Navigating Zomato & Swiggy’s New Commission Model

The recent announcement from Zomato and Swiggy about revising their commission structures has sent ripples of anxiety through the Indian restaurant community. As your restaurant coach, we’ve been flooded with questions from panicked owners in Mumbai, Delhi, Bangalore, and beyond. Is this the end of profitability on aggregator platforms?

Let me be clear: this is not a death knell, but a loud and clear wake-up call. The game has changed, and to survive and thrive, your strategy must evolve. This isn’t just about fees; it’s about how you fundamentally approach your online business. In this guide, we’ll break down what this news means for you and provide a concrete action plan to protect your margins and build a more resilient business.

What Exactly Changed? A Summary of the New Aggregator Policies

In their latest moves, both Zomato and Swiggy have introduced tiered commission models and new “priority” listing services. Gone are the days of a one-size-fits-all commission rate.

• Tiered Commissions: Platforms are now charging different commission rates based on factors like your restaurant’s location, order volume, and the specific plan you choose. This means a cloud kitchen in Gurugram might pay a different rate than a fine-dining establishment in South Mumbai.

• Paid Priority Listing: A new feature, often called “Zomato Gold” or “Swiggy One,” gives restaurants higher visibility in search results and app listings—for an additional fee. This creates a two-tier system where restaurants that pay more get seen more.

• Data Access Changes: Some reports suggest changes in the depth of customer data shared with restaurants, making it harder to build your own marketing lists directly from aggregator sales.

From our coaching perspective at RestaurantCoach.in, this is a classic market maturation strategy. The aggregators are shifting from pure growth to profitability, and unfortunately, a portion of that profit is now coming more directly from your pocket.

How Do Zomato and Swiggy’s New Fees Impact Indian Restaurant Owners?

The immediate impact is straightforward: squeezed profit margins. For many restaurants, especially QSRs and cloud kitchens that rely heavily on delivery, aggregator commissions were already their single largest operational cost outside of raw materials. This increase pushes many from barely profitable into the red on each online order.

But the impact goes deeper:

1. The Visibility Tax: The paid priority listing creates an “arms race” for visibility. If your competitors opt-in and you don’t, your orders could plummet overnight. This forces you to choose between paying higher fees or becoming invisible to customers. We’ve seen this dilemma firsthand with our coaching clients at RestaurantCoach.in.

2. Strategic Strain for Cloud Kitchens: Cloud kitchens, whose entire model is often built on aggregator platforms, are the most vulnerable. Their business model is now under direct threat, forcing a urgent re-evaluation of their customer acquisition strategy.

3. Increased Operational Complexity: Managing different commission tiers and promotional schemes adds a layer of accounting and strategic complexity. You can no longer just set a menu price and forget it. You need a sophisticated pricing strategy for each platform.

Is This the End for Small Restaurant Owners?

Not necessarily. While the challenge is significant, it forces a necessary and long-overdue strategic shift. The restaurants that will survive are those that stop seeing Zomato and Swiggy as their primary sales channel and start seeing them as one part of a diversified marketing and sales ecosystem.

Your 5-Step Action Plan to Protect Your Restaurant’s Profit

Panic is not a strategy. Action is. Here is a clear, actionable plan you can start implementing this week.

Step 1: Conduct a Deep-Dive Profitability Audit

You cannot manage what you cannot measure. It’s time to move beyond basic P&L statements.

• Calculate Platform-Specific Profit Margins: Don’t look at overall profit. Calculate the exact profit margin for orders coming from Zomato, Swiggy, and any other platform individually. Factor in the commission, GST, packaging, and delivery rider costs.

• Identify Your Breakeven Point: Knowing your exact margin will tell you which platforms are still viable and at what order value.

Action: This week, pull last month’s settlement reports and create a simple spreadsheet to calculate net profit per platform.

Step 2: Strategically Revisit Your Menu Pricing & Structure

A blind price hike across all platforms can make you uncompetitive. You need a smarter approach.

• Implement Differential Pricing: It is a common and accepted practice to have slightly higher prices on aggregator platforms than in your dine-in or direct ordering menu. This helps offset the commission cost.

