Zomato is reportedly in the final stage of discussions with the restaurants' representative body, the National Restaurants Association of India (NRAI), to allow restaurants to access customers' data.
Entrepreneur India has learned that this will be rolled out to customers as an optional feature. This essentially means that a customer can choose to share their data with the restaurant partner.
Confirming the upcoming feature, Zomato CEO Aditya Mangla said in a post that "the company is in the early stages of launching a feature on the app which gives customers the option to opt-in to receive marketing and promotional updates directly from restaurants."
"If and when consent is provided - only phone number will be shared with the restaurant. No other information will be shared," Mangla said.
NRAI, which represents more than 50,000 restaurants across India, is also said to have had similar conversations with Swiggy, though sources indicate that nothing has been formalized yet.
If implemented, it will mark the resolution of what is described as a decade-long conflict between restaurants and food aggregators. The two sides have, however, locked horns on a variety of other issues in the last few years.
Entrepreneur India has reached out to the NRAI and Swiggy for more information. We will update the story as soon as we hear from them
Level-playing Field
Restaurant owners have long opposed the data monopoly held by food aggregators. It is argued that the likes of Zomato and Swiggy leverage this masked customer data to enhance their brand equity and conduct more targeted and efficient marketing and promotional activities. Moreover, the data is said to have helped the aggregators launch their own private labels, creating a conflict with the restaurants they have partnered with.
To counter the duopoly, the restaurant community has explored alternatives such as the Open Network for Digital Commerce (ONDC), specifically because ONDC is designed to share customer data with the merchant (restaurant in this case), which is widely considered as a level playing field.
Earlier this year, Rapido's food venture Ownly partnered with NRAI to come up with a slightly more transparent framework wherein there are no additional packaging charges, and pricing across online and offline channels remains the same. In essence, the customer pays for the listed price along with tax for the food item. There is also a tier-based delivery charge system based on the distance of the restaurant.
"Zomato's decision to share customer data marks a defining shift in India's food delivery ecosystem. For restaurants, this restores something fundamental — the ability to understand and build direct relationships with their own customers," Sameer Sharma, founder of uEngage told Entrepreneur India.
"While consumer behaviour won't change overnight, this transparency will meaningfully accelerate the industry's move toward direct ordering channels over the next few quarters. Restaurants now have the tools to strengthen loyalty, improve repeat purchases and reduce over-dependence on intermediaries," Sharma added.
The move is likely to unlock a clear tailwind for resto-tech companies like uEngage as well as inspire restaurant operators to double down on their digital presence. It could very well help eradicate the problem of price parity or any other dark patterns.
According to Kulmani Rana, Founder and CEO at Fibonacci X, Large cloud kitchen-based players (like Rebel Food) which are already tech-heavy business models will likely benefit the most. Earlier, they only got to know the radius, but now they will know more about the user.
"We don't believe it will lead to significant migration to direct channels in the short term. Customers go to aggregators for variety of choices and convenience, and younger and emerging consumers value this. Also, numbers will likely be shared once the consent is given by the user; it is not likely to be a default feature. Players have already started working towards revenue diversification, so I do not see any significant impact on revenue," he said on possible impact on revenues of food aggregators.
Dark practices, privacy, and more
The increasing popularity of internet-based companies, such as those in food delivery and quick commerce among others, has brought the issue of dark patterns into the spotlight.
Dark pattern or practice is essentially aimed at subverting a consumer's autonomy and informed decisions, causing the customer to pay more than the price they see. It is also tricking users into giving away more personal data than needed or simply making them sign up or pay for something.
This has already come under the scanner of the government.
The Ministry of Consumer Affairs on Thursday announced that 26 e-commerce platforms have submitted self declarations that their user platforms don't have dark patterns.
Companies including Flipkart, Amazon, Zepto, Myntra, MakeMyTrip, BigBasket, Swiggy, Zomato, and Meesho have completed internal or third party audits and have declared the same, according to the ministry.
It remains to be seen how restaurant partners are capable of handling user data, even if it is just phone numbers. The extent of this will only become much more clear once the aggregators roll out the feature at scale.
"While gaining a customer's contact number is a major win for direct marketing, restaurants must also understand their new role as data custodians. The DPDP Act mandates that this data remains intact and secure from breaches," Anjan Pathak, co-founder of Vantage Fit, told Entrepreneur India.
"A single data leak is might transform into a severe legal and financial crisis. Data Fiduciaries can be liable for heavy penalties if they fail to implement the security measures necessary to prevent the loss or misuse of that customer phone number. The reward of direct engagement must be weighed against the risk of regulatory action for a breach," Pathak added.