Restaurants earn 28 per cent revenue through online channels: CCI study

Our Bureau New Delhi | Updated on August 30, 2019

Representative image   -  torwai

Mobile phones and accessories constitute the largest share of e-tailing, says the study

According to interim findings from the Competition Commission of India’s (CCI) market study on e-commerce in the country, restaurants earned around 28 per cent of their revenue through online platforms. This study was conducted across the country.

It also found that of the respondent restaurants, 69 per cent went online between 2016 and 2018, while 78 per cent overall respondents have a presence online on three platforms on average. Further, online platforms are expanding and setting up their own cloud kitchens and are also furthering their B2B presence such as supply of food ingredients.

Moreover, restaurants also felt that the data gathered is being used by online platforms to promote their own cloud kitchens. However, the platforms said that the data is shared with the restaurants. The study also found that restaurants felt that the discounts on these platforms cannibalise dine-ins and that the platforms increase the commission charged unilaterally and arbitrarily. But the platforms maintained that such terms are negotiated bilaterally.

Among the other areas the study focussed on was the online sale of goods. The study found thatmobile phones and accessories constitute the largest share of e-tailing, followed by lifestyle goods. It also highlighted the emergence of online-only sellers and marketplaces developing their own private labels.

Here, sellers alleged that online marketplaces treat certain sellers preferentially and such sellers get a higher search ranking. Marketplaces contended that searches are driven by algorithms and take numerous factors into account.

In the hospitality sector, the CCI study found that respondent hotels were listed on at least five online travel agencies. However, direct and corporate sales accounted for the highest source of their revenue. It was also found that large hotels offer less than 20 per cent of their total room inventory on online portals, whereas small and mid-sized hotels offered over 20 per cent.

CCI has invited responses and feedback to this study and has provided time till September 30, 2019.

Published on August 30, 2019

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