Could food delivery platforms like Thrive be the end of the Zomato and Swiggy duopoly?
Restaurants are now switching to the low commission delivery platform. We find out the hows and whys.
The COVID-19 pandemic has had hard-hitting effects on the F&B industry. With restaurants being shut down and public movement being restricted, worry-free dining out has begun to seem like a distant dream. One could even argue that our consumption patterns have changed––in a bid to stay safe and limit exposure, dine-in culture has found new life and people have begun relying heavily on home deliveries from restaurants. In such a scenario, food aggregators like Zomato and Swiggy are natural go-tos for consumers. But how does it affect restaurants?
Delivery platforms like Zomato and Swiggy charge commissions that range between 18% to 25% and exercise monopoly over customer data, both of which do not help players in the F&B industry, which is already having trouble staying afloat. This is where delivery platforms like Thrive come in. A new app on the block and brainchild of founders Krishi Fagwani, Dhruv Dewan and Karan Chechani, who also run the parent company, Hashtag Loyalty, Thrive is fast growing to become the first choice for restaurants in Mumbai, at least.
What's different about Thrive?
The platform allows restaurants to set up their own delivery infrastructure as well as have access to customer data, which isn't the case with competition aggregators. Additionally, Thrive is charging restaurant partners a phenomenally marginalised commission of only 3% per transaction, which allows restaurants to have larger profit margins. ''Our revenue model is a mix of commission, plus subscription. Restaurants pay 3% per order and a monthly subscription fee to utilise marketing features to engage with their customers. However, for any restaurant that is delivering Covid meals in their city, we don't charge any commission except for payment gateway and delivery charges as per actuals,'' shares Sumesh Marya, vice president, sales, Thrive.
The company has integrated delivery partners like Dunzo, Shadowfax, Pidge and WeFast, so that they can even reach out to people in Tier 2 and 3 cities across the country. In Mumbai, popular restaurants like Americano and Izumi set up their own online ordering systems via Thrive. The Table, Supper and Natural's Ice Cream are also some names that have taken up their services. ''We're comparing the order direct solutions to aggregators and their discoverability features, but we now have to take ownership and reduce dependence on them. We need to take control of how we reach out to our customers'' says Gauri Devidayal, founder of hospitality ventures, The Table and Magazine Street Kitchen.
Since launching in August 2020, the platform has about 3000 restaurants on it and around 1600 restaurants have onboarded themselves onto the self-service loyalty program. ''When Supper launched I was adamant that I wouldn't want the brand to be on Swiggy and Zomato. There is a flip side to working with these companies––while it is difficult to run without them, they tend to bleed out small food businesses. When I came across Thrive, it felt like the perfect choice for us. We were able to spread the word via Instagram and Facebook ads and the customer acquisition cost turned out to be so much cheaper in comparison to Swiggy and Zomato" argues Sahil Dewani, co-founder of the DIY meal kit delivery service, Supper. Adding that the biggest benefit of being on Thrive is that it enables companies to tap into their own customer database.
"For long term scalability, it is super important that brands know the kind of people that are ordering from them to make better decisions on their menus and future strategies. With Thrive downloading customer data is literally one click away,'' Dewani explains.
When asked about how Thrive plans on promoting diversity across their platforms, Marya says, ''We added features like pre-ordering for certain items in the menu and delivery across the city and have enabled home chefs, frozen food retailers, sweet shops, and even craft breweries to start their own online ordering platforms. To help visibility, we launched Thrive Direct which is a listings page for all our partners. Customers can find and order food directly from restaurants delivering to them.''
While a platform like Thrive is helping facilitate independence in the F&B industry, the question remains about whether or not a model like this could rival its established competitors. And for that, we will have to wait and watch, while we hope that diners are reciprocating to a more just and fair system and partake in the culture of working together with restaurants, who are in dire need of our help.