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#StartupsVsCovid19: Restaurants Eye Cloud Kitchens, Tech To Dodge Virus Impact

#StartupsVsCovid19: Restaurants Eye Cloud Kitchens, Tech To Dodge Virus Impact

Many restaurants in India are adopting the cloud kitchen model to tackle the lockdown effect

Dine-in consumers are not going to jump back into the market anytime soon, said POSist's Ashish Tulsian

Revival of restaurants is more difficult than travel and tourism, said Dineout cofounder Ankit Mehrotra

In Shanghai, life is returning back to normal after coronavirus haunted the city for months. However, the city is taking cautious steps towards normality and following every possible step to maintain social distancing between humans.

For instance, many restaurants are now taking their dine-in orders on Tencent-owned messaging platform WeChat. People can also use the same application to pay for their food bills on the same application. Taking cues from China, Indian restaurants are also expected to look the same in the future as well, at least some experts believe so.

Meanwhile, some of the restaurants, given the low dine-in demand, have pivoted to the delivery-only model. Amid the ongoing lockdown, many restaurants in India are adapting to the cloud kitchen model to keep their operations running and POSist’s cofounder and CEO Ashish Tulsian believes that they are going to be the future.

Speaking to Inc42’s founder and CEO Vaibhav Agarwal, Tulsian said that recently five-star hotel chain Oberoi ventured into home delivery. “If something like this is happening, the writing is very clear on the wall,” Tulsian added in an ‘Ask Me Anything’ session with Inc42.

Of course, the world is changing. With this, there are huge chances that there will be irreversible behavioural changes as well. “Dine-in people are not going to jump back soon. People are still going to be afraid of going out. It will take time for things to come to normal, but delivery businesses are gonna thrive immediately,” Tulsian added.

Lockdown Kills Restaurants

Indeed, it is a tough time for businesses due to the movement restrictions brought in by the lockdown. However, the restaurant business is one of the worst impacted. Dineout’s cofounder and CEO Ankit Mehrotra said that the revival of the restaurant industry is even difficult than the travel and tourism industry.

“80% of restaurants are usually owned by a single person or a family. For them, coming out of the lockdown is going be really difficult as compared to travel and tourism players as they have deep-pocket backers,” said Mehrotra.

Tulsian noted that if this situation continues for three months, restaurants are going to bleed but they will come back. He also gave an example of his own business and said that sales have dried up, as most restaurants shut down their operations.

Further, both agreed that many of the restaurants are going to shut down if the lockdown continues beyond April 14. “Restaurant sales across India are down to 3%, from tracking INR 42 crore worth of sales on restaurants daily, it is now down to INR 1 Cr per day,” Tulsian said about data from his restaurant billing tool POSist.

Meanwhile, Mehrotra expects that around 50% of the restaurants are going to shut down if the lockdown ends in June. Most of these restaurants might even merge with other bigger restaurants, he noted. To help such restaurants, Dineout is currently taking a slew of measures. It has launched pay-now-and-dine-later vouchers. Using this scheme, people can buy discounted vouchers for dining at restaurants in the future.

Additionally, it is also running an online petition wherein over 25K individuals have already requested the government to introduce employee unemployment pay cover for people working in restaurants immediately.

Besides these measures, Dineout is also planning to launch a platform similar to the one used in Shanghai. Mehrotra said, “Menu and cash are some of the common ways by which a virus spreads. So, a platform, where people can order online and pay online while dining at restaurants, can curb the spread of the virus.”