Beyond taste, packaging and speedy deliveries, another realm that we look at are the offers or discounts provided by these food apps such as Zomato, Eazydiner and Nearbuy. For consumers, these reductions in prices act as catalysts to order food in bulk amounts; but unfortunately restaurants find this plan of action impractical and as a result of which food products are suffering a loss of value.
The head of a national body of restaurants, on Monday, expressed dissent saying that diners have no issue in paying the food aggregators for reservation and delivery, but letting them set discounts isn’t a wise decision at all.
Further Rahul Singh, President at NRAI and CEO of Beer Café stated "Discounting blindly is one of the worst things you can do, because you’re conditioning your customer into de-valuing your product, and you’re literally throwing money away by putting it back on the table from the initial and future sales with that customer." He also adds "People who used these apps didn’t know that apps were charging both the restaurant and customers and didn’t share any of the discounts. We would have our own loyalty program for our customers."
As a result of which,
1,200 restaurants had delisted themselves from online platforms including Zomato, Eazydiner and Nearbuy under the #Logout campaign, claimed reports of National Restaurant Association Of India ( NRAI),
based on the discounting practices that these online food aggregators had taken up. On Monday, several other restaurant owners removed themselves, causing the number to be even higher at 2,200.
Some of the primary chains that have logged off comprise First Fiddle restaurants with outlets such as Plum by Bent Chair, Dragon Fly and Lord of the Drinks, Olive Group’s restaurants Sodabottleopenerwala and Olive, Beer Cafe, Impresario with outlets such as Socials and Lite Bite Food that runs Punjab Grill and Asia 7.
While Zomato alleged that only 65 restaurants opted out from its platform, which is just 1% of the restaurant tie-up base of its premium Gold service.
Zomato Founder & CEO Deepinder Goyal has attempted to recognize the restaurant industry’s difficulties and said on Twitter that "Zomato Gold has been a major hit, but we understand that bargain hunters have also joined Zomato Gold and they are hurting some segments of the restaurant industry very badly. This is a wake up call that we need to do 100x more for our restaurant partners than we have done before."
The main reason behind such a conflict of interests between restaurant owners and online food aggregators was Zomato’s "Infinity Dining" plan that turned out to be one of the stimulating factors and caused Zomato "Gold" subscribers to opt for unlimited items at its partner restaurants.
Riyaaz Amlani, CEO of Impresario Entertainment and Hospitality remarked "Zomato Gold was to be an exclusive offer extended to limited number of restaurant partners. Zomato extended it to a million subscribers and got every restaurant on board."
Thus, to overcome this problem, Dineout along with their investor Times Internet have come to the conclusion, saying that they are closely working with restaurants and NRAI in order to build a more effective consumer facing platform which will not only address the restaurant’s technological needs but also solve it with multiple B2B elements to initiate revenue and costs.
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