Takeaway platform and catering merchants should be examples of win-win cooperation, but in recent years, they have shown a trend of "turning enemies into enemies".
There are more and more conflicts, but they are inseparable from each other. Who is the culprit behind the frequent conflicts?
Takeaway platform, catering merchants, and consumers formed an economic community due to the mobile Internet, and the three parties originally coexisted with mutual benefit.
However, in recent years, due to interests, the three parties are heading towards an embarrassing situation where they cannot benefit each other, especially merchants and platforms, and the contradiction between the two is becoming increasingly prominent.
Recently, a collective boycott of takeaway platforms broke out in India.
1. Indian restaurants collectively boycott takeaway platform
The scale of the Indian catering takeaway industry is about US$700 million, and the takeaway app was once a boon for Indian restaurants. However, a few days ago, some restaurant owners in southern India "have been "aligned" with catering takeaway platforms.
Some restaurants in Kerala, India announced that they will no longer accept orders from takeaway platforms such as Zomato, Swiggy, Uber Eats, Foodpanda, etc. from December 1. The Kerala Hotel and Restaurant Association (KHRA) has also decided to boycott the above-mentioned takeaway platform.
According to our understanding, Zomato, Swiggy, Uber Eats and Foodpanda are all takeaway delivery platforms with the highest penetration rate in India.
Zomato and Swiggy are the leaders, and both occupy a total of 80% of the market share. In 2017, Zomato's turnover reached US$47.03 million, and Swiggy's revenue also reached US$18.78 million.
Given that these platforms now have nearly 170 million users in India, restaurants are in a dilemma. To counter the catering takeaway platform, the Kerala Hotel and Restaurant Association is already considering launching its own takeaway app.
2. Is the unspoken rules for takeout the blame?
In fact, not only in India, but also in China, there have been many conflicts between catering merchants and takeaway platforms. Why are food delivery platforms and catering merchants that originally coexist and coexist? Why are they repeatedly rumored to be in harmony in recent years?
Industry insiders believe that the increasingly intense unscrupulous rules of takeaway are the main reasons for intensifying the contradictions.
What are the unspoken rules of the takeaway industry? We analyzed and summarized the following 4:
1, deductions are getting higher and higher, almost reaching the rent level
Indian Ceylon Bake House restaurant owner Suhaib V said that the takeaway platform's commission (deductions) for them is very high, Uber Eats and Swiggy will charge 33% commission, and Zomato will charge about 22%. Such a high commission cost them no profit at all.
In China, many catering merchants have also reported to us that the deduction points of takeaway platforms are getting higher and higher.
"Some platforms charge us a commission of 20% to 25% of the price of the dish. A 20 yuan takeaway service fee, event promotion fee and packaging fee will be basically cut in half. In addition to rent, water, electricity and labor, let alone profit, it would be good if it would not lose." Xiaozhuang, who runs a wooden barbecue fast food restaurant, said.
It is understood that the current deductions of points for catering merchants by major domestic takeaway platforms vary according to different cities and categories, but they are basically between 20% and 25%, accounting for about 15% to 20% of merchant costs, almost reaching the rent level.
From a realistic perspective, the deducting point-up has the greatest impact on small and medium-sized catering merchants. Large catering merchants have their own traffic entrances and fixed consumer groups, and have a certain voice in negotiations with takeaway platforms; while small and medium-sized catering merchants can only develop takeaway business through existing takeaway platforms, so the right to speak is in the hands of the platform and can only passively accept the relevant decisions of the platform.
2. There are more and more activities. If you lose money, don’t do business,
One of the major reasons why consumers use the takeaway platform is that the takeaway platform often holds activities, and ordering is more preferential than dine-in. In the early days, in order to gather users, takeaway platforms actively subsidize merchants and encourage them to participate in online discount activities, so that merchants can enjoy their benefits.
Nowadays, the strategy of spending money and subsidies for takeaway platforms is gradually drifting away, and the cost of online discount activities has also quietly shifted to merchants. There are many activities and few subsidies, and losing money if you do it or not, which is an embarrassing situation that most businesses face.
Takeaway platform and catering merchants should be examples of win-win cooperation, but in recent years, they have shown a trend of "turning enemies into enemies".
There are more and more conflicts, but they are inseparable from each other. Who is the culprit behind the frequent conflicts?
Takeaway platform, catering merchants, and consumers formed an economic community due to the mobile Internet, and the three parties originally coexisted with mutual benefit.
