No big deal on food delivery apps?

As talks begin to end impasse between restaurants and aggregators, NRAI tells tech giants to revise their profligate loyalty programmes

No big deal on food delivery apps?

Zomato head Deepinder Goyal

The very deals that foodies thrive on have become a nightmare for restaurants across India. The #logout movement — that has so far seen 2,000 restaurants log out of tech platforms to protest unviable offers — is indefinitely on, even as talks between members of National Restaurant Association of India (NRAI) and food aggregators — Zomato, EasyDiner, Dineout, MagicPin and NearBuy — began on Monday. NRAI president Rahul Singh, in a press statement, said, "We were bemused to learn that the aggregators were promoting deep-discounts to stay competitive amongst each other. While one aggregator gave 1+1, the other had to adopt a 50 per cent discount scheme in order to stay relevant."

What hurts the most, he added, is that these deep-discounts "are funded by the restaurant industry and not the aggregators." Restaurants do not get a share of the proceeds generated as subscription fees from guests, the statement by NRAI read.

Rahul Singh, NRAI president

During the first round of talks with the food aggregators, except Zomato, saw a unanimous nod to bringing in certain uniformity in the discount structure within the trade. "We all agreed that no industry can grow purely on the premise of discount. The F&B industry can see revival only if there is more emphasis on quality and experience to consumers. For this, aggregators and restaurants have to coexist in a cohesive and cooperative business environment," Anurag Katriar, NRAI Mumbai chapter head, said.

Insiders said the narrative of Indian consumers being greedy "bargain hunters" is being peddled by a few for vested interest. They also hinted that aggregators were forced into this discounting game because of the actions of one single aggregator [hinting at Zomato].

NRAI's Anurag Katriar

"We also proposed that neither party should solely bear the cost of the subsidy. We have in-principle agreement on realigning the discount culture, jointly find ways to grow the industry and work within a limited time frame to resolve this impasse," said Katriar.

Zomato skirts issue

In Tuesday's meeting between NRAI and Zomato, NRAI put forth concerns of data masking, transparency of delivery kitchens and level playing.

Zomato runs offers like the Infinity Dining — unlimited serving at fixed costs — and Gold membership — a paid subscription model of discounts such as two drinks on two free at partner restaurants.

According to attendees, Zomato founder Deepinder Goyal spoke about some peripheral points but tried to skirt the main issue of deep discounts. He gave Zomato's perspective on how they are trying to expand the market and added that the Infinity programme on Zomato Gold is being put in abeyance for now. "NRAI made it clear that their theory is not translating into numbers for restaurateurs. It is just a game of the highest discount wins the customer," said Riyaaz Amlani, CEO, Impresario Group, who did not attend the meeting but was updated on the discussion.

Rejig product

NRAI and aggregators were in agreement that technology is the backbone to enable restaurant discovery and a friction-less experience to guests. "However, guests should not be lured by devaluing the core product at a restaurant. Therefore, it was decided, that all aggregators will rejig their features which will allow the restaurant-customer ecosystem to detox from addiction to deep-discounts that has crippled the industry," Singh said, stressing that discount was "a privilege and not a right." Unlike retail space, "where end of season sale is to clear leftovers, a restaurant doesn't serve leftovers at a discounted price," he said, adding, "It's all prepared fresh and made to order."

Meanwhile, restaurants, Singh said, are seeing the JOMO (joy of missing out) effect from the deep discounting led platforms. "The APC has gone up across, and there has been no disruption of business. Customers at large have supported.”

NRAI has been flooded with emails from restaurant bodies across the country and even some Dubai restaurants expressing distress against deep discounts.

VOICES

Vivek Kapoor, Co-Founder, Dineout

Vivek Kapoor

'As an industry body, the NRAI took a stand for all aggregators. However, their major issue is around deep discounts. DineOut has never believed in deep discounting with its restaurant-first approach. Also, we allow the restaurant partners to select the discounts that they want based on the day of the week and time of the day; completely customisable for the restaurants. This is something that the NRAI recognises"

Ravi Shankar, founder, NearBuy

Ravi Shankar

'We had a fruitful meeting with the NRAI team yesterday. We made it clear that we are not a deep discounting platform and neither have we ever been. In fact, on nearbuy.com, our partners solely determine the offers that they would like to run for their customers. Some of our best-selling partner brands offer no discounts. We do not charge any subscription fee from our customers or our partners. Customers use our platform to discover the best things to do and best places to go to which is the intent behind nearbuy.com.

We look forward to continue working with all our restaurant partners on a mutual win-win basis'

Aug 15
Day the restaurants decided to log out of food delivery apps

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