Food delivery unicorn Swiggy has begun a direct ordering pilot feature that allows restaurant owners to market and source delivery leads by themselves thereby forgoing minimal commission.
The feature which is named as ‘Swiggy Direct’ is currently operational in Mumbai with a few restaurants, according to an Economic Times report. Swiggy’s move to launch a Swiggy Direct comes shortly after several restaurants began launching their own direct ordering channel and amidst a backlash from the industry.
Restaurant lobby and advocacy group National Restaurant Association of India (NRAI) had also recently filed complaints with the Competition Commission of India (CCI) seeking the regulator’s investigation into alleged anti-competitive practices by Swiggy and Zomato.
The second wave of covid-19 in which ravaged the country’s economy and healthcare systems largely impacted small and medium-sized businesses. Small and medium-sized restaurants had to depend heavily on food delivery aggregators such as Zomato and Swiggy to make even minimal revenue.
Although dine-in revenues for restaurants are yet to pre-pandemic levels, the restaurant industry has banded together to open their own direct ordering channel without depending on aggregators. Inc42 had earlier written in-depth about how technology startups such as Thrive, DotPe, and POSist have been working closely with the restaurants to build the feature.
Using order direct restaurants can promote their direct ordering links on social media platforms. When a customer clicks on a specific link, he/she is redirected to a web page that lists the entire menu of the restaurant. This webpage is created and maintained by startups such as Thrive which provide SaaS solutions to restaurants.
Once the order is finalised and paid for, the restaurant sends a person to home-deliver the food. Some restaurants are currently repurposing their existing dine-in staff as delivery staff, while some are using Thrive’s direct partnerships with last-mile delivery startups to deliver direct orders to customers.
Thrive charges a commission of just 3% per order and also offers marketing tools for an additional fee on top of this commission. On the other hand, Swiggy Direct charges a base commission of 2.5% with an additional 2% payment gateway charge. Swiggy will also charge customers a fee of INR 30 as delivery charges.
In addition, if a customer uses the direct ordering link of a restaurant from Swiggy Direct, the startup will forgo commissions for a period of 30 days.
A person aware of Swiggy Direct’s operations told Inc42 that the startup takes care of the logistics, and does not have an option for restaurants to deliver the orders themselves. The person asked not to be identified as they are not allowed to speak with the media.
Additionally, when a customer clicks on the Swiggy Direct ordering link of a restaurant, the customer is routed to the main Swiggy app which will have a separate ordering page, the sources quoted above added. However, with SaaS solutions such as Thrive, the restaurant gets its own direct ordering page and can manage items on the menu and handle its own deliveries, and even get visibility of customer data.
One of the biggest reasons behind the order direct movement was due to the lack of data sharing restrictions imposed by Swiggy and Zomato on restaurant partners. With SaaS products like Thrive, POSist, and DotPe, restaurants now have complete control and visibility of customer data.
According to media reports, Swiggy Direct now allows data sharing with restaurant patterns, which is probably an industry-first move in the food aggregator segment.