"We want less commission," said Wow! Momo Co-Founder and COO Binod Homagai as restaurants continue to grapple with the cost of doing business through food delivery platforms.
Food delivery platforms typically take a sizeable cut from restaurant orders. Homagai said commissions are in the range of 20 per cent to 25 per cent. "If commissions become a little less, then sustainability for the restaurant becomes much better," Homagai told NDTV.
His comments come at a time when restaurants and food delivery platforms are locked in a debate over commissions, discounts and other deductions. Recently, in Bengaluru, restaurant associations had threatened to stop accepting orders through Swiggy and Zomato, citing concerns over commissions and other charges.
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NDTV reached out to Swiggy for a comment, but the food delivery platform turned down the request. Similarly, Zomato also chose not to comment on the matter.
'Food Platforms Have Changed Consumer Preference'
Despite his concerns over commissions, Homagai credited food delivery companies with transforming the restaurant industry. "Food delivery platforms have also created a lot of brands and changed consumer preference. So, that credit we have to give to them -- they have done a fantastic job," he said.
He expects the food delivery market to expand further as more people work longer hours and cook less at home. "And now, more food aggregators are coming. It's not just Zomato, Swiggy, Foodpanda. Home kitchens are going to become smaller and smaller because people are working and they want to cook less and order more outside or go outside to eat," Homagai said.
"More food, more cloud kitchens, more brands will be coming up," he added.
The market is already seeing new models. Rapido's Ownly, for instance, entered food delivery with a zero-commission model for restaurants, adding another option for eateries looking for alternatives to the established platforms.
Wow! Momo Valuation At Rs 3,400 Crore
Wow! Momo is now looking beyond its restaurant business as it expands its packaged food operations. Homagai said the company has started exporting its frozen, packaged momos to markets in the Middle East and is also looking at countries such as Singapore and the US.
Unlike its restaurant business, these products are sold through supermarkets. The company is also expanding its FMCG range, including Korean pouch noodles. "FMCG is the future," Homagai said, explaining that the company's manufacturing capabilities give it an advantage in the packaged-food segment.
Wow! Momo currently operates more than 950 stores in India, according to Homagai. Unlike a franchise-led model, he said these are company-owned stores.
The company has a valuation of around Rs 3,400 crore. When asked whether Wow! Momo plans to go public, Homagai said: "In a couple of years."
The company is also planning further expansion in India, with Homagai saying it aims to add 150 to 200 stores over the next couple of years.
Why Wow! Momo Is Betting On FMCG
For Wow! Momo, packaged food is closely linked to its existing restaurant operation. The company manufactures momos for its restaurant network and sees the same manufacturing and supply-chain capabilities as an opportunity in FMCG.
"We are experts in manufacturing and supplying momos. We are one of the largest players of momos in India," Homagai said.
He said the company's focus is not simply on making momos but on constantly changing the product. "When we started, we had three to four flavours of momos -- chicken momo, steamed momo. Then we came up with cheese momo. Then we came up with burger momo. Then we came up with chocolate momo. Now we have sizzler momo also," he said.
The company has also built brands beyond Wow! Momo, including Wow! China, Wow! Chicken and Wow! Kulfi.
Online Orders Now 45% Of Sales
The shift in consumer behaviour is also visible in Wow! Momo's sales mix. Homagai said 45 per cent of the company's sales now come from online orders, while 55 per cent come from offline sales.
He expects online ordering to continue growing. "That is the future," he said.
At the same time, he believes physical stores remain important because consumers need to see and recognise a brand before ordering it online. For Wow! Momo, this means continuing to expand its physical footprint even as digital ordering grows.
Tier 2, Tier 3 Cities Are 'Real Money-Making Places'
Homagai is particularly bullish on smaller Indian cities. He said Tier 2 and Tier 3 cities offer lower rentals and manpower costs, while brand trust can be strong.
"That is the 'Bharat story'-Tier 2 and Tier 3 cities are the real money-making places," he said. Kerala, Chennai and Lucknow are among the markets performing strongly for the company, according to Homagai. He said per-square-feet income is highest in South India.
The company plans to expand further into Tier 3 cities.
