A big crisis is coming for Zomato and Swiggy, are they ready to deal with it?

If a list of the world’s most price sensitive countries is made, then India will undoubtedly be on top of it. Indian customers always give more preference to the price of the product. In such a situation, if you are selling them a product or service at a higher price, then they are not going to spare you. Zomato and Swiggy are currently doing this.

Are Zomato and Swiggy charging more for food?

Many social media users have complained that there is a huge difference of up to 60 percent in the price of food ordered online and food bought at a restaurant. On this complaint, the response of platforms like Zomato and Swiggy is that the price of food is decided not by them but by the restaurant.

But, there is a catch here. There is a commission transaction between the restaurant and the food delivery platform. This is the reason why most restaurants, if not all, have a different rate list for online delivery and a different one for the customers coming to the restaurant.

What is wrong with the business model of Zomato and Swiggy?

Any company does business to earn profit. Everyone can understand this. If Zomato and Swiggy are doing this, then there is nothing wrong in it. Zomato has made profits this year and Swiggy is still a loss making company. Then where is the issue?

Actually, online food delivery companies like Zomato and Swiggy charge many types of fees from customers. For example, food delivery charge, platform fee. At the same time, restaurants also charge a good amount in the form of GST charge apart from food.

In such a situation, if any hidden charge is taken from you, then as a customer you will not like it at all. And this is what online food delivery companies are doing.

Is Zomato and Swiggy’s business going to be hurt?

As we said in the beginning, India is a price sensitive market. Right now most of the customers feel that companies like Zomato and Swiggy only charge them delivery charge and platform fee.

But, now the way users are complaining on social media, it seems that the truth of this ‘hidden charge’ is going to be revealed. In this situation, a part of the customers of these food delivery companies may avoid ordering food online.

Will it be reflected on the shares of Zomato and Swiggy?

It has been a long time since Zomato got listed in the stock market. At the same time, Swiggy is also going to be listed in the market by bringing an IPO. If the matter of ‘hidden charge’ catches fire, then its effect will obviously be seen on the shares of both the companies.

An example of this is the debate on social media between Ola Electric owner Bhavish Aggarwal and stand-up comedian Kunal Kamra. Kamra raised questions on the poor service center of Ola Electric. Many Ola customers supported him. Ola Electric’s image got tarnished and its shares fell below the listing price of the IPO. Zomato and Swiggy would definitely want to avoid such a situation.