Sunday January 26, 2020
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Zomato Reconstructs its ‘Gold’ Service to Benefit Restaurants

Other players like Dineout and magicpin have said they are already working with the restaurants to enable sustainable growth of the restaurant industry in the long run

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Zomato. Twitter

Giving in to the demands of offline restaurants to stop “unethical” deep discounting practices, online food aggregator Zomato on Wednesday announced to immediately reconstruct its “Gold” service to help drive better margins for the restaurants.

In a letter to its partner restaurants accessed by IANS, Zomato CEO Deepinder Goyal said that the company has put a minimum floor on Gold membership fee and will not sell “Gold” service at anything less than Rs 1,800 for an annual membership.

“The biggest pain point we heard was that users hop between places on a busy night, claiming 1+1 starters at one place, 1+1 main course at another, and 2+2 drinks at the last.

“To solve this, we will limit Gold usage by a single user to one unlock per day. This will ensure that customers complete their dining experience at a single restaurant, bringing the net effective discount down significantly,” Goyal said in the letter.

Another big pain point, said Goyal, was about multiple number of Gold unlocks per table.

“Going forward, we are going to restrict the number of unlocks to a max of two per table. This will be applicable from September 15. For the use case of more than 5 people on a table, we are coming up with a modified Infinity Dining product based on set menus which will work really well for large groups,” the Zomato CEO explained.

The letter came after a nationwide #logout campaign by the restaurants. The National Restaurant Association of India (NRAI) on Tuesday told the online food aggregators to realign their offerings to create a restaurant-friendly ecosystem, thus ending freebies and detox the consumers from discount addiction.

Goyal said the company will lock a user login to a single device ID so that login sharing becomes impossible.

“We will also introduce features to block sharing of unlock screens over WhatsApp etc. This will be implemented for all existing and new Gold members.”

Goyal said they have also discontinued the trial packs for Gold that it recently launched.

“Based on your ratings for a user, we will churn out users who consistently show bad behaviour at a restaurant,” he said.

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Some restaurants have come together to detox consumers from discount addiction. Pixabay

Zomato will now send monthly reports to restaurants on the number of users that have been been removed from Gold.

“Also, Gold restaurants that have a minimum of 1,000 Gold unlocks per quarter per outlet, and get an average cumulative rating of 4.5+ for Gold visits during that quarter, will get ads credit worth Rs 25,000 per outlet per quarter from Zomato to promote your brand and drive non-discounted business to you,” Goyal said in the letter.

The average rating from Gold visits across India is 4.3, so a significantly large number of restaurants will qualify for this.

“For all Gold partners that have a minimum of 600 unlocks per quarter, we will invest back in your brand – shoot videos for your business free of charge and distribute these videos widely on Zomato,” said Goyal.

Non-peak days account for 45 per cent of total Gold unlocks.

“We will actively promote Gold membership usage at your restaurant through personalised push notifications to users on non-peak days. This will help further fill up your non-peak days – thus increasing bottom-lines,” Goyal added.

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The changes have been put in motion immediately and will be completed before September 15.

Zomato said it is not going to hold anything against the restaurants for participating in the #logout campaign.

“All restaurants that dropped out of Gold during the #logout campaign and sign back up on Gold before 26 August – they will not need to pay the sign-up fee to return back to the programme,” said Goyal.

In a meeting with the five top players — Zomato, EazyDiner, Dineout, Magicpin and Nearbuy – in New Delhi on Tuesday, the NRAI discussed how technology has a key role to play in driving engagement and discovery for retailers versus deep discounting.

The meeting came after thousands of restaurants delisted from online food aggregators’ platforms across the country.

Other players like Dineout and magicpin have said they are already working with the restaurants to enable sustainable growth of the restaurant industry in the long run. (IANS)

Next Story

Zomato Acquires UberEats in India in an all-stock Deal

The deal comes in the wake of merger talks between Zomato and Swiggy, whoch both the companies have denied to date

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Zomato NRAI
Zomato in a smartphone device. Pixabay

Zomato on Tuesday announced that it has acquired Uber’s Food Delivery Business in India in an all-stock deal and Uber will have 9.99 per cent stake in the Deepinder Goyal-led food delivery platform.

According to sources close to the deal, it is in the range of over $350 million or nearly Rs 2,500 crore.

Uber Eats in India will discontinue operations and direct restaurants, delivery partners, and users of the Uber Eats apps to the Zomato platform, effective from Tuesday.

“We are proud to have pioneered restaurant discovery and to have created a leading food delivery business across more than 500 cities in India. This acquisition significantly strengthens our position in the category,” said Goyal, Founder and CEO, Zomato.

According to company sources, for the first three quarters of 2019, “our Uber Eats business comprised 3 per cent of our global Eats gross bookings, but was more than 25 per cent of our global Eats Segment Adjusted EBITDA losses”.

Uber started its food delivery service in India around mid-2017, but has not been able to scale up in the face of big players like Zomato and Swiggy.

It currently has nearly 26,000 restuarants listed on its platform from over 40 cities.

Zomato, Dining, Gold
Home-grown restaurant search and delivery platform Zomato on Friday introduced the “Infinity Dining” plan for its “Gold” subscribers that allows them to have unlimited buffet at partner restaurants. Pixabay

The market is piping hot as according to a recent study by business consultancy firm Market Research Future, the online food ordering market in India is likely to grow at over 16 per cent annually to touch $17.02 billion by 2023.

Uber CEO Dara Khosrowshahi said that the Uber Eats team in India has achieved an incredible amount over the last two years.

“India remains an exceptionally important market to Uber and we will continue to invest in growing our local Rides business, which is already the clear category leader,” said Khosrowshahi.

“We have been very impressed by Zomato’s ability to grow rapidly in a capital-efficient manner and we wish them continued success,” he added.

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On January 10, Zomato had announced that it has secured $150 million in fresh funding from Ant Financial, a subsidiary of China-based giant Alibaba.

The latest round of funding in Zomato, which currently value the company at $3 billion, is part of $600 million funding round announced by Zomato CEO Goyal at a Delhi event last December.

The deal comes in the wake of merger talks between Zomato and Swiggy, whoch both the companies have denied to date. (IANS)