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Zomato in the soup as battle with restaurants over deep discounts intensifies

The entire issue came to the forefront when restaurants across major Indian cities started the #logout campaign to protest the deep- discounting that some platforms were providing users

Rukmini Rao        Last Updated: August 22, 2019  | 20:52 IST
Zomato in the soup as battle with restaurants over deep discounts intensifies

The fight over food is getting ugly. Days after National Restaurant Association of India met food aggregators, Deepinder Goyal, Co-Founder & CEO of Zomato took to Twitter to accuse NRAI president Rahul Singh -who is also the CEO & Founder of 'The Beer Cafe' - of sabotaging the NRAI platform. Deepinder accused Rahul of doling out discounts at his restaurant similar to 'Zomato Gold.'

"This proves Rahul Singh is not really against deep discounts as these discounts are being offered on his own brand on his own app," he said. Further he also wrote that an aggregator's most important job is to create a level playing field and the issue now was large restaurants v/s small restaurants and aggregators were being portrayed as bullies. He accused Rahul of driving the #logout campaign along with some big restaurants owners and using NRAI to sabotage aggregators and derive benefits for their own businesses.

Singh on the other hand said "I thank Deepinder personally to make our brand viral. Am sending him a virtual beer through our app". He explained that as India's largest Beer chain spread across 13 cities, that loyalty program was earned versus what can be purchased. The "BeerOcrat", was a privilege program for a select few customers which has been enabled based on loyalty life cycle of guests. He said in a statement "Our in-house program has been up since 2014 and has 3.5 lakh downloads, when Zomato was probably a directory app. As a brand owner we have the right to provide privileges to our loyalists. Brokers cannot enjoy the same right as owners!"

Following the meeting in Delhi, Zomato informed its partners that it would bring some changes starting September 15. These changes would include limiting the gold usage of a user to one per day bringing the net effective discount significantly. It would also restrict the number of unlocks of gold to a maximum of two per table and restrict login sharing. While restaurants are continuing to be #loggedout, Deepinder tweeted "Zomato is logging out of the logout campaign. We have said enough and we are getting back to work. I am confident better business sense will prevail at the end".

The entire issue came to the forefront when restaurants across major Indian cities started the #logout campaign to protest the deep- discounting that some platforms were providing users. Restaurants felt that deep- discounting was hurting the core value proposition of restaurants and undermining its value. Close to 2,000 restaurants across Delhi NCR, Bengaluru, Mumbai, Kolkata decided to opt out of apps such as Zomato, Easydiner, Dineout, GourmetPassport and Magicpin which provide discounts, offers and coupons.

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