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Swiggy, Zomato decide to cut customer discounts soon



The major delivery players like Swiggy, Zomato and others are planning to whip the customer discounts in the coming year. The discounts, especially by Swiggy and Zomato will be down at least at 40%, as per the sources.

As per one of the top executives of Swiggy, customer discounts are likely to fall down this year as the food delivery industry merged with two big players.

Swiggy is also pushing to increase order density by building products and expanding its restaurant base to drive repeats from the top 50 million internet users, says Vivek Sunder, chief operating officer of Swiggy.

Sunder further added that the growth in 2019 will largely be driven by expanding restaurant selection and scaling up products, including loyalty programme Swiggy Super, subscription business SwiggyDaily, single-serve meals product Swiggy Pop, and student campus app Swiggy Launchpad.

Both the Swiggy and Zomato were sustaining a cash injury worth Rs 260 crores ($40 million) per month which could be a major reason for cutting down the customer discounts by 40%.

On the other hand, in Feb 2019, the national restaurant association of India (NRAI) demanded a code of conduct to be put in place for the online food aggregators.

The association held an internal meeting in Mumbai to decide on the course of action to be taken against food aggregators like Swiggy and Zomato which had dismantled market with deep discounts.

“We are happy with the marketplace model. They are bringing restaurants closer to the consumer but they cannot get into exclusives, arm-twisting, promoting their own brands, using their own (search) algorithms. We all have happy hours, end of season sale but not that everything is perpetually on a sale. You are influencing the market forces. You cannot have the entire month saying no cook December,” said Rahul Singh, president of NRAI.

Nevertheless, unlike Swiggy which is entirely logistics based work, Zomato’s business plan is focused on tapping food industry end to end.

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