When I went through the Tipplr website one of the things that stuck out to me immediately was how your messaging seemed to focus on the restaurants themselves, you talked about not sacrificing the profitability of a restaurant and how you can help the business itself grow. I know that with other aggregators there have been complaints from the restaurant’s point of view about how things like deep discounts and the heavy commissions that they have to pay can sometimes be unfair to the restaurants themselves. So could you please tell us a little bit about why you chose to focus on the restaurants as much as you have?
Yeah actually if you look at, from last about one-one and a half years the entire paradigm has shifted. Earlier the focus used to be only on customers and companies would go to any length to give them – even if they are burning – to give them more discounts, they wouldn’t want to say that they wouldn’t care about restaurants, how are they doing, and the focus was all on customers so we wanted to bring in that equilibrium where it’s a win-win situation for all. So when I say win-win situation it’s not that we are a commission-free aggregator but the way we have actually shaped this entire thing when we started working with – because we spent about six to eight months talking to different restaurant partners, the owners, understanding the pain points, what were they going through and everything so then we came up with a model which will actually help the restaurants grow organically and also the customers are extremely happy when they’re ordering from a particular restaurant so that’s how we started it when we actually started.
It’s in the public domain but you must be knowing most of the restaurants today with other aggregators on the top line they’re losing about 30 to 40 % in commission to the aggregators. So then we came up with a model where we said probably we are the only one company which currently in India is doing this. We started giving them a lifetime contract of 10% flat commission but also we told them we give them a choice to pass on the discounts, whatever they want to offer to the regular customers. When I say regular customers, see earlier what used to happen with most of the aggregators they would not know who their customers are, right? Once it comes from the aggregator then nothing is shared with the restaurants.
They didn’t even know who were their customers, so we also addressed the problem with the restaurants and we told them you will get to know the data of your customer and we told them you pass on the discounts what you want to pass it on to your regular customers so that goes in terms of discount and we started charging the commission on the net bill, not on the gross bill. So when I say gross bill, for example let’s say a 1000 rupee bill and there is a 20% discount which the restaurant is offered to the customers – not to the aggregators. So the net bill becomes 800 rupees, we charge our commission on 800 rupees.
So we started telling the restaurants, the more discounts you start giving to the customers we would lose the commission part, but we are happy with it because we wanted the restaurant to be happy and we wanted the customers to be happy. So for example if from 20% if a restaurant increases their discount to 30%, we would lose another 1%. My commission from 10% becomes 7% but we are okay with it, we are happy with it, my restaurant partners are happy because our entire focus was towards the restaurant partners to boost them. So that’s where we are going, that’s why we call it ethical discounting and we give the complete control to the restaurant to control the commission of what they’re offering to us. No one else is doing both the discounts they offer to the customers directly and also the messaging. In terms of messaging we put it across to the customer saying that it is the discount which the restaurant is giving. We are just an aggregator who are actually helping you to get a better deal and great food from the best possible restaurants in the town
I went through your app yesterday and one of the more interesting features on your app is the ability to book co-working and co-studying spaces. So something that i don’t think I’ve seen in an aggregator app before and I definitely think it’s something that users will be using and appreciate going forward. Has the pandemic and the lockdown had any influence on you introducing this feature? Was it something you had planned even before that?
We started with converting the cafes into co-working cafes, that’s where our first product was, in fact later we started adding dining and delivery to the particular restaurant because we saw just before pandemic (when we started introducing this feature) we saw a good demand because you could just check into any of the cafes or pubs which are mostly vacant during the daytime and as low as for 99 rupees you get a workstation for yourself, so that’s how the whole idea started. So that’s when our entire focus now was actually shifted to the corporations. If you actually see what we are doing currently it’s completely corporate focused. The product which we have introduced which is called as ‘tipplr resto pass’, it not only gives you the corporate access to the cafes for a co-working space, the opportunity for a day to just check into any of the cafe and work there but on top of it the primary thing what we have actually introduced to the corporates is a restaurant which is a tax free meal pass. So our entire focus which we are working with the corporates now is to replace other meal pass companies.
There are only about one or two in the mainstream where we have started replacing them with most of the corporations to give them much more than what they used to get earlier. So that’s what’s called a ‘tipplr resto pass’ and that is one pass which gives access to all, which gives an access to the corporate for dining, delivery, takeaway and also co-working spaces. So this is a complete package, we talk to the HR team of a particular corporation, we get them all on board and we increase their spending capacity for every corporation. You must be aware of how the tax free meal pass works right? You are eligible for 2500 rupees, as in every employee is eligible for 2500 rupees of tax-free meal pass which you can actually avail from the corporate as an employee where you can save tax up to close to 26800 rupees to be precise every year. But just by engaging with ‘tipplr resto pass’ we increase the capacity of our spending which is ideally you would save about 27000 rupees in an ideal scenario but just by tying up with tipplr, the capacity increases to 35000. So you’re getting much more than what you used to get earlier and because once you’re tied up there’s absolutely no membership cost, we don’t artificially jack up the price and we don’t artificially introduce any membership to avail the discounts or the great offers which tipplr provides.
So adding to what Goverdhan rightly mentioned that the work cafe, currently due to pandemic, we had to really look into a different working stream. Now that our company started to get the business back, this is one of the opportunities for us. People sitting at home for the past one or two years, now they are looking at different ways of getting out of their house.
Speaking about the pandemic as well I’m sure it has affected your plans just like it has had an effect on pretty much everybody’s lives. Can you share with us how COVID-19 has impacted your business and what your views are and how it’s affected the food and restaurant industry as a whole?
