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Zomato Launches Gold For Delivery; Restaurant Body Protests Strongly

Zomato Launches Gold For Delivery; Restaurant Body Protests Strongly

Zomato Gold is an exclusive dining-out membership programme

For Gold on Delivery, the company has added another 13000 restaurants

Zomato had altered terms of Gold membership for dining out last week

Gurugram-headquartered foodtech unicorn Zomato, though, was embroiled in a major conflict with restaurants and associations over the last month, refuses to let it hamper its growth. To keep the business up and running, the company has expanded its Gold offering to its food delivery options.

Launched in 2017, Zomato Gold is an exclusive dining-out membership programme with a monthly or yearly subscription plan. Members can avail complimentary meals and drinks at select restaurants across cities. Zomato claims to have well over 1.1 Mn members and over 6000 restaurant partners.

Extending Zomato Gold to online food delivery was being speculated for quite some, however, with the last month’s #logout campaign by restaurant partners and National Restaurant Association of India (NRAI), it is indeed a bold move by the company.

Zomato Gold On Delivery: The Plan

The company has said that existing and new Zomato Gold members will be able to use the benefits of Gold for home delivery orders now. For Gold on Delivery, the company has added another 13000 restaurants.

The programme has been launched in 16 cities starting on Friday. By next week, the company said the program will expand to 25 more cities including Agra, Amritsar, Aurangabad, Bhopal, Mangalore, Mysore, Nashik, Patiala, Patna, Raipur, Ranchi, Surat, Udaipur, Vadodara, Varanasi, among others. In all, it will be available in over 40 cities over the next few days.

Existing members of Zomato Gold will have access to food delivery privileges for no additional charges along with some FUP (Fair Usage Policy) revisions in their existing membership. Existing members will be limited to two “unlocks” per day (one dining-out and one delivery). Membership will also be limited to a single device per person.

Gold on Delivery will offer the second-highest priced item on the order free, except for in the case of combos, MRP items and special dishes. It will only apply on minimum order value of INR 300 with discount capped to INR 300 per order. Zomato’s Gold membership is priced at Rs1800 for an annual package.

Another interesting rule herein is that “Zomato reserves the right to add exclusion days to Zomato Gold on Online Ordering at its discretion which will be communicated from time to time.”

This is understandably addressing the concerns of restaurateurs who had earlier said that heavy discounts on events such as weekends become costly for them. Zomato Gold may be used by the company on heavy rush days, thus, supporting restaurants but definitely aggravating customers.

“Today, Gold drives 25-30% business for its restaurant partners and more and more Gold users (90%) are exploring new restaurants because of the program. It, therefore, makes eminent sense to extend this discovery behaviour to the delivery restaurant base,” said Gaurav Gupta, cofounder and COO, Zomato.

However the National Restaurant Association of India (NRAI) was not pleased with the new development and issued a strong statement of protest. “Launch of Zomato Gold on delivery is a desperate attempt by Zomato to shore up the sinking fortunes of their flagship Zomato Gold programme. It is also another instance of Zomato changing the goalpost,” NRAI said.

Troubles With Zomato Gold

It is to be noted that ahead of a second meeting with NRAI, Zomato had altered the rules of Zomato Gold for dining out last week.

The company had silently updated terms and conditions saying that Zomato Gold offers can be redeemed only once in a day by a Zomato Gold subscriber. Further, only one offer can be redeemed between two Zomato Gold members on a table. Zomato has also limited Gold members to a maximum of two (2) redemptions per table, no matter how many diners are present and regardless of how many of them have Gold membership. Here’s the new eligibility matrix, as seen on Zomato’s website.

During the #logout campaign, the restaurants listed on the food aggregator had called out Zomato for eating into their margins through Gold and Infinity Dining feature, which provided heavy discounts. The association had highlighted issues such as “unreasonably high commissions, payment terms and arbitrarily applied additional charges” that restaurants have been charged to be a part of Zomato Gold.

The response and how the company manages the angry voices from users will be crucial in the short to medium term, especially as Zomato is still recuperating from recent controversies over food deliveries, layoffs and angry restaurants.

A recent YouGov survey noted that Zomato’s Buzz which measures whether one has heard something positive or negative about the brand in the past two weeks, declined steadily due to the mounting controversies and saw a fall of 6.8 points, i.e. from 42.7 in the beginning of July to 35.9 in August end.