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Zomato Founder Responds to Restaurant Protests Over Discounting Practices

Zomato Founder Deepinder Goyal took to Twitter on Saturday evening to respond to the Logout movement by the National Restaurant Association of India (NRAI), which saw nearly 300 restaurants in Gurugram de-listing themselves from platforms such as Zomato Gold, EazyDiner, and Dineout’s Gourmet Passport, among others, over deep discounting practices.

Meanwhile, restaurants under the NRAI in Delhi and Mumbai have also threatened to de-list from online dining platforms. According to NRAI president Rahul Singh, the situation is now aggravated through the anytime, anywhere, any day discounting behaviour by aggregators.

Zomato last month introduced the “Infinity Dining” plan for its “Gold” subscribers that allows them to have unlimited a la carte at partner restaurants. The plan was introduced in partnership with 350 restaurants – with at least a 3.5 rating – in Delhi, Mumbai, and Bengaluru.

The company on Friday told IANS that it has been in touch with the restaurant industry to discuss their feedback and address any issues they may be facing as a part of its offerings. According to reports, Zomato in an email has asked its Gold restaurant partners to serve a notice of 45 days if they wish to opt-out.

Responding to reports, Goyal in an 8-point tweet thread wrote, “Our thoughts on the restaurant industry’s stand against deep discounting  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.  2 – 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.”

Goyal admitted that the company had made mistakes, and this was a wake up call to do more for its restaurant partners. He said Zomato was committed to “work with the industry and make modifications to Zomato Gold which will result in a win win situation for restaurants and consumers.” He went on to “request restaurant owners, to stop the logout campaign, and have a collaborative discussion with Internet aggregators for finding a sustainable way forward.”

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 percent annually to touch $17.02 billion by 2023. The findings showed that 95 percent of the respondents surveyed order food online, owing to promotional offers and discounts, while 84 percent said it is hassle-free and time-saving.

According to Ankit Mehrotra, Co-founder and CEO, Dineout, being the largest dining out and tech platform in the country, his company is always looking to build a more sustainable and viable ecosystem for both its restaurant partners and the users using the Dineout platform.

“As a platform, we certainly don’t believe in the concept of deep discounting. On our platform, we have persisted with sustainable discounts which works really well for both the consumer as well as the restaurants to fill up their restaurants throughout the day,” Mehrotra said in a statement.

“Over and beyond, even our premium offering of ‘Gourmet Passport’ limits the redemption to only three coupons per restaurant. In consultation with the restaurants, we run promotional campaigns for shorter durations (and not through the year) such as the “Great Indian Restaurant Festival” which gives a higher discount to the consumer but for only limited covers per restaurant per day,” Mehrotra elaborated.

The Department for Promotion of Industry and Internal Trade (DPIIT) officials met representatives from online food delivery firms and offline industry leaders last month and directed them to sit and solve their differences and boost equitable growth in the industry.

The meeting was called to discuss issues such as deep discounting and opening up of private label brands by the online food platforms that has affected the operations of offline restaurants across the country.

Source: NDTV Profit