However, in recent years, due to interests, the three parties are heading towards an embarrassing situation where they cannot benefit each other, especially merchants and platforms, and the contradiction between the two is becoming increasingly prominent.
Recently, a collective boycott of takeaway platforms broke out in India.
1. Indian restaurants collectively boycott takeaway platform
The scale of the Indian catering takeaway industry is about US$700 million, and the takeaway app was once a boon for Indian restaurants. However, a few days ago, some restaurant owners in southern India "have been "aligned" with catering takeaway platforms.
Some restaurants in Kerala, India announced that they will no longer accept orders from takeaway platforms such as Zomato, Swiggy, Uber Eats, Foodpanda, etc. from December 1. The Kerala Hotel and Restaurant Association (KHRA) has also decided to boycott the above-mentioned takeaway platform.
According to our understanding, Zomato, Swiggy, Uber Eats and Foodpanda are all takeaway delivery platforms with the highest penetration rate in India.
Zomato and Swiggy are the leaders, and both occupy a total of 80% of the market share. In 2017, Zomato's turnover reached US$47.03 million, and Swiggy's revenue also reached US$18.78 million.
Given that these platforms now have nearly 170 million users in India, restaurants are in a dilemma. To counter the catering takeaway platform, the Kerala Hotel and Restaurant Association is already considering launching its own takeaway app.
2. Is the unspoken rules for takeout the blame?
In fact, not only in India, but also in China, there have been many conflicts between catering merchants and takeaway platforms. Why are food delivery platforms and catering merchants that originally coexist and coexist? Why are they repeatedly rumored to be in harmony in recent years?
Industry insiders believe that the increasingly intense unscrupulous rules of takeaway are the main reasons for intensifying the contradictions.
What are the unspoken rules of the takeaway industry? We analyzed and summarized the following 4:
1, deductions are getting higher and higher, almost reaching the rent level
Indian Ceylon Bake House restaurant owner Suhaib V said that the takeaway platform's commission (deductions) for them is very high, Uber Eats and Swiggy will charge 33% commission, and Zomato will charge about 22%. Such a high commission cost them no profit at all.
In China, many catering merchants have also reported to us that the deduction points of takeaway platforms are getting higher and higher.
"Some platforms charge us a commission of 20% to 25% of the price of the dish. A 20 yuan takeaway service fee, event promotion fee and packaging fee will be basically cut in half. In addition to rent, water, electricity and labor, let alone profit, it would be good if it would not lose." Xiaozhuang, who runs a wooden barbecue fast food restaurant, said.
It is understood that the current deductions of points for catering merchants by major domestic takeaway platforms vary according to different cities and categories, but they are basically between 20% and 25%, accounting for about 15% to 20% of merchant costs, almost reaching the rent level.
From a realistic perspective, the deducting point-up has the greatest impact on small and medium-sized catering merchants. Large catering merchants have their own traffic entrances and fixed consumer groups, and have a certain voice in negotiations with takeaway platforms; while small and medium-sized catering merchants can only develop takeaway business through existing takeaway platforms, so the right to speak is in the hands of the platform and can only passively accept the relevant decisions of the platform.
2. There are more and more activities. If you lose money, don’t do business,
One of the major reasons why consumers use the takeaway platform is that the takeaway platform often holds activities, and ordering is more preferential than dine-in. In the early days, in order to gather users, takeaway platforms actively subsidize merchants and encourage them to participate in online discount activities, so that merchants can enjoy their benefits.
Nowadays, the strategy of spending money and subsidies for takeaway platforms is gradually drifting away, and the cost of online discount activities has also quietly shifted to merchants. There are many activities and few subsidies, and losing money if you do it or not, which is an embarrassing situation that most businesses face.
Old Li, the owner of a Sichuan restaurant, told reporters that the original part of the reduction in activities was that the platform and merchants were borne by four or six, but now it has become 100% borne by merchants.
"If you don't participate in the 'full discount', other restaurants are doing 'full discount', and the number of orders (my) will decline. If you don't participate in the event, your ranking on the platform will become lower and lower."
△There are many kinds of activities on the takeaway platform
. Lao Li is very confused. If you don't do the event, you will have no business. After the event, although the sales volume has increased, the cost is deducted. Each order cannot make money at all, and sometimes you have to lose money.
In order to ensure profits, he had to raise the price of online takeaway. If a dish worth 100 yuan is to maintain a 5% basic profit, he had to raise the price to at least 140 yuan.
"Although the profit has not changed, our credibility is hurt. In the past, the three parties won the win-win situation, but why has it become like this now?" Lao Li could not accept such a gap.
