A saga in the F&B aggregator-platforms operator relationship is set to witness a big change. Zomato India’s largest food aggregator by volumes is finalizing a deal with restaurant partners on the issue of data-sharing. Swiggy Zomato’s closest rival is also believed to be working on a similar model.

News agency PTI reported that Zomato is in advanced talks with the National Restaurants Association of India (NRAI) to share specific customer-data with restaurants mainly contact information and ordering history with the consent of the customer.

This is a significant reversal from the status quo when such data sharing wasn’t allowed on privacy platform ownership and market competition-related grounds.

NRAI a restaurant association that represents over 5 lakh restaurants and cloud kitchens across the country had been lobbying for consumer data sharing so that restaurants could reach out to customers directly send personalized offers and build a direct relationship with them. Many in the industry have heralded Zomato’s move as a game changer.

 

Access to consumer contact and behavioural data for restaurants can lead to better targeted promotions improved customer retention and lower dependency on platform-controlled visibility. A top industry executive told “We want to know who is ordering how often and what they prefer.” Anonymized behavioural-data also can be valuable for restaurants planning to develop proprietary technology (think analytics push notifications data-driven targeting).

For Zomato (and potentially Swiggy) such a move can be a way to help restore partner relationships while also possibly rebranding from the past public perception of gatekeeper to an enabler. This change also comes at a time when both players have been facing increased commission rates in part due to expansion costs while also getting a tightening grip of regulators.

What will change - and what remains unchanged?

While customer contact (such as phone number) will be shared with the restaurant (only if the customer opts-in during the ordering process) the key platform services that these platforms have been building over the years will continue to operate in a similar manner for now. Delivery logistics restaurant menu listings user acquisition and the underlying terms of engagement between aggregator and restaurants will not change to any significant degree at least in the short-term. Data can only be used within the broad framework that will be laid out by the platform.

However there’s also a chance this is only the beginning. Reports suggest a similar data-sharing model has already been signed between Ownly (the food-delivery vertical of the cab-aggregator Rapido) and NRAI. Swiggy has also been reportedly working on some plans with NRAI though nothing may come out of it. If successful this could be a big turning point for the two companies and NRAI.

The risks and challenges moving forward

Beyond data-privacy and ownership several challenges remain ahead for platforms as this policy takes shape. Data-privacy laws in India are developing and companies will have to manage the opt-in flow very clearly and transparently and have hard checks against misuse. Restaurant owners in turn must also build the capacity to use data beyond merely having access.

Platforms have also come under increasing scrutiny due to high commissions. Operators have complained that this has risen from the typical 5-7 percent in initial years to around 35 percent in some cases. While data-sharing could be a goodwill gesture it is not likely to cut down on this if restaurants see data as a lipstick on a pig model.

 

In short it seems the initial agreement between Zomato and NRAI will probably be sealed this week. It should be noted that the restaurant body had also reached an agreement with Uber Eats another big player in the sector. For the time being this looks like the first step towards building a better-operating model that works for both restaurateurs and platforms but both sides still have more to do on this front. For investors and the wider market it is another data point suggesting the food-tech ecosystem in India has moved to the next stage.