So we should take this question into 2 parts – the entire hospitality industry, how have they been affected? They’ve been affected to a very large extent because even if we actually drill down – so we did a bit of stats with our partners and we did a bit of survey because we are in regular touch with all our partners just to get the feedback. Somehow where the delivery service was enabled, in those restaurants they have somehow managed to scrape through this entire pandemic okay.
There is definitely an impact but it’s not to that extent of where the dining was, so when I say dining it’s predominantly the pubs and the bars, because what happens is the model varies if you actually look at it because there’s a lot of the expense which is actually gone into – right from the interiors to everything, to just set up a bar or set up a pub. So from that front it has impacted severely and I believe we know now the government is also looking at it, if you actually see the recent news from the central and from the state governments in most of the states they are trying to help the hospitality sector at large. The second thing is the delivery itself. They were doing good even during the peak lockdown but half of the delivery centers were shut because of the workers who actually migrated from one place to another place which basically was from tier 1 to your tier 3 centers and half of the delivery or ‘delivery only’ restaurants had to close down.
So now everything is slowly coming back on track but that’s where we got a good feedback from our partners because of our commission model, because see it’s a very tough time and because of us being low (commission), they looked at us as the right partners in order to actually partner with and push in their sales because we don’t even charge for marketing. We do free marketing for our partners so that was our whole thing when we started this, we don’t charge for marketing. There’s no artificial click per cost and so we started promoting the restaurant. So that’s one factor which is actually helping them I think. Yes delivery somehow survived but dining is taking a very bad hit.
This particular space which you are involved in seems to be buzzing at this present moment in time. There are other apps like Thrive, DotPe, and Rezoy which are also taking on a restaurant-centric approach with their operations. So do you see apps like yours replacing the likes of Swiggy and Zomato or do you think there will be a point where there’s co-existence between everyone in the ecosystem?
So let me start with the market share. Just with food and beverage in India, it’s a 4.6 billion dollar industry. Currently if you see all Zomato, Swiggy and other competitors which you are talking about put together we have not even scratched the surface. It’s not even 2% of the entire business which is actually from offline to online which has been converted or we have actually got them into a space or a habit where they would actually book a reservation for a restaurant. But looking at the other ones which you just mentioned, we don’t call them competitors because our entire focus is on corporations and students.
If you look at it, what we look at is captive customers for us because when I sign up with big companies, when I sign my corporates, when I sign up with startups they’re all captive customers because their wallet is filled on the first of every month. Their wallet is filled and they have to spend it through the typical partners. The second thing is, you’re talking about Thrive, DotPe, they are predominantly a tech company where their entire focus is not to bring customers to the restaurants but to convert their offline menu to online. See they don’t advertise to get the customers to a restaurant but they work with the restaurants just to convert their offline menu to online menu. All the restaurants they know have to do the marketing.
For example, they’re not an aggregator, they’re a tech company which are converting the offline tools into an online menu where the restaurant at the end of the day will have to pump it in Facebook and Instagram and a couple of other social media platforms where if they want the customers to look at them and order through them directly, that is what they do. But we are pure aggregators, we predominantly work with our captive customers, they’re majorly the corporates and the students on top of it. The new feature which we’ve actually implemented, so when you were asking us about how the pandemic changed your company’s plan, it was actually a blessing in disguise because we introduced a new feature, we are the only ones who are actually enabling the club members to order from club kitchens.
So that’s another feature which we have introduced and we have started doing it and clubs love it, because clubs if you see till date they did not have any platform where you could just browse through the menu, order, and the order goes to the kitchen and the entire delivery is taken care of. Now we have started enabling that in Bangalore and so that is another feature which we have introduced during this pandemic. In fact Srini, who takes care of the entire tech can talk about it more but we just implemented it in about 55 to 60 days, the whole new feature for clubs.
So that’s another exciting feature which we’ve recently added. So to add on to what Goverdhan said, we are not a direct competitor to Zomato, Swiggy, where we see ourselves is we compete with Sodexo primarily because we work with captive customers.
Finally, we just wanted to know what your plans are going forward? How do you see tipplr growing in the next couple of years and how do you hope to achieve that growth? Is there anything else you would like to add? Any other message you’d like to include as a part of this interview?
Right now our current focus is expanding in Bangalore to test the water. So it’s like, is our model being accepted by the customer? So the plan is starting from September, we have plans of expansion around current cities in India, predominantly major metropolitan cities and then primarily the idea is wherever the software companies are there. We want to be exploring that. So that is the initial set of ideas, after that we are also looking at that route for the upcoming year. We are on a mission to create a win-win situation for all for the corporations, for our restaurant partners, and customers. Just like Srini was saying, our primary focus now is on the corporation, the students who were working because we wanted to give them something more which they actually deserve without paying any membership.
Our entire focus now is to give this benefit to as many corporations as possible because from the tax structure you will know this will help a great deal for all the corporates to just be on board with us because we are completely a free platform. If you see, even if we work with the corporates we don’t charge anything with our partners, it’s almost like a free membership or a free onboarding, what the corporates get but of a huge value for their employees. So that’s why we started connecting to all the corporates and we want all the corporates to enjoy these benefits which tipplr is offering in almost all the arenas like dining, delivery, and takeaway.
So adding one final word, we are sort of laying the foundation in terms of digital transformation, like how do we get multiple features into our app or something like basically trying to incentivize our investors and also keep our customers.