While thousands of restaurants have waged a war against online food aggregators like Zomato and Swiggy, the online delivery platforms have increased the restaurant sales by 30%. Backed by a gamut of factors including better brand visibility and larger consumer base access, restaurants have witnessed a 1.3 times increase in revenues. “Online partnerships have enabled restaurants to increase overall top line by 30% via a large consumer base and strong brand impact,” according to a recent report by business management consulting firm RedSeer. The report added that restaurants improved on their bottom-line as well as online partnerships helped them with improved kitchen utilization.
With the arrival of food service aggregators, there has been a decrease in the number of orders which were placed via phone, takeaways and dine-ins. The same has been replaced and scaled up by online orders, according to the report. Significant shrinking has been observed in takeaway and phone based ordering which fell from 20% and 10% respectively to 5% each.
However, many restaurants have recently logged out of these platforms alleging unfair trade practices and heavy discounts by these platforms. United under Bengaluru-based NRAI (National Restaurants’ Association of India), the restaurants are now demanding an end to the discounting policies of these platforms. Issues were also raised about Zomato’s paid subscription program Zomato Gold and NRAI alleged that several bargain hunters are hurting some restaurants.
Zomato was quick to acknowledge “mistakes” on its part and said that it will make amendments to the Gold program. In a letter which was circulated among partners, Zomato said that it will limit a Gold subscription to single user per day and won’t allow multiple logins as some customers abused the subscription by sharing login IDs. Many other changes were also proposed. However, the same didn’t get the approval of NRAI president who called it “another attempt to stuff out old wine in a new bottle. It’s a tweak in the drug which does not solve the addiction,” Rahul Singh had said earlier.