Hassan Fahmideh, Head of Tehran Restaurant and Kebab Union: Online Food Startups Have Progressed to the Point of Threatening Our Existence”
Hassan Fahmideh, the head of the Tehran Restaurant and Kebab Union, has criticized the monopoly established in the online food market. He stated, “The limited number of online food platforms has effectively made competitive market conditions impossible; these obligatory partners, through complex contract terms and unfair commissions, can advance to the point of driving a restaurant out of business.”
Recently, several union leaders discussed the problems caused by startups operating in the service sector and their impact on businesses during a joint meeting with Hamid Reza Rastegar, the head of the Tehran Chamber of Commerce. One of the sectors most significantly affected by online sales is the restaurant and kebab industry in Tehran. Fahmideh highlighted that his union faces a more severe threat compared to other sectors.
Fahmideh explained that the restaurant and kebab sector in Tehran is more exposed to the threats of e-commerce than any other sector. He elaborated, “Food, after public transportation, has the highest demand on online platforms. Unfortunately, the lack of necessary oversight over the performance and sales strategies of online platform managers has created numerous problems in this industry. Without adequate and sufficient supervision, a general crisis in the restaurant industry will occur.”
He added, “In the current economic downturn and with severe sanctions causing increased raw material costs and reduced customer numbers, business owners are forced into unreasonable and unfair contracts to maintain their business and reputation. This, in the long term, spells a bitter end for a successful brand.”
Fahmideh also referenced the COVID-19 pandemic, noting that startups and e-commerce companies experienced significant growth by leveraging the opportunities created. He explained, “During the outbreak, all restaurants were prohibited from accepting in-house customers. Consequently, online sales platforms, which had previously been slow in attracting restaurants, achieved the highest market share in food delivery, an unprecedented feat.”
However, Fahmideh pointed out that online food sales in the post-pandemic era are now a critical need for restaurants. Due to the limited number of online food platforms, competitive market conditions have become virtually impossible. These mandatory partners, through complex contract terms and unfair commissions, can even drive a restaurant out of business.
Fahmideh: Many Food Businesses Have Lost All Their Investments by Venturing into Online Sales Without Proper Advice”
Hassan Fahmideh, the head of the Tehran Restaurant and Kebab Union, has emphasized that many businesses in the food sector have lost all their capital by entering the online sales market without proper consulting. He stated, “We in the union firmly believe that an economic collapse in the business sector through this method is likely unless there is cooperation and interaction between unions and online sales platforms in the near future.”
Fahmideh outlined the major issues with online food sales platforms as follows: “Acceptance of restaurants without proper licenses, failure to verify business licenses with the union, collecting unreasonable profits from sales, creating a monopolistic market, signing unfair contracts, not directing citizens with complaints to the union for resolution, establishing special sales channels for select customers, ignoring the union’s specialized pricing to prevent food price inflation in society, creating restaurants using sales data from other restaurants, non-instant settlement with restaurant owners, and encouraging restaurant owners to accept raw materials instead of cash for food.”
He added that despite significant growth in e-commerce in Iran in recent years, the lack of attention from business owners to the growth and development of e-commerce and public enthusiasm for online services has led to online sales platforms becoming key partners for business owners across various sectors over the past five years.
Currently, Snappfood is the leading player in the online food market in the country, with competitors such as Tapsifood (formerly Ofood) and Fidilio, in collaboration with Asan Pardakht Persian, striving to gain a share of this market.
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