It has been around 2 months since many hotels and restaurants have started their protest against food aggregators like Zomato against the heavy offers and discounts provided by these platforms.
The protest is getting stronger as food and restaurant associations said that they all come together to fight against the policies applied by these online platforms.
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How Did This Happen?
The National Restaurant Association of India (NRAI) started the #Logout movement against food service aggregators like Zomato India in August 2019.
Initially, 300 restaurants logged out of Zomato’s membership-driven Gold on dine-in program. Then slowly the movement is becoming stronger by getting more support by many hoteliers.
Now, this movement is also backed up by the food and restaurant associations.
In the last two months, Zomato has also made many changes to its Gold on dining-in program. Which was not fully supported by the NRAI.
Federation of Hotel and Restaurant Association of India (FHRAI) vice president Gurbaxish Singh Kohli said “Over 7.3 million people are employed by the food and restaurant industry and the discounting offered by these aggregators is resulting in closing down of business and job loss,”.
Who Are Supporting Them Now?
The FHRAI has also extended his support for the #Logout movement initiated by NRAI. The FHRAI compromises HRANI, HRAWI, SIHRA and HRAEI which is the apex body of the Hotel Industry in India.
Not only FHRAI but many others like AHAR, Thane Hotel Association, Pune Restaurants and Hotel Association, NHRA, Vadodara Food Entrepreneurs have also joined the #Logout movement.
Kohli said ”We recognise the need for a peaceful co-existence of the hotel and restaurant industry with e-commerce aggregators, but is also very clear that the terms of engagement between the two sides have to be equal at all times, that no one can usurp the role of the other, and aggregators cannot dominate the industry or conduct its business in a manner that is detrimental or negatively impacts the industry’s growth or profits,”.
Why Did This Happen?
He also informed that all other Food aggregator had accepted to the industry demands except for Zomato.
While giving more information about the situation he said that normally restaurants make 15-16% of profit but with Zomato’s 50% is not at all acceptable by the industry.
He said “It is clear that these aggregators, who are heavily funded by private equity funds, have to recognize that their role is that of a ‘market-place or a service-provider’, akin to a travel agency or a discovery platform like Yellow Page of yore. Their role is to merely aggregate services of the industry. They do not represent the hotel and foodservice industry. Therefore, they cannot decide or dictate commercial terms on behalf of the industry,”.
What Zomato Has To Say?
In Spite of all the non-acceptance from NRAI, Zomato has rolled out its Gold program on delivery.
The company informed that they have already signed up 10,000 restaurants which are ready to offer complimentary deals on in-home delivery.
Zomato said that the Logout protest had limited impact on business as the number of restaurants on its Gold (on delivery) platform stood at 6,300. The number was at 6,100 when the protest had started. In addition to that, they have 10,000 restaurants that are participating in recently launched Zomato Gold for delivery (more on how successful this has been in a few weeks).
What To Happen Next?
In the next few days, more hotels and restaurant chains are supposed to log out from Zomato’s Gold dine-in program as it was the reason for conflict between restaurants and food aggregators.
As per the reports from NRAI, more than 3,000 restaurants have logged out form Zomato Gold.3,000 restaurants till now.