An X (formerly Twitter) user has brought to light the plight of small businesses and cloud kitchens in India that depend heavily on online food delivery apps like Zomato and Swiggy. In his post, he has talked about the heavy platform fees and other charges that small businesses have to bear on these apps. He even shared a screenshot that showed how little profit a small business makes after all the heavy charges and deductions. Scroll on to see the post and what Netizens had to say about it.
X User Questions Heavy Fees Platforms Like Zomato Charge Small Cloud Kitchen
My friend had to make the heartbreaking decision to close his cloud kitchen. The high fees and deductions from platforms like #Zomato made it impossible to sustain the business. It’s unfair that while they charge small businesses heavily, customers are also burdened with extra… pic.twitter.com/mkBJ9a3nrA
— Udit Sangwan 🇮🇳 (@uditbsangwan) August 19, 2024
X (formerly Twitter) user, @uditbsangwan, took to social media to show how small cloud kitchens in India are not able to sustain because of the heavy charges and deductions by platforms like Zomato and Swiggy. In his post, he talked about how his friend, an owner of a cloud kitchen, had to make the “heartbreaking decision to close” his business recently. According to him, “the high fees and deductions from platforms like #Zomato made it impossible to sustain the business.”
He then went on to call the heavy charges that these platforms levy from small businesses “unfair”. He also pointed out how the customers also have to bear extra costs because of this. In his post, he questioned how “small businesses can thrive in such a system?” He even added a screenshot of how little profit his friend ended up making after all the charges and fees were deducted from the sales.
Here’s What Netizens Had To Say About This Situation
The comments section of this post was quite interesting. Many of them shared their own experiences with online platforms, while others complained about how they’re making profits by charging such high prices to customers. Many pointed out that Zomato, too, is a business that wishes to make a profit in this industry. Here are some interesting comments you cannot miss out on.
@zomato‘s business model is predatory both for customers and businesses on its platform. Zomato must re-evaluate its charges or it will kill the entire business model.
— notional_reality (@turning_axis) August 20, 2024
I had a fast food restaurant in central Delhi from feb 2015 to Jan 2020 I sold my setup with a little loss due to the high commission cost. You won’t survive with these online platforms n if you sell at higher price then also you won’t survive due to high competition.
— Limitless Kshatriya (@puneetkumar1312) August 20, 2024
I went to my local eateries where newly opened cloud kitchen serves food. I asked him can I get one parcel. He did he only accepts online order. Even cloud kitchen are responsible for not using their head.
— Typhoonnod (@typhoonnod) August 20, 2024
So you want your friend to be a capitalist and Zomato to be a socialist?
— Kaustubh Kale (@KaustubhKale) August 20, 2024
From the beginning of times it’s a well known fact that brokers and middleman will make most money.
— NGR (@NGR_blr) August 20, 2024
These small business give employments to masses. If they will fail, unemployment will rise.
— Buttlescutt (@anujnandwani) August 20, 2024
Unka bhi business hai koi charity organisation nahi
— eren (@adityapol314) August 20, 2024
Bhai, store format is also not working and now cloud is also not working? That what works??
— only संयम (@Rajesh78599748) August 20, 2024
…well, it’s simple—stop ordering from them, and they’ll be forced to change. We’re the ones giving them that power.
While convenience is important, we can take 15 extra minutes to walk and get our food.
Late-night cravings? Time to cut back on those! :)
— Govardhan Pinni (@govipinni) August 20, 2024
It is same everywhere. My frnd too says at 30% cut by #Zomato makes it difficult to run the kitchen. Also they need to pay for clicks and he says he ends paying more since it is new restaurant
— Sunil K (@SunStocks) August 20, 2024
Rs.434 for 8 orders!! That too is not even profit…it is just Revenue for the owner. Food cost, rentals, salaries etc all to be adjusted from that!!
— A Fintrovert (@Fintrovert_com) August 20, 2024
It is not Zomato’s duty to create profitable small businesses. They always have replacements ready.
— N. (@Hmmm_er) August 20, 2024
WTH are these very high deductions & how does #Zomato justify these deductions!! Have they mentioned in the agreement or is it haphazardly being charged??
— Amit J Vaswani (@amitjvaswani) August 20, 2024
Absolutely I run a small outlet. These two platforms r leeches. Thier commisions, ads, discounts, taxes amount to 30-40%. For the first 2 month all my online orders were loss making. I did some changes. Convience is a luxury, so we think price should be less is stupidity
— Raveen K Pai (@PaiRaveen) August 20, 2024
Many even explained how small businesses tend to offer heavy discounts or spend too much on marketing, which in turn hampers their business.
Like any business, if this business is dependent on a single channel, maybe the product offering needs to be re-evaluated.
Here they spent 500 on discounts and 600 on ads etc. for a 2k sale. If it is a growth phase, it will have to be taken into account as investment during the…
— Gaurav Kumar Baliyan (@baliyangaurav) August 20, 2024
The bigger problem is: it appears your friend spent ₹600 on ads only to process 8 orders for a total of ₹2094. Cloud kitchens are a volume business. You and your friend need to understand this and figure out a way to scale your order volumes to at least 100/daily.
— Saket S.Pandit (@saketspandit) August 20, 2024
He ran ads on his outlet to get more orders, he ran a discount by himself to lure customers. And now you want customers at your comfort even without doing anything. The company is to earn profit and not to provide facilities. You paid 35.67% as total commission with taxes. ₹1040
— Vιѕнαℓ Mσ∂αηωαℓ (@aali_virus) August 20, 2024
Did you friend account for these costs/charges before listing it on Zomato? I have generally noticed that 99% of the restaurants hike their prices by 20-30% while listing on these platforms to offset these costs. Funnily enough some even put pamphlets within the orders showing…
— CK32 (@___110010100___) August 20, 2024
Also Read: Inspired By BigBasket, Zomato Launches New COD Feature That Streamlines Payment Process
This debate is quite interesting! What are your thoughts on this? Let us know in the comments!
Cover Image Courtesy: X/@uditbsangwan & Canva (representative image)
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