450 city hotels log out of Zomato Gold
We (hoteliers) are incurring huge losses. Zomato is getting 15-18 per cent commission from us. We are giving 50 per cent discount to customers. We have also paid Rs 75,000 as registration and other charges to Zomato Gold. They have our customer database and divert them to other smaller restaurants.
— Ganesh Shetty, President of Pune Restaurant and Hoteliers’ Association (Praha)
Pune/Mumbai: On Friday, around 450 restaurants from Pune logged out of Zomato Gold, a premium membership programme introduced by Zomato.com in November 2017.
Pune isn’t the only city, even in Mumbai, Delhi and Gurugram, several restaurants have followed suit, calling it #Logout because “few aggregators have made deep discounting a norm and most restaurants fell prey to it because of the fear of missing out and losing consumers.”
Zomato.com is one of the largest and most popular food directory and delivery service in 83 cities in India in addition to 24 countries.
The announcement came via a statement from Pune Restaurant and Hoteliers’ Association (PRHA).
Around 1,000 fine-dinning restaurants from the city are listed with Zomato Gold.
“For the first time in a nationwide movement, hundreds of restaurants have come together to put a stop to this bullying. It’s not permanent and very soon discounting will come back to your favorite restaurants but in a way that supports our businesses and consumer interests equally, ” the statement further read.
When Sakal Times got in touch with Ganesh Shetty, President of PRHA, he said that around 450 restaurants have ‘logged out’.
“By Sunday, another 400 will join the list. The reason we have decided to log out is because what they (Zomato) had promised us while getting us listed to their app is different from the deal they promised Zomato Gold Members (customers),” he said.
“They had said that customers will get two plus two free on both drink and dine but they have misguided us and that’s not being followed. The other offer was whichever was higher bill either food or drinks, we will give 50 discount on that. But now Zomato is insisting that we have to give 50 per cent discount on food or drinks,” he explained.
Shetty said that because of these false promises, they have arguments with the customers daily at their restaurants.
Ashwin Shetty, owner, Mr. Rabbit’s Bar & Burrow in Baner, said that many restaurants had even suggested that Zomato Gold should reimburse them some amount of the discount they are offering so that it’s feasible to run the buisness.
“Zomato charges their members a certain fees, but they did not do anything like that. Zomato does not even guarantee regular customers because their members only go to restaurants that offer good deals. It’s better to invest the same amount on our regular customers,” Shetty said.
Brijesh Pande, CEO, D51 - Bar and Kitchen, Mumbai, said, “We are supporting the protest and opted out from all the offers and discounts that food aggregators are offering. The #Logout is the need of the hour and I am glad that NRAI has taken it seriously. Many food aggregators are giving away huge discounts to the patrons at their wish, which in turn are impacting our business negatively. Through heavy discounts, food aggregators are getting restaurants on board, and inspiring more standalone, portraying that the footfall will increase,” he said.
He explained that with Zomato Gold, Zomato.com takes a monthly or yearly fee from the customers and allows them a database of 4,000 plus restaurants in Mumbai itself at their disposal and restaurants here, end up discounting their product.
The National Restaurants Association of India (NRAI) had earlier said that 300 restaurants from Mumbai alone had logged out from the mobile applications of food aggregators. The majority share (of profit) is taken by deep discounting and aggregators and once we emerge from this, we would be able to utilise the same funds towards better products, services, and experience, the statement said.
Zomato reacts, urges restaurant industry to hold dialogue
Reacting to the situation, Deepinder Goyal, Founder & CEO, Zomato.com, tweeted, “Zomato 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.”
“We are committed to work with the industry and make modifications to Zomato Gold, which will result in a win win situation for restaurants and consumers. Just like last year, when we changed some rules around Gold after hearing about the concerns of the restaurant community. In the interest of consumers, we request restaurant owners, to stop the logout campaign, and have a collaborative discussion with internet aggregators for finding a sustainable way forward.”
Our objective here is to drive the growth of the restaurant industry. The average price of a delivery order in India is same as that of China.