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Back-to-back controversies leave Zomato’s brand image with a bad aftertaste

Ananya Bhattacharya

Zomato’s been struggling with a lot of unsavoury news lately.

And that’s hit the Indian restaurant-rating and food-delivery business’s brand perception, shows YouGov’s BrandIndex, which monitors media and news events’ impact on consumer’s brand perception and purchase behaviours. YouGov is a London-based market research and data analytics firm.

Due to a string of controversies, Zomato’s “Buzz” score, measured by positive or negative news about the brand every two weeks, has fallen from 42.7 in early July to 35.9 in August end, data show.

The first bout of decline began on July 30. Social media erupted after a Twitter user wrote about losing Rs237 ($3.43) for cancelling an order after he was assigned a Muslim delivery-person and customer care executives refused to reassign the order to a Hindu delivery worker.

Though many, including rival Uber Eats, celebrated Zomato’s stance—”food doesn’t have a religion”— the row took its toll.

The second hit came in mid-August when angry restaurateurs began a #logout campaign against Zomato, Dineout, EazyDiner, and other such delivery-platforms. The Deepinder Goyal-led company especially faced their wrath due to its membership programme which relies on deep discounting. Over 2,000 of the Zomato Gold subscription programme’s 6,500 partners withdrew from the platform.

Zomato buzz index declines

Zomato buzz index declined from July to August.

Zomato went into damage control mode, restricting Gold membership, limiting the number of unlocks per day, and also users per table who could use the membership. Additionally, it made sure login IDs can only be used on a single mobile device at a time.

Eateries were still not buying it. Rahul Singh, president of National Restaurant Association of India (NRAI) which represents over 500,000 members, dismissed Zomato’s changed stance as a “knee-jerk reaction,” calling it merely an attempt “to stuff old wine in a new bottle.”

By then, Zomato’s overall brand health had suffered.

The index score—an average of quality, value, impression, reputation, satisfaction and recommend scores—has posted a decline, too. Recommend—whether one would endorse the brand to others—plummeted from 42.5 to 37.5 in this period, YouGov found.

Zomato brand health

Zomato brand health

Zomato did not respond to Quartz’s request for comment at the time of publishing.

The bad news hasn’t stopped. In August, Zomato laid off 60 people from its customer support team. By early September this number ballooned to 541—10% of the company’s overall workforce.

Someone, please deliver some lip-smacking good news to Zomato. Now.

 

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