Online Food Aggregators: The Rising Worries And Possible Solutions for Restaurants

If we talk about a few decades ago, we did not imagine, even in the wildest dreams, that hot meals would reach our doorsteps. This, too, with a tap on the screen? Well, here we are in 2023. Here, online food ordering/delivery has become part and parcel of our lives. The new generation includes Millennials and Gen Zs. They are obsessed with the process of ordering food online. We can only expect the enthusiasm to increase in the near future. Multiple concerns plague Indian food delivery aggregators. It is despite the tremendous potential and growth. What are they? Let us find out!

Online food delivery enables individuals to order and receive food products. This includes cooked meals at their doorsteps. The process encompasses browsing the website or application. It also includes selecting from an assortment of food items or cuisines available. It also includes making the payment via various gateways. Post-order completion, the website or application updates the user. They will get information about the food’s estimated time of arrival. Such features characterize most of the online food delivery platforms functional in India.

Currently, the Indian food delivery market is inflating at an unprecedented rate. It is one of the world’s most popular, fastest-growing markets of recent times. The valuation of the sector stands at USD 3.6 billion. We expected it to expand at a CAGR of 28.5 percent in 2023-2028. Thus, we expect the industry to touch the USD 715.53 million threshold by 2026. But several challenges, such as lack of transparency, are preventing the sector. They can’t reach their full-fledged potential.

There is a rise in online meal delivery services. The way people interact with foods and restaurants and vice versa has transformed. Nevertheless, the newfound changes have also ushered in some unforeseen challenges. This is for restaurants, which might be difficult to overcome.

1. Conspicuous and Increasing Commission Rates

Several of India’s major online delivery aggregators have recently been criticized. It is for dramatically raising their commission fees. For example, a restaurant has to pay as high as 20 to 25 percent of its revenue to food aggregators. It is a commission for the services availed from them. Restaurant owners have highly criticized such an increase. They proclaim that the increase in rates is impeding their business operations.

There was a rising commission rate from food aggregators. However, on the contrary, food aggregators are justifying the increase in commission rates. They claimed it was a ‘necessary evil’ to cover their expenses. As a result, restaurants are compelled to raise the prices of their online menus. This was adversely affecting the end customers’ order choices.

2. Delivery Deterrants

The number of complaints has been piling up. It is from customers regarding delivery issues from online food aggregators. The proportion of complaints about late or missing deliveries. The substandard quality of meals has become commonplace in India. Thus, the general consumer is left frustrated and angered. A recent survey has revealed that 2 out of 5 consumers are unhappy. They were not happy with the way food aggregators handled grievance redressal. It is regarding the subpar quality of food.

Similarly, 39 percent of consumers also have an opinion. They state that food aggregator apps are unwilling to offer refunds. They don’t even offer replacements in case of substandard food quality. Overall, customer unhappiness has an adverse effect on the aggregators. It reflects poorly on the restaurant. The culmination is that restaurants might find it difficult to shrug off such a ‘bad rep’ and move ahead.

3. Unstable Order Prices

There is another issue that restaurants are finding difficult to overcome. It is about erratic order prices. The online meal delivery domain of India is in an inconsistent. Wherein the prices fluctuate continually. Therefore, consumers cannot gauge how much they should pay for their food. As per a recent survey, 70 percent of consumers consider ‘high fees and surcharges.’

They are among the top concerns with food aggregator apps. Thus, the outcome is an air of distrust and confusion from the consumers’ end.

4. Customer Transparency

There is a major issue that restaurants are facing. It is while collaborating with online food delivery services is accessing customer data. Customers research for and order from restaurants directly on food aggregator sites. All the customer data remains with them, obscured from restaurants. Hence, in other words, restaurants do not have access to order-related information. They cannot co-opt it to their advantage.

The ‘masked data’ phenomenon has created a void. Restaurants are unable to gauge who their most loyal cohort is. They can’t find who has left a negative review. Due to no customer data access, restaurateurs are confused about customer preferences. This is adversely affecting their ability to understand consumer behavior better. Ultimately, personalized marketing and customer retention become murky territory for restaurants. It is irrespective of all scales and types.

Are you a novice restaurateur or a veteran in the field? A grasp on how to deal with the challenges created by online food aggregators in India can be beneficial. Some of the simple tricks and tips to get over the hurdles are –

1. Devise Your Food Delivery Application

There has been an increasing concern over food aggregator services’ feasibility. So, multiple restaurants are taking matters into their own hands. They are doing so by devising their own food delivery application. Restaurants face various challenges from third-party platforms: increasing commission, masked customer data, and more. It is compelling restaurants to reduce their dependency on third-party aggregators. They are like Swiggy and Zomato. They should invest in personalized meal order applications. Such a strategy will provide complete control over price setting. Restaurants can also control delivery charges, customer data, and more.

2. Open Network for Digital Commerce (ONDC)

Indian authorities have recently introduced the ONDC or Open Network for Digital Commerce. It is to expand access to the country’s booming electronic commerce (e-commerce) market. Restaurants must join come together and join the ONDC. This can help reduce the rising commission rates and strict customer data policies. These are the ones established by the bigwig food aggregators,

3. Vocal for Local

Restaurants can tackle the challenges created by the online food aggregator domain. They can do so by going local. The local marketplace offers a flexible and accommodative business opportunity. It has comparatively lesser commission rates. Local cafes and restaurants are struggling to stay afloat. It will also benefit from such a strategy.