Zomato is in the news, again. The Indian restaurant service came under fire for introducing deep discounts for its Gold customers. Under the umbrella of the National Restaurant Association of India (NRAI), over 300 restaurants in Gurugram de-listed themselves from platforms such as Zomato Gold, EazyDiner, and Dineout’s Gourmet Passport.
Zomato had introduced the ‘Infinity Dining’ plan last month for its Gold subscribers. This gave them access to unlimited à la carte (food that can be ordered as separate items) at its partner restaurants.
NRAI president Rahul Singh was quoted as saying, “The situation is now aggravated through the anytime, anywhere, any-day discounting behavior by aggregators. So now restaurants have come together to detox consumers from discount addiction.”
Restaurants quit online platforms such as Zomato, EazyDiner, Nearbuy, MagicPin, and Gourmet Passport, under the #LogOut campaign in Delhi, Mumbai, Kolkata, Bengaluru, Pune, Goa, Gurgaon, and Vadodara. They claimed that the deep discounts offered by online food services were hurting their businesses.
Zomato’s founder Deepinder Goyal assured restauranters in an 8-point tweet thread that modifications will be made to Zomato Gold.
Our thoughts on the restaurant industry’s stand against deep discounting –⁰
1 – 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.
— Deepinder Goyal (@deepigoyal) August 17, 2019
He admitted mistakes committed by Zomato. “Somewhere, we have made mistakes and things haven’t gone as planned. This is a wake-up call that we need to do 100x more for our restaurant partners than we have done before.” He further said, “Zomato was committed to working with the industry and make modifications to Zomato Gold which will result in a win-win situation for restaurants and consumers.”
Deepinder, with the help of some data, tried to prove his point. “Take a look at this data – the avg price of a delivery order in India is just about the same as that of China. However, per capita income in China is 4.5x as that of India. It’s important we bring down prices to find sustainable growth in the food sector in our country.”
Appealing the restaurant owners to stop the #LogOut campaign, he said, “In the interest of consumers, we request restaurant owners to stop the logout campaign and have a collaborative discussion with internet aggregators for finding a sustainable way forward.”
The Department for Promotion of Industry and Internal Trade (DPIIT) officials held a meeting with online food delivery firms and offline industry leaders last month to discuss issues like deep discounting and opening up of private label brands by the online food platforms that have affected the operations of offline restaurants across the nation.
Rahul Singh further stated that the #LogOut campaign which started in Gurugram that had turned into a nationwide movement reflected “how restaurants across the entire spectrum have been suffering from the deep-discount epidemic”.