• Create “Aggregator-Exclusive” Combos: Bundle items into high-value combos. A customer perceives better value in a combo, and it increases the average order value (AOV), which helps absorb the fixed cost of the commission more effectively.

Step 3: Turbocharge Your Direct Ordering Channel

This is the single most important long-term strategy. Your goal is to make it easier and more rewarding for customers to order directly from you.

• Invest in a Simple WhatsApp Ordering System: A dedicated WhatsApp number with a curated menu can work wonders for regular customers.

• Leverage Instagram & Google Business Profile: Use these free tools to post your menu and promos, with a clear “Call to Order” or “Order on our Website” button.

• Build a Basic Ordering Website: Services like Razorpay or Paytm offer easy plugins for small websites. The one-time cost is far better than a lifetime of 25-30% commissions.

• Offer “Direct Ordering” Incentives: Offer a 10% discount or a free dessert for orders placed directly. The cost of this incentive is still lower than the aggregator commission you save.

Step 4: Master the Aggregator Game (If You Play)

If you continue using aggregators, be strategic.

• Analyze the New Tiers: Don’t just pick the cheapest plan. Analyze which plan gives you the best balance of visibility and cost based on your order volume.

• Use Promotional Budgets Wisely: Instead of blanket discounts, use targeted promotions for slow days or to clear excess inventory.

• Optimize Your Listing Religiously: Use high-quality photos, respond to all reviews, and keep your menu updated. Organic visibility still matters.

Step 5: Double Down on Customer Relationships

Your biggest asset is your customer database, not your presence on an app.

• Collect Phone Numbers & Email IDs: For every direct order, collect contact information (with permission).

• Start a Simple SMS/Email Newsletter: Inform your loyal customers about new dishes, weekly specials, and direct ordering benefits.

• Create a Loyalty Program: A simple “stamp card” or points system for direct orders encourages repeat business and builds a community around your brand.

The Coach’s Perspective: This is a Forced Evolution

In our restaurant coaching programs at RestaurantCoach.in, we’ve been anticipating this shift for years. The over-reliance on a few third-party platforms was always a risky strategy. This change, while painful in the short term, is a forced evolution for the Indian restaurant industry.

The future belongs to the “Omni-channel Restaurant.” The most successful food businesses of tomorrow will not be “Swiggy restaurants” or “dine-in restaurants.” They will be brands that seamlessly integrate multiple channels:

• A great dine-in experience.

• A reliable direct delivery system.

• Strategic use of aggregators for customer acquisition.

• A strong retail or packaged goods arm.

This move by Zomato and Swiggy is simply accelerating that future. It separates the strategic entrepreneurs from the operational managers. The question is no longer “How do I get more Swiggy reviews?” but “How do I build a brand that customers seek out, regardless of the platform?“

Conclusion: Turn This Challenge Into Your Competitive Advantage

The new Zomato and Swiggy commission structures are a significant challenge, but they also present a massive opportunity. This is your chance to build a more profitable, sustainable, and independent business by taking control of your customer relationships and diversifying your revenue streams.

Stop seeing yourself as a victim of platform policies and start acting as the CEO of your brand. Implement the five steps outlined above, focus on building a direct channel, and remember that the ultimate goal is to make your food so memorable that customers will happily bypass the aggregators to get it directly from you.

FAQ Section

Q1: Is differential pricing (having different prices on Zomato/Swiggy) legal and ethical?
A: Yes, it is both legal and a standard business practice. You are paying for a service (customer acquisition and delivery) from the aggregators, and that cost is reflected in your pricing on their platforms. Many industries practice channel-based pricing.

Q2: My restaurant is 80% dependent on Swiggy. What should I do first?
A: Your first priority is to start building a “lifeboat” – your direct ordering channel. Begin with a simple WhatsApp menu for your most loyal customers and promote it aggressively on your social media and packaging. Your goal is to slowly reduce that dependency to 60%, then 40%, over the next 6 months.

Q3: Are there any government regulations coming to control these commissions?
A: While bodies like the NRAI have raised concerns, there is no immediate regulation in sight. It is risky to base your strategy on the hope of external intervention. The most powerful response is to adapt your own business model.