SUMMARY
As per a report, Zomato’s existing Gold members are still offered the benefits until they renew their subscriptions
Months after the re-launch, by November 2023, Zomato Gold’s total number of members touched 38 Lakh
During its Q2 FY24 earnings, the company had said that the Gold membership is less profitable than non-Gold and one of the main reasons for higher costs in the business is the no-delay guarantee benefit
Food delivery major zomato
has stopped offering ‘on-time guarantee’ benefits for its ‘Gold’ loyalty programme on memberships purchased or renewed from November 25, 2023.
However, Zomato’s existing Gold members are still offered the benefits until they renew their subscriptions, as per an ET report.
The ‘on-time guarantee’ delivery feature ensures that if users do not receive an order within a stipulated time, they get a coupon for the ordered amount and avail a discount in the next placed order.
Inc42’s email to Zomato to confirm the development did not elicit a response till the time of publishing the article.
However, Inc42 also found that the existing Gold members are given the ‘on-time guarantee’ benefits while the section is unavailable for users who want to buy new memberships.
Zomato relaunched Gold loyalty programme early last year after revising the offers and discounts offered to customers. In fact, after Zomato had discontinued its loyalty programme Pro Plus membership in August 2022, several investors were worried that the company would lose its users to competitor Swiggy.
Months after the re-launch, by November 2023, Zomato Gold’s total number of members touched 38 Lakh.
Zomato Gold membership is currently priced at INR 999 for three months. However, the food tech major offers a loyalty programme to users at a discounted rate of INR 149-INR 99 for three months.
It also offers a 14-day free trial for new users.
Zomato Gold competes with Swiggy One, which incidentally never had any such ‘on-time guarantee’ scheme as Zomato.
The re-launch of the Zomato Gold programme has played a major role in driving the company’s growth over the last few quarters. In Q1 FY24, the company achieved profitability for the first time.
In its last reported quarter, Q2 FY24, Zomato said that a key driver of its gross order value (GOV) growth in the quarter was the growing adoption of Zomato Gold, which is continuing to drive higher ordering frequency among its members. Around 40% of its GOV in the quarter was driven by Zomato Gold subscribers.
However, the company had also said that the Gold membership is less profitable than non-Gold and one of the main reasons for higher costs in the business is the no-delay guarantee benefit.
The food tech major has aggressively cut down it costs in the last two years to achieve and, subsequently, sustain profitability.
Following Swiggy’s model, Zomato introduced a platform fee for each order placed on the platform, which improved its take rates and margins. Currently, the company charges between INR 1-INR 5 as platform fee.
Shares of Zomato gained more than 100% last year after falling through most of 2022. The stock is currently trading at INR 135.6 on the BSE with minor drop in price on Monday (January 29).
