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Food aggregators in battle for ‘exclusivity’ listing


Special discounts, freebies, packaging & aggressive deals characterize the new battle lines for the restaurateur’s loyalty.

For asset-light food aggregators that do not own any stores or inventory, market supply – namely, popular restaurants – are their bread and butter. For customers looking for something to eat, a wider variety of options are favoured; whereas for those who already have a restaurant in mind, whichever portal has the eatery of choice listed would win.

Seeing this, a war is being waged to lure restaurants to list on their platforms. TinyOwl, which raised INR 100 crore earlier this year, has waived commissions for select restaurants, while Zomato is waiving commissions to restaurants that pledge to list only exclusively on its platform, according to merchants.

Meanwhile, TinyOwl and Swiggy are investing substantial funds and energy into mass marketing efforts, both online and offline, and are providing branded packaging for their orders, which are sometimes even used on their competitors’ items, either by accident or by design.

TinyOwl & Zomato are waiving commissions in exchange for listing exclusively on their platforms.

Their efforts seem to be working for quick-service restaurants, internet-based kitchens, and momand-pop eateries alike. “Such tie-ups are beneficial for brands like ours because portals like these help in reaching a larger customer base,” said Venkatesh Iyer, co-founder, Goli Vada Pav, which is currently in talks with various food aggregators. “Their marketing efforts too result in good visibility for the restaurants and QSRs listed on the portal.”

“It’s an interesting, cost-effective way of marketing and reaching out to a larger audience than restaurants would have, especially for smaller restaurants without large marketing budgets,” said Samir Kuckreja, founder & CEO of hospitality consulting firm Tasanaya and former president of the National Restaurant Association of India (NRAI), adding that most restaurants continue to do their own delivery and marketing efforts.

Zomato, which made ordering available in April, charges 7.5-15% commission to restaurants, which is currently waived for three months if restaurants promise to list only on Zomato for a year. Ordering is now live for 12,000 restaurants in 14 cities.

“(Restaurant partners) have benefited a lot from Zomato over the years through our powerful discovery platform and our ad products. Now with online ordering already launched, its initial success is also driving strong word-of-mouth effect for us and getting us newer partners on board quickly,” said Tanmay Saksena, Zomato’s head of online ordering.

Yet Swiggy – which charges 15-20% commission to merchants plus a delivery fee in specific geographies – is not worried about these cost-slashing strategies, having already signed up over 1,000 merchants in less than a year. “We haven’t seen a big hit because the end service matters more than commission,” said co-founder Nandan Reddy, whose company raised INR 105 crore, two months ago.

Zomato has a ‘first three months free’ offer while Swiggy’s offer of customized packaging has helped it sign up 1,000+ merchants.

“The industry is evolving and restaurants are becoming comfortable with the commission part due to the contribution in the business. The number of restaurants with commission has grown six-fold and now have become significant part of our business,” said Harshvardhan Mandad, co-founder, TinyOwl.

Ashwin Chandrasekaran, co-founder of Bengaluru-based breakfast delivery startup Brekkie, agrees. “Discounts don’t really matter – it’s a short-term thing. The packaging needs to be handled just as well as our delivery guys do and that the delivery is just as prompt,” he said. And at the end of the day, “volumes are important, we’re more inclined to work with platforms that can enable a larger audience,” he said.

Source: Economic Times

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