The spat between restaurant aggregator Zomato and the National Restaurant Association of India (NRAI) took an ugly turn on August 22 when Zomato's founder, Deepinder Goyal, accused NRAI's president, Rahul Singh. of promoting deep discounting at his own restaurant while advocating others to stay away from Zomato Gold.
Goyal posted a screen shot of the app of Beer Cafe, a chain of beer bars owned by Singh offering 1+1 on food or drinks under a program called Gold, an exclusive privilege. On the face of it, the offer looks very much like what Zomato offers to its customers through Zomato Gold.
Goyal posted a second screen grab which read, "Rahul Singh is not really against deep discounts, as these discounts are being offered on his own brand. This log out campaign as it seems now, is driven by Rahul Singh, along with the participation of a few large restaurant owners, to use the NRAI (National Restaurant Association of India) platform to sabotage aggregators and benefit themselves."
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Singh, on the other hand, came up with a quick response claiming that this offer by Beer Cafe is a privilege program for a select few which the company enables based on the loyalty life-cycle of its guests.
"Our in-house program has been up since 2014 and has 3.5 lakh downloads, when Zomato was probably a directory app. As a brand owner, we have the right to provide privileges to our loyalists," Singh told Moneycontrol.
Ealier this week, following a log out campaign by over 2,500 restaurants, Zomato decided to make changes to its Gold membership. The aim was to ensure that they took control of deal hunters and focussed on quality consumers.
To incentivise restaurants that logged out of Zomato Gold to come back to the platform, Zomato also said it will not charge any log in fee. This was in contrast to its previous stand wherein it had said that restaurants coming back will have to pay up around Rs 75,000 for signing up after logging out of Gold.
In order to maintain a barrier to entry, Zomato said it will ensure that Gold is not sold below Rs 1,800 for an annual subscription. It also cancelled its trial packs.
To put a curb on deal hunting, Zomato also decided to limit the usage of Gold to a single user, and once a day. It said it will also limit its usage upto two Zomato Gold for every table at a restaurant.
Besides this, in order to promote the restaurants, Zomato has decided to give ad credits to the owners. So for a minimum of 1,000 Gold unlocks per quarter per outlet, and average cumulative rating of 4.5+, restaurants will get ad credits worth Rs 25,000 per outlet every quarter.
However this didn't go down well with NRAI, which accused Zomato of making cosmetic changes. Their demand was to ensure that Gold was stopped completely.
"Reconstruct of Gold is another attempt to stuff old wine in a new bottle. It’s a tweak in the drug, which doesn’t solve the addiction," said the statement from NRAI.
"Since the launch in Nov 2017, this program has been shifting goalposts. What started as an exclusive invite-only privilege to a marketplace for "bargain hunters", a word admitted by the founder of Zomato in recent tweets, this Gold has lost its sheen forever. We stand united in the cause to obliviate the deep discounting phenomenon, and will therefore #stayloggedout," it added.