Identified in an email sent by Zomato, the company will no longer have exclusivity rights for cloud kitchen restaurants that are operating on its platform. This can be seen as a major move in their strategy as it will allow these exclusive restaurants to list on competitor platforms like Swiggy.
This exclusivity of cloud kitchens was part of distinguishing Zomato from its competitors and with the exclusivity revoked, the competitor brands would be allowed to list these kitchens on their platform. However, Swiggy hasn’t confirmed any development of listings on their platform and has said they may or may not go through with it.
Zomato also made a move of reducing discounts on its platform recently which has impacted badly on its sales and delivery orders. By removing exclusivity rights, they will be able to get rental revenue through sales with zero opportunity cost.
As a cloud kitchen head pointed out, the exclusivity of restaurant listing should come with the promise of heavy demand on that one platform. With their move to reduce discounts, it will become difficult to gain revenue and orders at a profitable level.
A move towards cloud kitchens has been noticed in the country with even retailers wanted to have a cloud kitchen instead of a physical store. Cloud kitchens are takeaway outlets that don’t have an arrangement for dining. These kitchens list themselves online to receive orders and save on infrastructure costs.