Back in 2015 when I started my first job, I had an epiphany while I was trying to plan a special dinner for me and my family. While browsing the offers on apps like Zomato Gold and Dineout, I realized how the size of discount was affecting my decision; and how I was not even paying attention to the quality of service I want to receive. The truth is, with the advent of food and dining aggregator apps, there has been a shift in trend. With these apps leaving no stone unturned to stay in the competition, the deep discounting has turned the customers discount-centric and the restaurant frustrated.
Like it or not, this throat-cutting competition has somehow lead to the recent rift between Zomato and Restaurants. Around 1200 restaurants from across the country reportedly delisted themselves from food platforms in a National Restaurant Association of India (NRAI)-led campaign called #LogOut, to protest against the “unsustainable” deep discounts they offer.
To understand this properly, let’s understand what exactly is the problem that has led to the #LogOut campaign. So, as the competition between aggregator apps got intense, the discount size increased which was was directly impacting the restaurants.
The anytime, anywhere, any-day discounting behavior of aggregators is affecting restaurants!
Zomato had recently launched ‘Infinity Dining’ in partnership with 350 restaurants – with at least a 3.5 rating – in Delhi, Mumbai and Bengaluru. This program lets the food apps’ Gold Subscribers have unlimited a la carte at partner restaurants for the same price that users would spend on a typical two-course meal. Adding to the pain of the restaurants, users can now order anything and everything they want from the entire menu with unlimited servings of their favorite dishes.
Now, while the competition between the food apps is one part of the problem, the other major reason behind this issue is the discount-centric customers. With customers focusing more on the discount rather than the quality, restaurants are forced to either compromise on the quality of their food and their service or delist themselves from the apps to detox consumers from discount addiction.
What is the solution and how customers will play a role in the execution of the solution?
If the food-app users continue to follow the discount-centric approach, more and more restaurants from across India will delist themselves from the said apps. The problem will continue to grow and adversely affect restaurants and consumers alike. In fact, the restaurants under the NRAI in Delhi and Mumbai have also reportedly threatened to delist from these dining platforms. Therefore, the only way this issue can be resolved from spreading is when consumers start considering the quality of food and service as well apart from the size of the discount.
While discount should remain one of the primary influencing factors, the importance of quality shouldn’t be undermined. Besides, food apps must keep the restaurants’ concerns in mind while designing or introducing new discount offers. The recent meeting where the Department for Promotion of Industry and Internal Trade (DPIIT) met the official representatives from online food delivery apps such as Swiggy, Zomato, MagicPin, etc. along with offline industry leaders and directed them to sit and solve their differences topromote equitable growth in the industry.
Hopefully, this discussion would end on a positive note and food-delivery apps would stop playing this discount-game on the cost of restaurants’ and enforce a new trend – a trend where customers would focus not only on the cost of food but also the quality.
By: Rishab Vyas Founder and CEO of Baromeeter