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Zomato, Swiggy try to build customer confidence but it's an uphill task

Some restaurants are back online but ban on food delivery in some places, supply constraints are bad for business.

April 20, 2020 / 05:06 PM IST

Contactless deliveries, sanitisers packed with meals and rating restaurants on hygiene, food delivery platforms are trying everything possible to win the confidence of customers as the coronavirus outbreak knocks the bottom out of their business.

But the viral outbreak is a huge challenge as a recent incident in Delhi proved. A pizza delivery boy tested positive for the virus and it sent 72 families in quarantine. The latest reports say 16 “high-risk contacts” have tested negative but it has dented confidence.

“Considering that we already have ‘contact-less delivery’, ‘merchant self-declaration’ in place - a ‘sanitiser sachet’ along with every order that gets delivered would enhance user experience as well,” said a message to the owner of a restaurant from a food-delivery service.

The delivery platform even offered to sell hand sanitizers that could be packaged along with the food, the owner, who didn’t wish to be identified, said.

The fear factor


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Both food delivery platforms and restaurants, which employ more than seven million people, have odds stacked against them as India enters Day 28 of the nationwide lockdown to break the chain of infections. The nature of their business, where human contact is hard to eliminate, and the highly contagious virus, which can spread from touching an infected surface, coughing, sneezing or droplets of saliva make for a bad combination.

Telangana has banned food delivery till May 7, only allowing groceries and vegetables to be home delivered. In Punjab, too, food deliveries have been stopped in some places. These bans are not only bad for restaurants and food-delivery services but also for those who cannot cook at home.

The massive cost of keeping the premises shut, along with a need to pay their staff, is seeing more restaurants come back online, at least for takeaways.

“More restaurants are opening slowly, they are trying to adopt safety precautions but these can never be fool-proof,” said an owner of a restaurant in New Delhi. “Also, the platforms rely on self-declaration from restaurant owners, there is no external audit for these.”

The National Restaurant Association of India, the industry body, could not give the exact count of restaurants that have started operating.

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Gurgaon-based Zomato said among the cities where it is operational more than 35% of the restaurants have come back online and the number is steadily increasing. Around 30 to 50 percent of its delivery fleet is also operational in these places.

Swiggy, which has a major presence in South India, did not respond to email queries from Moneycontrol. The Bengaluru-based company has been relying on blogs, messages and social media posts to instil confidence in consumers.

India’s food delivery startups have been in a bitter competition not just among themselves but with restaurants as well over predatory business practices.

The high burn business, characterised by deep discounts, left little room for profits.

But, the Indian market expected to be worth $12.53 billion by 2023, according to DataLabs by Inc42, held hopes for survival. In January, Zomato acquired UberEats in an all-stock deal, with Uber getting a 9.99 percent stake in the Indian startup. The coronavirus outbreak, however, has upended all such calculations. Now survival is the basic question.

While the industry is trying to get back, restaurateurs agree that enforcing strict safety guidelines for such a dispersed sector is not easy. International guidelines specify that kitchen staff needs to maintain distance, cutlery and utensils need to be regularly sanitized and chefs’ temperature needs to be checked to prevent sick people from entering the kitchen.

“Except for large organized restaurants, with strict standard operating procedures, these rules cannot be enforced by every restaurant owner. In small cramped kitchens how will social-distancing work,” said the Delhi-based restaurant owner.

It is not just the kitchen and staff, hygiene of the supply chain is also a problem. And to top it, the supply itself is erratic.

Swiggy and Zomato are trying to ensure the supply of raw material to restaurants through their grocery delivery arms, but the crisis is becoming more acute as the lockdown will at least continue for another two weeks.

Aggregators are now trying to utilise their delivery fleet for providing grocery and other supplies to consumers. Players like Domino’s and Eat Fit are also trying to keep their business going by supplying essentials but for restaurants and quick-service food joints, takeaways are erratic and resumption of dine-in services a distant dream.

As restaurateurs put it, even after all this ends, only a fraction of the outlets will manage to come back online, for a large number of them, coronavirus could well be the fatal blow.
Pratik Bhakta
first published: Apr 20, 2020 05:06 pm

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