Zomato restaurants standoff shows no sign of ending

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Published: August 23, 2019 3:53:46 AM

In a tweet on Thursday, Zomato’s founder Deepinder Goyal said: “This ‘logout’ campaign as it seems now is driven by Rahul Singh (president, NRAI), along with participation of a few large restaurant owners, to use the NRAI platform to sabotage aggregators and benefit themselves.”

Zomato, Zomato restaurant, Zomato news, NRAI, industry news, Deepinder Goyal, Zomato gold, Zomato  india, Zomato  offerFurther, to add to partners’ revenue growth, Zomato offered to provide ads credit and other promotional services to restaurants meeting certain thresholds.

In the ongoing feud between food discovery and aggregator platform Zomato and the restaurants, the former did press the truce button by agreeing to change the terms of the dine-in membership programme Gold, but the latter have decided to stay off the platform. The National Restaurants Association of India (NRAI) said in a statement that the restaurants will not come back until the deep discounting phenomenon is off the table. This in effect means that NRAI has rejected the proposal put forward by Zomato in a meeting between the two sides on Tuesday and is also upset that Zomato went ahead and communicated its new terms to its partners.

In a tweet on Thursday, Zomato’s founder Deepinder Goyal said: “This ‘logout’ campaign as it seems now is driven by Rahul Singh (president, NRAI), along with participation of a few large restaurant owners, to use the NRAI platform to sabotage aggregators and benefit themselves.”

Goyal said the changes being made to the Gold programme are in “supreme interest” of restaurant partners. Aggregators are “being painted as bullies”, he added.  Last week, over 1,000 restaurants across the country delisted themselves from the dine-in programmes offered by the platforms as part of the ‘logout’ campaign led by NRAI. The number now stands at over 2,500.

In a mass mail sent to restaurant partners earlier this week, Zomato said it will restructure its Gold programme — a subscription service that provides complimentary food and drinks to users. The firm said it will limit its Gold usage by a single user to one unlock per day so that “customers complete their dining experience at a single restaurant, bringing the net effective discount down significantly”.

Further, to add to partners’ revenue growth, Zomato offered to provide ads credit and other promotional services to restaurants meeting certain thresholds.

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Restaurateurs, however, did not budge and decided to remain ‘logged out’ from the dine-in programmes offered by the platforms. They want that the Buy One, Get One offer be diluted, which Zomato has not done.

In a two-day meeting held between NRAI, food aggregators and restaurant reservation platforms earlier this week, it was decided that aggregators will ‘rejig’ their discounting and promotional features. NRAI said restaurants do not get any share of the proceeds that aggregators generate from guests as subscription fees. “The idea of scoring a discount should make guests feel special and not give them a sense of beating the system. Discount is a privilege and not a right,” president Rahul Singh said.

Separately, the Federation of Hotel & Restaurant Associations of India (FHRAI) has written to the top leadership of food service aggregators, outlining a list of issues that need to be worked out between its restaurant partners and the aggregators. FHRAI has listed six issues for consultation which includes profitability and ‘unfair customer appeasement practices’ among others. “While FSAs are floating offers and discounts to lure customers, it is coming at a cost to the restaurants. If a restaurant withdraws from discounting, the FSAs app immediately downgrades it and favours another restaurant which may still be in a position to discount. This is just not fair,” said Pradip Shetty, honorary joint secretary at FHRAI.

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