In an effort to calm growing concerns among industry stakeholders, Zomato CEO Deepinder Goyal has emphasized that the company’s newly launched instant food delivery app, Bistro, is not a private label and does not aim to compete with restaurant partners. Goyal’s assurances come as the restaurant industry raises questions about the app’s potential impact on the existing food ecosystem. In an email addressed to Zomato’s restaurant partners, Goyal clarified Bistro’s role in the food delivery space. He assured them that Bistro operates as a standalone app with menus curated using publicly available information. “The Bistro team has no access to data that would create an unfair playing field. In fact, all Zomato data and insights are available to all restaurant partners and the public through Zomato Trends,” he wrote. This statement underscores Zomato’s ongoing commitment to its restaurant partners, a sentiment that Goyal has reiterated multiple times. “In the past, I have expressed that Zomato as a restaurant aggregator will never compete with its own restaurant partners, unlike players such as Amazon who sell their own private labels on Amazon,” he said in the email. Goyal further highlighted that Zomato has stood by this principle by refraining from opening physical restaurants or using its platform as a distribution channel for kitchens it operates.
Industry Concerns About Bistro
The launch of Bistro in December 2024 triggered a wave of apprehensions among restaurant associations, including the National Restaurants Association of India (NRAI) and the Federation of Hotel & Restaurant Associations of India (FHRAI). These organizations have been vocal about challenges faced by the industry, such as deep discounting, high commission rates, consumer data masking, and trust issues with food aggregators. Bistro’s entry into the market added another layer of complexity to these existing concerns. Responding to these apprehensions, Goyal assured stakeholders that Bistro’s scale and market share are minimal. “Even at 1,000 outlets, Bistro would barely account for 0.5% of the market. Scaling Bistro isn’t the goal of this experiment; rather, it is to find a workable business model that the restaurant industry can replicate,” he explained. Goyal also noted that India’s out-of-home food consumption still has significant room for growth, and innovative service models like Bistro could play a role in acquiring new customers and expanding the ecosystem. One of the key measures Goyal highlighted to address transparency concerns is the Zomato Trends platform. This tool provides all restaurant partners with access to data and insights that can help them make informed decisions. By sharing such information openly, Zomato aims to level the playing field and build trust with its partners.
Bistro’s Distinctive Role
Bistro operates as a separate entity within the Zomato ecosystem, designed to experiment with new service models. Unlike traditional food delivery apps, Bistro curates its menu based on publicly available data rather than exclusive agreements with restaurants. This approach aims to test innovative business strategies that could potentially benefit the broader restaurant industry. Goyal’s email emphasized that Bistro does not pose an existential threat to restaurants, reiterating that the app’s objective is to complement, rather than compete with, existing players in the market. “India’s food industry is vast and diverse, and there is enough room for multiple service models to coexist and thrive,” he said.
Addressing the Challenges Faced by Restaurants
Restaurant associations have long voiced concerns about practices in the food delivery space that they believe are detrimental to their sustainability. These include: Deep Discounting: Heavy discounts offered by aggregators often put pressure on restaurant margins. High Commission Rates: Food delivery platforms charge significant commissions, impacting profitability for small and medium-sized businesses. Data Masking: Aggregators’ control over consumer data limits restaurants’ ability to understand their customer base and personalize services. Breach of Trust: Instances of perceived unfair practices have led to strained relationships between restaurants and food delivery platforms. By addressing these challenges proactively, Zomato aims to maintain its position as a trusted partner in the food delivery ecosystem.
A Growing Market for Innovation
India’s out-of-home food consumption is on the rise, presenting opportunities for both traditional restaurants and innovative service models. Bistro’s experimental approach seeks to tap into this potential by introducing concepts that can drive customer engagement and expand market reach. Goyal highlighted the importance of collaboration in achieving these goals. “The restaurant industry and food aggregators must work together to create sustainable solutions that benefit all stakeholders,” he said. He also noted that Bistro’s success would depend on its ability to complement, rather than disrupt, the existing ecosystem. Zomato’s CEO Deepinder Goyal has made it clear that Bistro is not a threat to its restaurant partners but rather a complementary service aimed at exploring innovative business models. By prioritizing transparency, collaboration, and mutual growth, Zomato seeks to strengthen its relationship with the restaurant industry while contributing to the broader food ecosystem. As India’s food market continues to evolve, initiatives like Bistro could play a pivotal role in shaping its future, provided they align with the interests of all stakeholders.
