Zomato-restaurants row in India: What it means for customers

Photo: Zomato

More than 1,200 restaurants have reportedly delisted themselves from food platforms such as Zomato in a National Restaurant Association of India (NRAI)-led campaign called #LogOut, to protest against the “unsustainable” deep discounts they offer. While platforms claim the discounts help increase footfalls and sales for restaurants, restaurant owners say their businesses are suffering for it.

While the official number of delisted restaurants, according to Zomato, is only 65, which is 1% of the restaurant partner base of Zomato Gold, according to Brijesh Pande, chief executive officer of Mumbai-based restaurant D51 Bar and Kitchen, and member of NRAI, the number is above 450 in Mumbai alone.

The row

The delistings followed Zomato’s recent introduction of a plan called “Infinity Dining” for subscribers of Zomato Gold, which allows them to order anything from the menu of partner restaurants at a relatively nominal price, for a limited period of time. In a post on the Zomato blog, Gaurav Gupta, chief operating officer and co-founder of the company, wrote, “For the same price that users would spend on a typical two-course meal, they can now order anything and everything you want from the entire menu (yes, the entire menu!) with unlimited servings of their favourite dishes.”

Zomato CEO Deepinder Goyal, in a tweet, acknowledged the problem. “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. I am sad that young entrepreneurs (much like me) in the restaurant industry are feeling the pressure to such an extent that they had to launch such a campaign. We set out to create a company which can create a massive impact on consumers, as well as business owners. 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 tweeted.

Customers’ plight

The aggregator, however, did not address what customers can expect in the wake of the delistings.

The delistings can be painful for customers, since many have become accustomed to deep discounts. Many customers reacted to reports about the #LogOut campaign on the social media with annoyance, stating that they believed restaurants inflated prices to begin with and did not want customers to save on orders. The delistings also mean fewer options for customers, especially those who have paid for a Zomato Gold or Infinity pass.

Till the dissenting restaurants and platforms reach an agreement, customers will have to make do with what is still on offer. While Zomato Gold can still be availed of at the remaining partner restaurants, according to users, Zomato’s landing page has been stripped of many of the offers it usually lists. If you have recently bought a Zomato Gold or Infinity pass, this might mean fewer discounts for you for the time being. If you are planning to buy one of these deals, it might be wise to wait till the dust settles to make your purchase.

Singapore Reporter/s

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Following vacancies can be applied for (only in Singapore).   

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Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.