Following a directive from the National Restaurant Association of India recommending members to do so, up to 900 establishments have exited Swiggy's Dineout platform.
According to reports, famous restaurant chains like Social, Smokehouse Deli, Mamagoto, and Indigo have left Swiggy and other restaurant discovery platforms due to worries over excessive discounting.
A representative for Swiggy stated that Swiggy Dineout collaborates with more than 15,000 restaurants in more than 20 locations and engages with them regularly to develop its services and make this partnership profitable for both parties.
The chains of restaurants, primarily those in the informal dining market, claim that Dineout's steep discounts and cashback on in-restaurant eating services further affect the already struggling restaurant industry.
Most of these companies are members of India's National Restaurant Association (NRAI).
"We don't know what issue the business is trying to address right now. The objective of offering discounts must be clear. "Once they have finished, they start hunting for bargains on these platforms to receive discounts," said Riyaaz Amlani, CEO of L Catterton Asia-backed Impresario. "Consumers are aware of our restaurants already and appreciate the dining experience."
Amlani added that Zomato Pay's platform, which enables users to look for discounts on dining out, does not include Impresario.
Due to COVID-related restrictions and increased expenses brought on by food inflation, the restaurant business has been experiencing difficulties for more than a year.
The action was taken a month after the industry association, NRAI, warned its partner members about Swiggy and Zomato's promotions on dine-out orders.
The restaurant industry group had stated in a statement published in September that these programmes might eventually have an influence on the entire restaurant ecosystem. According to NRAI, "Both Zomato and Swiggy have built a payment gateway — Zomato Pay and Swiggy Dineout — which actively encourages our customers to use their payment gateways by discounting, offering 100% cash backs, and bank offers, and urge partner restaurants to adopt this payment gateway under the unsubstantiated promise of more footfalls."
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