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Zomato and Swiggy start restaurant dine-in pilots in Hyderabad, but eateries are jittery

Called Zomato Pay and Swiggy Diners, respectively, the new dine-in programmes are offering flat discounts of as much as 25 percent in a bid to lure consumers

July 25, 2022 / 02:33 PM IST
Representative Image

Representative Image

Ahead of the festive season when footfalls at eateries and malls are expected to rise, restaurant aggregator and food delivery companies Zomato and Swiggy have started pilot dine-in projects in Hyderabad, offering discounts of as much as 25 percent to customers who pay their food bills through their apps.

The discounts may be substantially higher than 25 percent, depending on the restaurant, the loyalty benefits earned by a customer, the frequency of use, cashbacks and banking or fintech partnerships.

However, restaurants are wary of signing up for the customer loyalty programmes because they will have to bear the discounts.

“Both the platforms have been reaching out to restaurants since June to join their pilots. They are routing the customer payments in dine-ins through their apps and taking a cut from the amount paid,” said a restaurant owner in Hyderabad.

Zomato and Swiggy are also looking to onboard restaurants to their dine-in pilots in other cities, according to people aware of their plans. As the pandemic recedes, the food delivery companies are trying to enhance their restaurant customer loyalty programmes and expand business.

Dine-in ingredients

Zomato’s arch-rival Swiggy stepped up efforts to capitalise on restaurant dine-ins following its acquisition of Dineout, a dining-out and restaurant tech platform with over 50,000 restaurant partners, in May. Swiggy said it plans to leverage Dineout’s offerings, including table reservations and events, and enable restaurant partners to reach more customers and expand their business.

“As discussed, Dineout has been acquired by Swiggy and we are under a process (of) migrating all our clients from the Dineout to Swiggy platform,” a Swiggy representative said in a text message sent to a restaurant owner in Mumbai recently, which Moneycontrol has reviewed.

The SoftBank-backed company has named its dine-out programme Swiggy Diners.

“There are plans to integrate Dineout with the Swiggy One membership to tie in everything from food ordering and restaurant dine-in to grocery deliveries,” said a person aware of the developments.

According to the message sent to the Mumbai restaurant owner, the commission charged by Swiggy would be 8 percent, the same as before. The initial discount would be reduced to 10 percent from the current 15 percent, but additional discounts of 5 percent will be awarded to customers in a staggered manner for every incremental three visits.


Zomato may ask for an initial commission of 12 percent, although the number has not been locked in yet as it is negotiating deals on a restaurant-to-restaurant basis, the people said.

Zomato and Swiggy did not respond to Moneycontrol’s queries on the matter till the time of publishing.

Zomato’s dine-in pilot, named Zomato Pay, includes a feature called Vibes, which partner restaurants can use to upload pictures and information to showcase the interiors and mood at their food outlet to customers. These restaurant ‘vibes’ are visible on the landing page of the Zomato app.

Users who opt to pay for dining in through the Zomato Pay feature on the app, can avail of a discount of up to 25 percent on the bill. After the payment goes through, Zomato offers a 100 percent cashback to the customer.

When Moneycontrol tried to use the feature, the prompt on the Zomato app said: “Cashbacks will get credited immediately as Zomato Credits. These credits can be used for future dining bills or food delivery.”

The credits are valid for 90 days from the date of payment.

Double whammy?

However, not all restaurants are warming up to the idea.

“First of all, we did not like the terms that they came up with. After that, we were firm to say that we can’t bear both Zomato Pro Plus and Zomato Pay discounts at the same time,” said Shankar Krishnamurthy, a veteran food industry executive who runs multiple restaurants in Hyderabad.

According to Zomato, subscribers of its loyalty programme Pro Plus can avail of a combined discount on using the new pay feature.

“Zomato told us that restaurant footfalls will increase because of the new programme. But in my case, footfalls have actually decreased more than 40 percent in the first week of signing up to the pilot,” said Krishnamurthy.

Moneycontrol reported earlier that after pausing new subscriptions to Pro Plus in May, Zomato was trying to spice up its loyalty programme to make it more dine-in focussed.

“The Pro Plus membership plan was very food delivery focussed. With the fear of subsequent Covid lockdowns out of the way, the plan is to make it more dine-in friendly,” a person aware of the developments told Moneycontrol last week.

Once launched, the new programme will be Zomato’s fourth iteration of its loyalty programme. Before launching Pro Plus last year, Zomato had started Pro in 2020, which replaced the original Zomato Gold membership programme. While Gold was focussed on discounts for dining in at restaurants, Pro came with benefits such as priority deliveries and discounts on food orders.

In 2019, the Gurugram-based company paused its Infinity Dining programme after it faced flak from restaurants across India.

Deepsekhar Choudhury Deepsekhar covers tech and startups at Moneycontrol. Tweets at @deepsekharc
first published: Jul 25, 2022 12:54 pm