A well-known performance marketing manager named Rahul Kabra recently blasted the meal delivery service Zomato on his LinkedIn account. He said that he was demonstrating the fact that Zomato is out-earning the restaurant for each and every order.
In his article, he claimed that he was contrasting two identical orders from the same restaurant, one of which was placed online through Zomato and the other offline, straight from the eatery.
He said that ordering the lunch straight from the restaurant would have cost Rs. 512, while doing it through Zomato would have cost Rs. 690 after a Rs. 75 discount.
Accordingly, placing the identical order on Zomato would cost him 34.76% more than doing so straight from the restaurant.
He then questioned if it was appropriate to charge such a high amount if Zomato were to serve as a platform that increased local eateries’ visibility and traffic.
He continues by saying that the Indian government has to impose and enforce some form of cap on these premiums so that everyone involved, including the shareholders, would benefit.
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Then, he predicts that as time passes, an increasing number of consumers will realise that the price of their food on Zomato is excessively exorbitant and will begin looking for reasonable alternatives or opt to place an order directly with the restaurant.
All workers struggle with customer acquisition as their businesses expand, which is also the bane of many businesses’ profitability. Customer retention is what raises the customer’s lifetime value.
One of the businesses that invented omnichannel advertising is Zomato. They take great pleasure in their customer service and rely heavily on it to keep clients.
However, the majority of Indians prioritise saving money above paying more, thus regardless of how effective the app’s marketing is or how well users are treated, customers will eventually go in search of better offers and rates.
Customers will be willing to pay a little bit more for their orders if they are using a platform like Zomato, but such an elastic increase will undoubtedly make many customers reluctant to use the app. Start-ups need to understand how crucial customer acquisition is because there will always be competitors who can undercut them.
Zomato later stated:
Zomato serves as a medium for communication between diners and restaurants; as such, it has no influence on the prices established by the network’s restaurant partners.
They continued by saying that they have informed the restaurant partner of the criticism and have asked them to look into the matter.