3. Bidding ranking: No matter how good the production is, it is difficult to make a name for
If traditional catering is used as a "position", then takeaway catering is used as a "traffic". Data shows that 70% of online merchants’ traffic currently comes from rankings.
There are more and more restaurants entering the takeaway platform, and the platform ranking is limited. "There are more monks and less porridge", bidding promotion and keyword promotion came into being.
Earlier, the media exposed the bidding rankings of takeaway platforms. Merchants can buy high-ranking positions as long as they spend money, while the platform charges according to the number of clicks. The payment amount depends on the promotion intensity. The higher the intensity, the higher the payment amount, the better the promotion effect.
A catering merchant who did not want to be named told our reporter that new stores generally have 1 to 2 weeks of free promotion. During this period, the rankings are often in the top 10, and the merchants' takeaway order volume can reach an ideal state. After the free promotion period, the restaurant ranking will decline.
"If you don't participate, your ranking will be downgraded. No matter how delicious your food is or the store reputation is good, it will be ranked very behind. It will be difficult for customers to see your store, unless you manually search for the store name, the orders will also drop sharply, and you may only have a few orders a day."
He said that the charges for bidding rankings in the past two years have become more and more expensive. The highest price last year was only around 200 yuan, and by this year, the highest has reached nearly 300 yuan.
"The restaurants in the front are not because of the good reputation and the delicious food, but because of the much money spent, I feel speechless when I think of this."
4. Sign exclusive, the struggle between platforms is comparable to palace fighting drama
takeaway platforms, in order to protect their own users, the platform often requires merchants to sign exclusive agreements.
Once the merchant signs an exclusive agreement with the takeaway platform, its stores will not be available on other takeaway platforms, which will inevitably reduce the order volume. The struggle between the platforms has affected the fish, and catering merchants have complained.
The owner of a takeaway restaurant said: "We signed the agreement on time and accepted a 20% service fee. The last time I called for an exclusive agreement, I said that I would consider it, and the number of orders received began to decrease. We didn't notice it at the time. In early March, the platform narrowed our delivery scope. In the past, there were one or two hundred orders a day, but suddenly it decreased to less than 20 orders a day, and it lost a lot."
△The platform exclusive agreement circulating online
Our reporter learned that in response to the "signing exclusive" behavior of takeaway platforms, relevant departments have long stated that any behavior that forces merchants to make exclusive choices between takeaway service platforms seriously infringes on the merchant's independent operating rights and is suspected of constituting unfair competition and monopoly business behavior. Once discovered, it will be dealt with seriously in accordance with relevant laws and regulations.
However, the "reminder" from relevant departments does not seem to be very useful. Many merchants said that the unspoken rule of "signing exclusive" has not been reduced, but has just been transferred to "underground" and forced merchants to take sides in various ways.
"In the past, I directly called out 'If you dare to cooperate with other takeaways, I will let you go offline'. Now it has become a temptation, such as giving certain 'support' policies to improve the ranking, but the premise is that you can't go online to other platforms." Xiao Liu, who runs an internet celebrity pancake shop, said.
5. Who is at a disadvantage in the conflict?
After the outbreak of Indian restaurant boycotting takeaway platforms, Hosanagar, a well-known Wharton professor, pointed out that the possibility of restaurants gaining the upper hand is very small because they are unable to withstand takeaway platform companies with high-quality engineering talents and venture capital.
In fact, both in India and in China, most small and medium-sized businesses are currently at a disadvantage in the struggle between merchants and platforms.
As a major consumption trend in the future, catering merchants cannot completely give up the takeaway business line.
Take the domestic takeaway market as an example. The "China Online Takeaway Market Monitoring Report in the First Half of 2018" released by iMedia Consulting shows that the scale of China's online catering takeaway market maintains double-digit growth every year. In 2017, the market size has exceeded 200 billion yuan. In the first half of 2018, the scale of China's online catering takeaway market exceeded 125 billion yuan, and it is expected that the overall market size will reach 243 billion yuan in 2018.
At the same time, the scale of online catering takeaway users in China increased by 19.1% compared with 2016 to 305 million, and is expected to reach 355 million in 2018, an increase of 16.4% compared with 2017.
With the expansion of the influence of the "lazy economy", the online takeaway market will further expand in the future. Which catering business can resist the wave of the times? If a merchant is unwilling to enter the takeaway platform, he has to make takeaway by himself; but whether it is a self-built platform or a self-built delivery team, it requires high costs, and most small and medium-sized enterprises do not have such conditions and capabilities.
