Zomato’s woes continue: Restaurants to stay delisted despite changes made to deep discounting programme

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Updated: August 21, 2019 8:50:13 PM

In over a three-page long letter to restaurants sent on Wednesday, Zomato’s founder Deepinder Goyal explained the changes made to the Gold programme and how it benefits restaurants.

Zomato, Zomato lays off, zomato customer support department, zomato internal job placement, zomato supportZomato’s founder Deepinder Goyal said that the company is limiting Gold usage by a single user to unlock only one benefit per day.

Despite changes made by the foodtech unicorn Zomato to its membership-based dining out service Gold following multiple meetings with restaurant body NRAI to curb deep discounting allegedly hurting restaurants’ business, NRAI on Wednesday said that the changes are another attempt to stuff old wine in a new bottle. “Just two days back, a stiff penalty clause was invoked to rejoin the program if the notice period is not served. Today, they have sweetened the pill in the form of free signup to rejoin the programme,” NRAI President Rahul Singh said stressing on the industry’s “cause to obliviate the deep discounting phenomenon, and will therefore #stayloggedout.”

In over a three-page long letter to restaurants sent on Wednesday, Zomato’s founder Deepinder Goyal explained the changes made to the Gold programme and how it benefits restaurants in three areas — driving better profit margins, getting restaurants only ‘high-quality’ user base via Gold, and lastly, growing revenue more sustainably for restaurants. 

Also read: No more deep discounts on Zomato, others; food aggregators discuss measures after restaurants’ objection

Goyal said that the company is limiting Gold usage by a single user to unlock only one benefit per day that “will bring the net effective discount down significantly,” the letter said, a copy of which is seen by Financial Express Online. Earlier restaurants had claimed that customers would claim the “1+1 starters at one place, 1+1 main course at another, and 2+2 drinks at some other.” Zomato also set the membership price for Gold at Rs 1,800 for a year and removed the trial pack for Rs 299 to drive quality user base.

The company also announced giving ads credit to restaurants worth Rs 2,500 per outlet per quarter to boost non-discounted business. This is applicable for restaurants having 1,000 Gold unlocks per quarter per outlet and an average cumulative rating of more than 4.5 for Gold visits during that quarter.

Goyal called for re-joining of restaurants on the platform that “logged out” last week following the logout campaign led by NRAI. However, he ‘waived off’ the fee to join back. “All restaurants that dropped out of Gold during the logout campaign and sign back up on Gold before 26th August – they will not need to pay the sign-up fee to return back to the programme,” Goyal said.

“This is a knee jerk reaction to the #logout movement,” said Singh adding that “it’s a tweak in the drug, which doesn’t solve the addiction,” and that this Gold has lost its sheen forever. The logout campaign had reportedly led to the delisting of over 1,200 restaurants in various cities from five platforms — Zomato, EazyDiner, Dineout, Magicpin, and Nearbuy.

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