Amazon vs Swiggy: Customers vs Merchants

Posted by Chris on 26th August 2019 (about a 2 minute read).

In the US, Amazon is coming under criticism for forcing merchants to sell at the lowest price they offer on other sites.

Amazon monitors other websites, and if they find the same product offered there for less, they notify the merchant that they need to reduce the price on the Amazon platform. If they don’t then their product becomes harder to find in searches and can have the buy button removed.

I can understand Amazon’s perspective - part of their brand value is from providing items at the lowest price so consumers don’t need to shop around. Hotel aggregators do this all the time - insist that hotels also provide any specials or discounts they offer elsewhere on the platforms.

In India, there is growing consumer frustration with restaurant delivery apps like Swiggy. They began by offering restaurant deliveries, where the food is the normal restaurant price, and from their commission, they paid for delivery. Obviously, this isn’t sustainable, so delivery charges crept in. Ok fair enough.

But the restaurants are unhappy with the commission they are paying and want to recover that, so now there are ‘restaurant charges’ added to the bill to cover packing etc. Personally, I think putting the dish in a plastic container and handing it to a delivery driver is much less work than serving it on a plate to people seated in the restaurant.

On top of that, it has been revealed that some restaurants are inflating the prices of dishes on the menu that they upload. So a dish costs more online than in the restaurant, plus restaurant charges, plus delivery charges (and sometimes 'surge' delivery charges). Then the apps keep running ‘discounts’ that reduce the extra restaurant or delivery charges.

Amazon would be working to drive down prices, and dropping restaurants that try to charge more online. Swiggy seems happy to keep stacking costs, comfortable that users will still order.

Which system is better for consumers? The merchants? The society at large? No right or wrong answers. Depends what you value.