Over the years, aggregators and food delivery apps have been launching many discounting schemes to draw customers. This has resulted in a continuous dispute between restaurants and food aggregators for many months.
After facing flak from restaurant partners over deep discounting, Zomato has rolled back ‘Infinity Dining‘ plan from Gold membership. The increasing complaints of restaurants prompted the company to do so.
Zomato had introduced infinity dining plan for its gold membership subscribers in partnership with 350 restaurants only 50 days ago. The plan allowed the Gold members to order unlimited meals at restaurants for a fixed price.
Gold subscription along with exorbitant commission have been reasons for a nationwide protest by restaurant partners against Zomato. National Restaurant Association of India (NRAI) and the Gurugram-based firm are up in arms for over several months.
The representing body alleged that restaurants are suffering because of shrinking margins triggered by unjust practices exercised by Zomato and other table reservation apps.
Not surprised by Infinity Dining’s roll back, NRAI’s president Rahul Singh said that ‘it had to.’
Last month, NRAI and several restaurant partners had come together in the #logout movement against Zomato, who, according to them, distorted a vibrant marketplace by aggressive discounting and predatory pricing.
More than hundreds of partner restaurants had pulled out from offering complimentary meals and drinks at that time. To fix the issue, Zomato had in a letter asked its Gold partner restaurants to serve 45 days notice before discontinuing service.
Withdrawal of Infinity Dining has come a day after Info Edge’s market value reduced by Rs 2,600 crore. Some media reports suggest that lay off of over 600 employees across two tranches had eroded Info Edge’s market cap.
At present, Info Edge owns 26.38% stakes in Zomato.
Exclusion of Infinity Dining will impact the existing subscribers who have been using it every now and then. Many users are irked as they would be deprived of leverage getting fixed deals on unlimited food and drinks.
The rollback of the feature from Gold also emphasises another bow down by Zomato to restaurant demands. This is the third major product/feature withdrew by the Alipay-backed firm in the past 10 months.
In November last year, it closed Zomato Treats along with putting a pause on online ordering reward programme PiggyBank in July this year.
The development was reported by ET first.