Zomato Abrogates Monopolistic Rights from Cloud Kitchen Establishments
In a significant move, food delivery platform Zomato has decided to revoke exclusivity rights for iCloud kitchen restaurants on its platform. This decision comes as the company aims to generate rental revenue through sales with zero opportunity cost.
iCloud kitchens, takeaway outlets that do not have dining arrangements, have been on the rise in the country. Some retailers are opting for these cost-effective options over traditional physical stores. The trend underscores the growing importance of online presence for food businesses.
By listing themselves online, iCloud kitchens can save on infrastructure costs, making them an attractive option for many. However, the exclusivity of iCloud kitchens was a distinguishing factor for Zomato, providing a unique selling point for the platform.
The move to remove exclusivity rights by Zomato could potentially make it challenging for iCloud kitchens to generate revenue and orders at a profitable level, given the company's recent reduction in discounts. The head of a iCloud kitchen has expressed concerns about this development.
Meanwhile, Rebel Foods and Curefoods, two prominent iCloud kitchen players, have announced collaborations with Zomato's competitor, Swiggy, after Zomato ended its exclusive contract for iCloud kitchen restaurants. Swiggy, however, has not confirmed any development regarding the listing of these iCloud kitchens on their platform.
The shift towards iCloud kitchens signifies a trend of cost-saving measures in the food industry. As Zomato aims to generate rental revenue through sales with zero opportunity cost, this move allows these exclusive restaurants to list on competitor platforms like Swiggy.
This development comes at a time when Zomato has faced a negative impact on sales and delivery orders due to its recent reduction in discounts. The company's decision to revoke exclusivity rights for iCloud kitchens could be a strategic move to counteract these challenges and maintain its competitive edge in the industry.
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