Why restaurants should get rid of aggregators like Swiggy, Ubereats and Zomato?

Sep 05, 2019

Why restaurants should get rid of aggregators like Swiggy, Ubereats and Zomato?
Restaurants logout moment from aggregators

We must be aware by now, breaking news in the past few days about the heated argument and the #Logout movement between the restaurateurs and food aggregators like Zomato, Swiggy, UberEats, etc. What will be the outcome of this logout movement? Who is it going to affect the most? Restaurants, customers or the food aggregators? Generally, these are the questions we get in our minds when we hear about it.

Before getting into who will be affected, let us get into the roads of what made the restaurateurs start their logout movement.

When the food aggregators entered into the food industry, restaurants and aggregators together agreed to spike the prices for dine-in than take away, to make the customers move towards online ordering and increase the visibility of restaurants. Customers started to note this difference and opted for online delivery for convenience and better prices. Sure the food aggregators helped the restaurants to gain visibility among the customers, especially the small and new restaurants entering into the food industry. 

With heavy competition around the market, discounts were not just the only factor the aggregators noticed. It was the delivery time too. Lesser the delivery time, more the customers likely to place the orders from the particular restaurant was their perception, which again became successful. This is another headache for the restaurants, who needed to prepare fresh food to the table in less than 10 minutes so the delivery could be made within 20minutes to the customers which are absurd.

Some restaurants even feel it pressurized the fear of missing out from the sales if they stop discounts. The restaurant owner realized the bottom line of their revenue hitting with the overlapping of offers and the quality of food decreasing with the pressure of delivery time.

It is true, during the initial stage, terms and conditions were favorable to the restaurant, which soon turned against them and the cost of customer acquisition was transferred to restaurant owners. To sustain in the market, to win over the competitors, and attract customers all the aggregators started increasing their discount offers. Unfortunately, these discounts were borne by the restaurants and not the aggregators. Suddenly, restaurants started to notice pitfalls in their revenue generated due to driven discounts given which were borne fully by the restaurants, not the aggregators.

Aggregators and commission percentage
Aggregators and commission percentage

Even getting the restaurants listed on the app, comes with a cost. The following table shows the list of commission aggregators charge the restaurant.

From all the above details, it is very clear, overall it is the restaurants who are affected the most. So now the question will be, how does this will affect the customer? Well, to start with it, being a customer, we are used to ordering online for the convenience of having food from the comfort of the place we want. But have you thought about what will happen next if the restaurants decide to quit and logout from the delivery apps? Customers who are accustomed to online ordering will be left only with fewer restaurant choices, whereas the demand will be more but the supply of food is very less. This, in turn, will increase the prices of the food items going up which will affect the customers who depend on the food delivery apps on a daily basis. Instead of ordering for around 100-200rs, the prices will go up, where the customers will be required to pay around 300-500rs. Once if the customers start going for traditional food delivery, the food aggregators will see a steep fall in their revenue.

To make this a win-win situation for all, one of the solutions would be to have favorable discounts which are agreeable to both the aggregators and the restaurants. Sure the customers addicted to discounts will still be affected. Restaurants are still likely to lose their customers, even if there are discounts and offers, yet the food quality is poor. Today, customers don't just look for discounts, but the right quantity of food with the right quality. Customers are likely to become loyal when the major aspect considered by the customer - taste and quality food is achieved.

If the solution is not favorable to both, the best choice restaurants have is to own and start their individual food delivery app without depending on any food aggregator. Having an individual food delivery app can hold your customers with your innovative game of giving discounts and own delivery staff. Food delivery software comes in the different price range and various options to customize the software as per your requirement. This will help restaurants not to lose their customers and still provide them online delivery but with their own convenient offer. Before the prices go up high with the food delivery software, buying the software which will best fit your restaurants will be a wise decision.

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Kiruthika Blogger

Kiruthika

Kiruthika is a Content writer and blogger at Pofi Technologies. Other than her interest in writing, she can be seen listening to songs, reading or traveling.