Remember, Zomato and Swiggy may be getting fancy valuations in the market, but they are still loss making. They need to rapidly figure out ways to leverage a huge data pool to boost business. The latest such idea is private labelling food products by digital platforms like Swiggy and Zomato. That will give them much higher retention in the delivery and also make the best of the customer data and the last mile delivery networks built by them. They need to service their capital. 

Another reason to go for private label food products is to leverage the quick commerce infrastructure. Today, they have dark stores, fleet of delivery units, complete feet on street staff handling the last mile delivery with efficiency and a workable and valuable business model in place. From quick commerce to the private labelling of food products, it is a mere brand extension. For the likes of Instamart, Blinkit, and Zepto; it may be tough to justify the steep valuations of Q-Commerce models, unless they are able to do multiple iterations and built multiple revenue models into the idea. Private labels for food is just the start. 

In fact, one of the finest and eloquent justifications given by digital platforms to justify private label food products is that they can now leverage feedback of customers. For instance, they can select and curate food products that are rated very high on customer rankings and use algorithms to do dark store allocations. It would be an unbeatable logic and also put the feet on street to better use. This will ensure higher earnings for them and also more revenues for Zomato and for Swiggy. This is a very valuable data set that they have and private labelled food may allow that to be leveraged. What restaurants are worried is that individual restaurant brands may get subsumed. 

Ford Motors took a long time to grasp that “You can have a car of any color, as long as it is black” does not work. It only drives customers away; the minute they have a choice. Indian eating joints are learning it much sooner. Imagine a Zomato or Swiggy that curates the best food items under each category based on popular feedback and gets that to your home in 15 minutes flat. It would be tough for any restaurant to match that, unless they can assure a unique dining experience. Private label foods is an idea whose time has come and the sooner eating joints adapt, the better. You do not protest or legislate against an idea that adds value to customers!