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Growing discontent among Indian restaurants w.r.t burgeoning cost of deep discounting that made their business unprofitable, has aggravated to an all time high in the last couple of days. The restaurants are at loggerheads with the Internet food aggregators, or in other words, the food delivery apps ! Indeed trying times for the Indian food industry.
In a first of it’s kind protest, an estimated 2000 restaurants across the Indian subcontinent have de-listed from the membership or table reservation options of leading Aggregators like Zomato, Swigy, EazyDiner and Dineout. This is in protest of the Deep Discounting practices of these food delivery apps which is digging a deep hole in the restaurant’s pocket.
How Aggregators Lured The Restaurateurs Into This Mess?
The entire fiasco started a few months back when these aggregators came up with extremely tempting deals for people who were tech savvy and frequently ordered food online . From “Buy-one-get-one-free” offer to flat 50% off on anything you order, the offers were hard to be ignored . All this came in the form of packages like “Zomato Gold Package” and several others . Initially it was all hunky dory but slowly reality started settling in . The promise of increased footfalls for restaurants and more deliveries for takeaways , thereby increasing the revenue seemed to be a far cry. In-fact, the whole scenario turned out to be an aggressive discount spree making sales revenue extremely unprofitable. Not to mention the inferior quality customer and delivery service leading to dissatisfaction and loss of reputation.
Much to the dismay of the restaurateurs, what initiated as an “Elite” program meant for the chosen few people and restaurants, became a mass membership scheme. Infact, Zomato Gold sold more than 1 million memberships in the span of a month!
The Aftermath
To protect the interests of restaurants and takeaways across the country, the NRAI (National Restaurant Association of India) took the lead and led to the campaign #logout. Since mid August, more than 2000 restaurants have dissociated themselves from these tech ventures . NRAI has sent letter to these aggregators addressing the issues like inexplicable massive discounts , lack of transparency in commission calculation charged by the apps among other issues on August 26,2019 . It would be interesting to see the steps taken by these food delivery giants to mitigate the impact of the #logout protests.
So Who Bears The Brunt?
Well, the answer is simple, Who else than the restaurant partners ? How could one think that these costs would be borne by the aggregrators who have the onus of multiplying footfalls manifold ! There are few cases where it is born in the ratio of 50:50 but that’s very rare..There is no transparency you see..Smaller restaurants actually bear the brunt of these deep discounts as these are forced upon their throats. Lose orders, if you don’t take these discounts..
A Stitch In Time Saves Nine!
In response to the allegations on these Bigwigs, Zomato founder, Deepinder Goyal , urged for Truce and Sanity ! He has assured to make good the damage done to the industry and is committed to make modifications to Zomato Gold so that it is a win-win situation for all the three- Restaurants, aggregators and the consumer. He has also appealed restaurateurs to call of the #logout campaign.
So for now, it’s wait and watch. Would Deepinder Goyal along with other internet aggregators be successful in having a collaborative discussion with the restaurant owners and find a viable way forward ?
My Take..
I might sound selfish,but honestly, I have enjoyed my stint as a Zomato Gold member. Sumptuous lunch/dinner with my loved ones and that too at discounted prices had given us several reasons for double celebrations. So an appeal to the restaurateurs, once you guys reach a sustainable and mutually beneficial solution, please #login !
Watch out this space for more updates.