Friday December 6, 2019
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NRAI Asks Delivery Platforms to do Away with ‘Deep Discounts’

Over the last 11 days, restaurants across the country led by the NRAI carried out the ‘#logout’ campaign against deep discounts provided by food service aggregators (FSAs) in dine-in services, and a lot of the restaurants have logged out of the services of the aggregators

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zomato, NRAI
Founded in 1982, the NRAI represents the interests of over 5 lakh restaurants. Pixabay

After waging an all-out war against steep discounts by online food aggregators in the dine-in segment, the National Restaurant Association of India (NRAI) has now asked delivery platforms to do away with deep discounts while addressing other issues.

The NRAI wrote to Swiggy, Zomato, Uber Eats and Food Panda on Monday to resolve the issues.

In letters written to all major online delivery aggregators, the association has said that during its interaction with restaurant operators, it was observed that operators displayed strong resentment at the current status of transparency, forced discounting, uneven commission structure and general high-handedness of the aggregators in the food delivery space.

“There was a high demand of immediately extending the #Logout movement to the delivery vertical as well. However, our responsibility as an industry body compelled us to engage in dialogue first,” the letter said.

As in the case of dine-in services, the industry body complained about discounts being offered in the delivery segment throughout the year.

“Discounts are a privilege and are extended on occasions. However, in the current environment, deep discounts, ranging from 30-70 per cent, are being deployed 365 days of delivery platforms.”

This distorts the market and hinders profitable growth of the sector. These discounts are not sustainable nor are they beneficial to the industry at large,” the letter said.

Zomato NRAI
The NRAI will very soon initiate movement against online delivery aggregators which are affecting the sustainability and growth of the restaurant industry. Pixabay

The association reiterated its stand that these discounts are mostly funded by restaurant operators and sometimes under “veiled coercion”.

The letter also spoke of uneven commission charges. It said these charges are predatory and delivery service providers revised the charges unilaterally.

“These commissions or charges are not standard by any nature, rather they are exploitative and bereft of rationale. We request you to create a transparent system of commission or charges based on certain logical metrics such as AOV (Average Order Value), Volume of Business etc,” NRAI said in a letter.

The association also noted that the aggregators do not share customer data with restaurants despite repeated requests and also sought assurances that the data would not be monetised.

It further observed that “big delivery aggregators are using the sales and customer data to develop their own brands, their own kitchens and diverting traffic thereby creating a grossly unfair playing field with other restaurants.” NRAI described this behaviour as a conflict of interest on the part of the aggregators.

Anurag Katriar, Head of NRAI Mumbai Chapter, said: “Let me reiterate that we are not against the technology platforms, but our concerns are largely around these aggregators misusing their dominant position to indulge in predatory behaviour; commercially and in forming the terms of engagement.”

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Over the last 11 days, restaurants across the country led by the NRAI carried out the ‘#logout’ campaign against deep discounts provided by food service aggregators (FSAs) in dine-in services, and a lot of the restaurants have logged out of the services of the aggregators.

NRAI has struck a deal with Dineout, Eazydiner, Nearbuy and Magicpin to make favourable changes to their model and charges, as the four have agreed to rejig their products to do away with deep discounting. Zomato, which provides the Zomato Gold platform for dine-in services has stopped engagement with NRAI on after it had made some changes which did not go down well with he restaurants association. (IANS)

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NRAI Slams Zomato for Extending its “Gold” Programme on its Delivery Platform

It is another instance of Zomato changing the goalpost

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NRAI, Zomato, Gold
The programme is currently available in 16 cities. Pixabay

The National Restaurant Association of India (NRAI) on Saturday slammed Zomato for extending its “Gold” programme on its delivery platform, saying it is a desperate attempt by the online food aggregator to shore up the sinking fortunes of its flagship Gold programme.

Zomato has announced to take its Gold programme where existing and new Zomato Gold members will be able to use Gold for home delivery orders. The programme is currently available in 16 cities.

Zomato Gold was till date available only on eating out at fine-dine restaurants.

“It is another instance of Zomato changing the goalpost. Gold was originally launched as a tool to promote the culture of ‘dining out’, but now it is being extended on deliveries too,” said NRAI, which has been at loggerheads with Zomato regarding the Gold programme over deep discounting practices.

NRAI, Zomato, Gold
The National Restaurant Association of India (NRAI) on Saturday slammed Zomato for extending its “Gold” programme on its delivery platform, saying it is a desperate attempt. Pixabay

“Essentially, it is now a programme that merely promotes ‘deep discounts’ on both dine-in and delivery verticals, the cost of which is borne solely by the restaurant partners,” the restaurants’ trade body added.

NRAI also said that it continues to remain firm in its belief that Zomato Gold in its current form is an unacceptable proposition.

“We expressed the same unequivocally to the Zomato team in our recent talks. However, in utter disregard to the viability of the restaurant fraternity, they have chosen to extend the programme further to the delivery vertical as well,” the NRAI said.

“The NRAI remains steadfast in its belief that Zomato Gold in its current form is not acceptable in either dine-in or delivery segment,” Anurag Katriar, President of NRAI, had said in a statement.

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According to the NRAI, Zomato’s move will be calamitous to the business in the delivery segment and NRAI appeals to all restaurants and cloud kitchen entrepreneurs to stay away from Zomato Gold on delivery.

“Offer right quality at the right price, rather than falling for such discount gimmicks,” NRAI told Zomato, adding that the #ZoGoIsNoGo campaign is on and “we continue to #StayLoggedOut.”

According to Zomato, food delivery was in its early stages when it launched the Gold programme in 2017.

“We thank our restaurant partners for all the feedback, and users for the love they have shown towards Zomato Gold. It is very much these conversations, that led us to put forward a better and bigger Gold programme,” Gaurav Gupta, Co-founder and COO, Zomato, said in a statement.

NRAI, Zomato, Gold
Zomato has announced to take its Gold programme where existing and new Zomato Gold members will be able to use Gold for home delivery orders. Pixabay

The Gold programme drives 25-30 per cent business for its restaurant partners and more and more Gold users (90 per cent) are exploring new restaurants because of the programme.

“It, therefore, makes eminent sense to extend this discovery behaviour to the delivery restaurant base,” said Gupta.

Zomato has always been hellbent to make its contentious Gold programme available for delivery.

“With over 13,000 establishments across 41 cities, Zomato Gold for Delivery brings a wide choice of great restaurants to Zomato Gold members,” added Mohit Gupta, CEO, Delivery, Zomato.

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Gold on delivery will offer the second-highest priced item on the order for free, except for combos, MRP items and special dishes.

It will only apply on minimum order values of Rs 300 with discount capped at Rs 300 per order.

New users will pay Rs 1,800 for an annual package that will give them access to dining out and delivery privileges. (IANS)