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How Sodexo plans to win the digital phase of employee food benefits war

As part of the Prime Minister’s Digital India movement, the Reserve Bank Of India (RBI) issued guidelines in March 2017 for meal vouchers to go digital. This move has set a new beginning for the reward services industry where a number of players fall short with the services they offer. The reward services company Sodexo had issued digital meal cards and begun its digitization process about 14 months ago and now offers digital solutions to the clients across 700 cities in India.

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Tackling Competition

With mobile payment platform, Paytm also entering the food voucher market with its Food Wallet it is likely to be a significant competitor for Sodexo. New age companies like Zeta and Niyo that operate digitally and offer services like mobile wallets and e-cards are also competition for Sodexo.

However, Sodexo denies any competition and believes that it has its own share of the food coupon pie. They have shifted almost 60 per cent of its business into digital. Sodexo’s vouchers are limited to food and non-alcoholic beverages and run on their own proprietary acceptance network. The company has 32,000 terminals across India and also has a mobile app.

Suvodeep Das, VP Marketing Benefits and Reward Services Sodexo, said, “Sodexo has had a strategy long back to combat the competition in its way. The company’s strategy to stay ahead of its competition is to create a relevance in the minds of the consumers and create compliant solutions.” 

“We have created the only compliant solution in the market, and this is why the clients trust us. Secondly, we have set the runway for ourselves in terms of having cutting-edge technology solutions ready to offer. We are so far ahead of the curve that we always like it when there are competitors,” Das adds.

Sodexo offers two solutions in India- meals benefits solutions and employee benefits solutions. These cards functions through their own payment gateway, and not via the RuPay or MasterCard network, thus ensuring full compliance. They have a one-on-one relationship with every merchant and have a client contract with them which clearly states that the merchant is legally obliged to accept the card for food and non-alcoholic beverages only.

The meal benefit coupons of Sodexo help in tax exemption for the users and the proprietary system ensures that they are used only for food and non-alcoholic beverages which makes the company compliant. 

Future Plans

Sodexo has a tie-up with sales deploying companies like Pine Lab where the meal cards can be swiped easily. The company plans to expand its voucher network to Tier 2 and Tier 3 cities by July 2017 and aims to extend its reach from 700 towns to 1500 in the next three months.

“In terms of marketing, we have a very niche target audience since we are a B2B segment. But now our main focus is digital marketing and the major development on that front is the Chief Human Resource Officers (CHRO) forum,” said Das.

Talking about the challenges of going digital, Das said, “We went to the market almost a year before demonetization happened, at that time we had the challenge to educate the 7000-9000 retailers who had never seen a machine, about its benefits; and how it works. That was tough but we had to do it because we wanted to be a 100 per cent compliant solution and that is what we did.”

Sodexo currently has three million active users, meal cards and an app linked to the gift card and is expanding every day. It's digitally viable products and services have been in line with government's initiatives and HRs from leading MNCs & companies are opting to offer the same to achieve employee tax benefit. 

“We have tie-ups with?? around 6,000 restaurants currently. The total number of outlets tie-ups? is at 15,000, which includes shops and we are growing and adding more every month,” Das concluded.

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