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As the voice of the Indian restaurant industry, we represent the interests of 500000+ restaurants & an industry valued @ USD 4 billion. Whether a chain or independent restaurant, the NRAI is here to help every step of the way. Join us!


Why are restauranteurs advocating for direct delivery?



The concept of home delivery or direct delivery by a brand has existed long before aggregators were even a thought. It has always been a natural extension for neighbourhood restaurants that catered to loyal patrons. No one had to resort to deep discounting or pay usurious delivery charges or commissions to perform this service for customers.

A few years ago, VC and PE backed aggregators popped up and ushered in an opportunity for restaurants to reach more customers and outsource the delivery function. In the early days, sense prevailed and the relationship between aggregators and restaurants was one of equal partners. Today the relationship has taken on a dictatorial tone often defined by one-sided policies and sky high commissions. Swiggy and Zomato are known to charge restaurants between 25% and 35%, the highest rates in the world. Despite that, they have no clear path to profitability and have begun charging customers for delivery as well.

In addition to draconian policies and extortionate commissions, aggregators withhold customer details with the restaurants, to whom this data rightly belongs. Aggregators have attempted to use this data to launch their own delivery brands, and those experiments failed pretty miserably.
Customer data allows us to understand what people are ordering, where they are ordering from and at what price point. Simply put, this data only allows us to get better at what we do for our customers. With our business moving online, data masking is an equally large issue.

When the middleman who knows nothing about the product begins to dictate terms, you know you’re in trouble. Thanks to a failure to understand the economics of the F&B industry, most aggregators have fallen by the wayside, and there are only 2 left. Their losses are staggering.

Even pre-pandemic, delivery-only outlets were one of the fastest-growing segments in the F&B space. Dining out is celebratory and experiential. Dining-in is about convenience. The delivery business has a lot of room to grow as customers are becoming increasingly accustomed to ordering in. With the onset of the pandemic, all restaurants have effectively become delivery-only kitchens and this has led to a surge in delivery volumes. Today, zomato and swiggy are finding it hard to cope with the demand which is resulting in poor customer experiences, delayed delivery times, rider shortages and mishandling of the products.

The F&B industry has spent the last year enhancing our direct delivery platforms by incorporating tech-enabled solutions. At this point, we are encouraging existing and new customers to order from us directly, not only for a better delivery experience but to support the industry as well. It has become a question of survival as no food business on the planet can afford to pay up to 35% to these digital landlords.

Since we have started promoting direct ordering from our websites, it has actually helped us
with customer satisfaction. There are no hidden charges when the order is placed directly on the restaurant’s website, which has encouraged sales. The food is being handled with care and diligence, hence complaints about damaged food have gone to 0. Moreover, we have complete control over hygiene and safety when we handle end-to-end operations.

As an industry, we’re encouraging customers to get back to ordering directly from restaurants. It is not an easy battle as the aggregators have burnt billions to create their marketplace. But for longer-term sustainability, all restaurants will need to reduce their dependence on aggregators. We are effectively asking our customers to make a little bit of an effort to order directly from us. This guarantees a certain level of service. Customer experience isn’t just good food. It’s how your food is packaged, how it’s handled and how it’s delivered. I would rather give my customer a direct discount than part with these astronomical commissions.

So next time you Order Direct, you aren’t just helping restaurants, you are also opening yourself to a better customer experience.

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