On the contrary, takeaway platform companies have a large number of loyal takeaway users and have strong operation and delivery teams, which can provide restaurants with operation, delivery and other service support.
"The current situation is that the contradiction between catering merchants and takeaway platforms is constantly escalating, but it cannot be separated from the takeaway platform." An industry insider bluntly said that blindly resisting cannot effectively solve the problem, and merchants who have lost their right to speak will eventually be forced to compromise with the platform.
"On the other hand, takeaway platforms are facing a crisis of trust. If the industry environment is not rectified and the platform's domineering style remains unchanged, there will definitely be more boycott activities in the future. In the long run, both sides will only suffer losses."
Conclusion
Some people describe the current relationship between takeaway platforms and catering merchants as "love and kill each other", with more and more conflicts, but they are inseparable from each other.
In fact, the platform hopes that merchants can enter and attract more traffic, and merchants hope to increase revenue with the help of the platform's entrance. Both have their own needs, and the best state is undoubtedly win-win.
Nowadays, such a relationship has been broken. For the platform, it may be necessary to stop and reflect on whether it is too squeezing merchants when chasing profits? Is there a fairer and more mutually beneficial cooperation model?
For catering businesses, tolerance and boycott cannot solve the problem. What we really need to consider is: how to enhance the right to speak and protect legitimate rights and interests?
Finally, I also hope that the government will "take action when it is time to take action" to regulate the order of the takeaway market and allow the takeaway economy to develop healthily and sustainably.
Source: Hongchen
5. Who is at a disadvantage in the conflict?
After the outbreak of Indian restaurant boycotting takeaway platforms, Hosanagar, a well-known Wharton professor, pointed out that the possibility of restaurants gaining the upper hand is very small because they are unable to withstand takeaway platform companies with high-quality engineering talents and venture capital.
In fact, both in India and in China, most small and medium-sized businesses are currently at a disadvantage in the struggle between merchants and platforms.
As a major consumption trend in the future, catering merchants cannot completely give up the takeaway business line.
Take the domestic takeaway market as an example. The "China Online Takeaway Market Monitoring Report in the First Half of 2018" released by iMedia Consulting shows that the scale of China's online catering takeaway market maintains double-digit growth every year. In 2017, the market size has exceeded 200 billion yuan. In the first half of 2018, the scale of China's online catering takeaway market exceeded 125 billion yuan, and it is expected that the overall market size will reach 243 billion yuan in 2018.
At the same time, the scale of online catering takeaway users in China increased by 19.1% compared with 2016 to 305 million, and is expected to reach 355 million in 2018, an increase of 16.4% compared with 2017.
With the expansion of the influence of the "lazy economy", the online takeaway market will further expand in the future. Which catering business can resist the wave of the times? If a merchant is unwilling to enter the takeaway platform, he has to make takeaway by himself; but whether it is a self-built platform or a self-built delivery team, it requires high costs, and most small and medium-sized enterprises do not have such conditions and capabilities.
On the contrary, takeaway platform companies have a large number of loyal takeaway users and have strong operation and delivery teams, which can provide restaurants with operation, delivery and other service support.
"The current situation is that the contradiction between catering merchants and takeaway platforms is constantly escalating, but it cannot be separated from the takeaway platform." An industry insider bluntly said that blindly resisting cannot effectively solve the problem, and merchants who have lost their right to speak will eventually be forced to compromise with the platform.
"On the other hand, takeaway platforms are facing a crisis of trust. If the industry environment is not rectified and the platform's domineering style remains unchanged, there will definitely be more boycott activities in the future. In the long run, both sides will only suffer losses."
Conclusion
Some people describe the current relationship between takeaway platforms and catering merchants as "love and kill each other", with more and more conflicts, but they are inseparable from each other.
In fact, the platform hopes that merchants can enter and attract more traffic, and merchants hope to increase revenue with the help of the platform's entrance. Both have their own needs, and the best state is undoubtedly win-win.
Nowadays, such a relationship has been broken. For the platform, it may be necessary to stop and reflect on whether it is too squeezing merchants when chasing profits? Is there a fairer and more mutually beneficial cooperation model?
For catering businesses, tolerance and boycott cannot solve the problem. What we really need to consider is: how to enhance the right to speak and protect legitimate rights and interests?
Finally, I also hope that the government will "take action when it is time to take action" to regulate the order of the takeaway market and allow the takeaway economy to develop healthily and sustainably.
Source: Hongchen
