On a tweet Monday morning, India’s top food delivery company confirmed that 72% of its CoD – cash on delivery orders were received with Rs. 2,000 notes. Earlier this month, the Reserve Bank of India had informed the public that the currency would be henceforth out of circulation and no new notes would be printed. However, the currency would remain legal tender and that the public may return all their notes to any bank in exchange of other denominations.
It is not surprising that the food delivery orders are being channelised to exchange the currency which will soon go out of circulation. What is surprising, however, is that the order values have grown 4-fold for Zomato.
It is common in the food delivery business to have an Average Order Value (AoV) of Rs. 500-600. The typical order size is for 2-3 adults at best, except for when there are party orders or during weekends.
With an incremental price on the menu for ordering with additional delivery charges (and peak surcharges at times), consumers have already been burdened to order online through delivery apps. It is common to see the delivery time for restaurants that are as close as 3-4 kms is over 35 mins.
Many customers would rather prefer to visit the outlet in person and dine in or pick-up, rather than wait for the food delivery, especially with cold food and at higher prices during peak hours.
The catch here is that most restaurants would not prefer to collect Rs. 2,000 currency denomination, as it is a hassle to deposit them back in banks as well as explain the source of income, in many cases. Most mid-size eateries forego GST input and pay composite tax. This is one reason they are weary to collect high denomination notes.
Zomato, being a publicly traded company, handles all its transactions with vendor partners only through digital bank transactions. Therefore, it becomes a safe harbour for restaurants to channelise their collections through Zomato, instead of directly collecting Rs. 2,000 notes from customers. Only that the whole episode was a joke!
Much after the above tweet went viral, a top executive told Reuters that the tweet was made in jest and was not factual.
