Why your nearby restaurant has a sweet-sour relationship with Zomato/Swiggy?
A mini Thread 🧵👇
A mini Thread 🧵👇
1/ Aggregator Economics
Aggregators are cash-guzzling businesses
Although the restaurant volumes go up, increasingly these companies are getting stricter with respect to their cash flows leaving no cut for the restaurant owners
With the listing, this will continue to grow.
Aggregators are cash-guzzling businesses
Although the restaurant volumes go up, increasingly these companies are getting stricter with respect to their cash flows leaving no cut for the restaurant owners
With the listing, this will continue to grow.
2/ Customer Data Masking
Aggregators don't share any user data with the owners leaving them clueless about their customer base, their demographics & trends.
Owners feel that they are losing their brand value & their food is getting commoditized.
Aggregators don't share any user data with the owners leaving them clueless about their customer base, their demographics & trends.
Owners feel that they are losing their brand value & their food is getting commoditized.
3/ Deep Discounting
Discounts b/w 30-70% distort the market completely, due to which the market is unable to grow profitably. A lot of restaurants continue to suffer due to the policies of the aggregators.
Restaurant associations of 🇮🇳 are at major loggerheads with aggregators.
Discounts b/w 30-70% distort the market completely, due to which the market is unable to grow profitably. A lot of restaurants continue to suffer due to the policies of the aggregators.
Restaurant associations of 🇮🇳 are at major loggerheads with aggregators.
4/ High & Uneven charges
20-35% commission charges compared to 10-15% across the world.
After all the costs, the avg restaurant makes 3-5% margins when getting food delivered: it's dilutive of ROCE, so why should they continue?
20-35% commission charges compared to 10-15% across the world.
After all the costs, the avg restaurant makes 3-5% margins when getting food delivered: it's dilutive of ROCE, so why should they continue?
5/ Search Algorithms
The parameters used for ranking & listing a restaurant on the partner app are inconsistent.
Most often than not, visibility determines success. Top 10-20% gets most of the orders.
Rankings & ratings are confusing.
The parameters used for ranking & listing a restaurant on the partner app are inconsistent.
Most often than not, visibility determines success. Top 10-20% gets most of the orders.
Rankings & ratings are confusing.
6/ Private Labeling (cloud kitchens)
Aggregators are building their own kitchens & inviting owners to partner with exclusivity.
Their own brands will trump the position in their platforms creating an unfair environment.
Aggregators are building their own kitchens & inviting owners to partner with exclusivity.
Their own brands will trump the position in their platforms creating an unfair environment.
7/ With only 3 players remaining (Zomato, Swiggy & Amazon), the worry for restaurant owners has just begun.
Note: Given the poor population of India, they can't pass on the whole cost to the consumers without disrupting the volumes.
Note: Given the poor population of India, they can't pass on the whole cost to the consumers without disrupting the volumes.
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