Food Tech Aggregators - the likes of Zomato, Swiggy , Food Panda etc may have disrupted the market positively for customers but surely it has a huge negative impact on Merchants or Restaurant owners
Ideal Disruption would be something that improves the current eco system -- Win Win for both parties
Remember, the time when customers used to place the Orders for delivery, over phone. It had its challenges for sure. And aggregators have done a good job to overcome those challenges
However, its not a profitable proposition for Merchants to sell their products over such platforms. Discount & Price wars plus high platform service fees has reduced Gross Margins of Restaurants from 55% to as low as 25% in some cases. This is even worst for home delivery businesses that rely on these platforms for orders
Gross Margin in this context means the Actual Final Sale Price less Food production & packaging cost
With Such low Gross Margins, its getting really difficult for most Restaurant Owners to manage their overheads ; forget profit margins ! unless ofcourse, their maximum business comes from Dine In segment
Its a necessary evil -- that needs an immediate cure !
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