Nearly a week after thousands of restaurants went up against FoodTech apps such as Zomato, Dineout, EazyDiner, and the likes, there has been a dialogue between both parties to address issues being faced by restaurants. The National Restaurant Association of India (NRAI) – which led the Logout campaign – has said that these apps have agreed to rejig their features to move away from deep discounting.
“It was decided that all aggregators will rejig their features which will allow the restaurant-customer ecosystem to detox from addiction of deep-discounts that has crippled the industry,” Rahul Singh, president of NRAI said.
The association said in a statement that in extensive meetings held with all restaurant aggregators over Monday and Tuesday, it learnt that they were promoting deep discounts to stay competitive amongst each other.
“While one aggregator gave 1+1, the other had to adopt a 50% discount scheme in order to stay relevant. And what hurts the most is, that these deep discounts are funded by restaurant industry and not the aggregators. Moreover, as opposed to general perception, restaurants do not get any share of the proceeds that aggregators generate from guests as subscription fees,” it said.
However, it is not known yet what changes will be made to these food apps and by when they will be rolled out. However, Rahul told TNM that the Logout campaign will continue till they hear back on the feature changes done by these apps.
Ankit Mehrortra, Co-founder and CEO of Dineout said that in the ‘insightful’ meeting it had with NRAI and restaurant owners, the major issue highlighted was of “deep discounting" practices.
“NRAI acknowledge our restaurant first approach. We are working closely with NRAI and our restaurant partners as a tech platform to enable sustainable growth of the restaurant industry in the long run,” Ankit added
While no specific details were shared on whether Dineout will make changes to its existing features, it reiterated that Dineout believes in sustainable discounting, adding that it customises its offerings for restaurants, allowing them to select the discounts that they want based on day of the week and time of the day.
Zomato declined to comment on the discussions it had with NRAI and restaurant owners. However, as per a Ken report, it sent out a mail to all Gold partners asking them what their main pain point was and how Zomato could help solve it.
On August 27, Deepinder Goyal, founder and CEO of Zomato also tweeted admitting that it may have made mistakes and that this is a wakeup call that it needs to do 100x more for restaurant partners than before.
Meanwhile, Federation of Hotel & Restaurant Associations of India (FHRAI), which called upon the food apps for a dialogue, has chalked out an action plan to take up with concerned organisations and departments.
Among the top issues, the FHRAI has narrowed down six points to action which include consulting industry associations, profitability, unfair customer appeasement practices, deliberate policing, competing with each other and legal and taxation aspects.
“We believe that the role of industry associations has been deliberately kept limited, leading to a one-way communication, leaving no opportunity for the industry to have conflict management mechanism in place. With regards to the eroding profits, unlike e-commerce companies with continuous inflow of Foreign Direct Investment (FDI) and access to funds, restaurants don’t. A win-win situation is a need of the hour and any strategies adopted by the FSAs for their profits should directly benefit the restaurant industry too,” Gurbaxish Singh Kohli, Vice President, FHRAI said in a statement.
It has also sought inputs from its regional Associations including HRANI, HRAWI, HRAEI and SIHRA; as well as other affiliated Associations for coming up with a comprehensive report to sort out all matters related to the FSAs that are affecting the industry.