Indian food delivery unicorns face antitrust investigation

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Two Indian food delivery unicorns are under investigation for alleged unfair trade practices, the country’s antitrust watchdog has said.

Zomato and Swiggy dominate the fast growing market in India with a combined share of 95%.

The order to investigate the companies came months after the National Restaurant Association of India (NRAI) filed a complaint.

The companies did not comment on the survey.

However, the companies reportedly denied the allegation when the NRAI filed the complaint with the Competition Commission of India (CCI) in July last year.

The NRAI, which represents more than 500,000 restaurants across India, had asked the ICC to investigate the two companies for allegedly prioritizing certain restaurants.

The association also alleged that the two companies were giving discounts after charging “exorbitant commissions” to restaurants.

He added that the commissions were too high for the restaurants to afford.

The CCI said the companies’ agreements with restaurants could create “barriers to entry for new platforms, with no benefit for consumers”.

SoftBank-backed Swiggy raised $700 million in funding earlier this year, doubling its valuation to $10.7 billion. Zomato, which went public last year, attracted bids worth $46.3 billion and was more than 38 times oversubscribed.

The two companies are among the fastest growing start-ups in India, which is churning out unicorns, private companies valued at over $1 billion (74.5 billion rupees), at a rapid pace.

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