72% of CoD bills paid in Rs 2K notes? Zomato tweet a 'marketing ruse'

Restaurant aggregator and food delivery start-up Zomato on Monday tweeted “as many as 72 per cent cash-on-delivery (CoD) orders since Friday paid in Rs 2,000 notes”. This comes two days after the Reserve Bank of India (RBI) announced the purge of Rs 2,000 currency notes in circulation — a decision aligned with the RBI’s ‘Clean Note Policy’ and aimed at eliminating low-velocity notes from circulation.

However, a source close to the company said the move was simply a marketing ploy, and the percentage shared had no real factual underpinning.

“Zomato’s marketing team routinely plays with puns on social media,” informed the source, adding, “The data mentioned in the tweet is just an indiscriminate figure and not factual. It was tweeted as a meme.”

Queries sent to Zomato elicited no response until the time of going to press.

The RBI, which stopped printing Rs 2,000 notes in 2018–19, said the existing notes in circulation could either be deposited in bank accounts or exchanged by September 30. These banknotes would, however, continue to be legal tender until the end of this period. Central bank Governor Shaktikanta Das said the decision to withdraw the highest denomination was part of currency management.

Yet the urgency to offload the pink notes — demonetisation’s last remaining vestige — has set the cat among the pigeons.

Many Zomato users took to Twitter on Saturday to express dismay as the food aggregator’s delivery partners refused to take Rs 2,000 notes as payment.

“The Zomato delivery guy refused to accept the Rs 2,000 note as he thought it was not going to work,” tweeted Nripesh Gupta, a customer.

Tagging Zomato and Blinkit, another user called Mansi tweeted: “The delivery agent asked me to return the items on being giving a Rs 2,000 note! He said the company has asked him not to take this denomination from customers. He took the products back.”

Although industry executives across several sectors maintain that the Rs 2,000 denomination will be accepted (no questions asked), the hesitancy is particularly palpable — from mom-and-pop stores, wholesale markets and grocers to shopping malls, petrol pumps, and jewellers.

According to executives at various e-commerce and online delivery firms, online retailers will continue to accept Rs 2,000 notes from customers for CoD orders as long as they remain legal tender.

“We have to accept the Rs 2,000 note as it is still legal tender,” said an executive at a large e-commerce firm.

“There are no qualms. There are at least four months left until we can get them exchanged,” he added.

The withdrawal of Rs 2,000 banknotes is expected to be less disruptive than compared to the scrapping of 86 per cent of India’s currency in circulation over six years ago.

In 2016, the government withdrew the legal tender status of all Rs 500 and Rs 1,000 notes overnight. The new Rs 2,000 notes were introduced to meet the currency requirement of the economy.

According to RBI data, about 89 per cent of Rs 2,000 notes were issued prior to March 2017 and are at the end of their estimated lifespan of four to five years. The total value of these banknotes in circulation has sharply declined to Rs 3.62 trillion, constituting only 10.8 per cent of notes in circulation as of March 31, 2023, from Rs 6.73 trillion at its peak as on March 31, 2018, which was 37.3 per cent of notes in circulation at that time.

Official queries sent to several quick commerce and e-commerce firms went unanswered.

Zomato recently reported its losses narrowed both sequentially and on a yearly basis for the 2022-23 (FY23) January-March quarter (fourth quarter, or Q4). The food aggregator’s consolidated loss narrowed to Rs 187.6 crore in Q4FY23, from Rs 346.6 crore a quarter ago and Rs 359.7 crore in the year-ago period.

In FY23, Zomato trimmed its losses to Rs 971 crore, from Rs 1,225.5 crore in the previous financial year.

Revenue from operations for the Gurugram-based food delivery company stood at Rs 2,056 crore for the quarter, up from Rs 1,948.2 crore in the third quarter (Q3) and Rs 1,211.8 in the corresponding period a year ago.

The firm’s total expenses fell marginally to Rs 2,431, down from Rs 2,485.3 crore in the previous quarter and Rs 1,701.7 crore in the same period in 2021–22.

Zomato’s earnings before interest, tax, depreciation, and amortisation (Ebitda) loss narrowed from Rs 265 crore in Q3 to Rs 175 crore in Q4. Excluding its quick commerce, however, the food aggregator turned adjusted-Ebitda positive in the March quarter.