urged everyone involved in the industry to come forward and make it a win-win situation for all concerned.

The main focus now for food businesses should be on generating more revenue, given the fact certain stringent economic policies do not allow them to make maximum profits. On the other hand, the delivery channels and payment gateways are working against any profit-making. The delivery channels in India charge such high commissions that a portion of the cost is transferred by food companies to customers who are understandably not happy with the arrangement.

The need for lower delivery commissions

The cost burden, in any case, should not be passed on to customers, as Daryani pointed out. In the food industry, lowering delivery commissions is the need of the hour.