In a recent update, the Food delivery major, Zomato seems to have given a full stop while offering ‘on-time guarantee’ benefits for its ‘Gold’ loyalty programme.
No More On-Time Guarantee
You will get to see this if you have purchased or renewed membership from November 25, 2023.
Please note that the Zomato’s existing Gold members are still offered the benefits till the time they renew their subscriptions, according to the media report.
For the unawares, this ‘on-time guarantee’ delivery feature by food delivery majors ensures that users receive an order within a stipulated time.
If it doesn’t happen then they will be given a coupon for the ordered amount which the users can use next time while placing the order.
Inc42’s email to Zomato to confirm the development did not elicit a response till the time of publishing the article.
Interestingly, the ‘on-time guarantee’ benefits the section is now unavailable for users who are looking forward to buying the new memberships.
Just last year, Zomato relaunched the Gold loyalty programme as it had revised the offers and discounts offered to customers.
Why Would This Happen?
Several investors were worried when Zomato had discontinued its loyalty programme Pro Plus membership in August 2022 as they thought that company would lose its users to competitor Swiggy.
When it relaunched this program in November 2023, Zomato Gold’s total number of members touched 38 Lakh.
Presently, Zomato Gold membership is priced at INR 999 for three months.
Besides this, the food delivery giant has also come up with a loyalty programme to users at a discounted rate of INR 149-INR 99 for three months.
The firm also offers a 14-day free trial for new users.
Interestingly, Zomato Gold continues to compete with Swiggy One, which incidentally never had any such ‘on-time guarantee’ scheme as Zomato.
We can not deny that the re-launch of the Zomato Gold programme has played a major role in driving the company’s growth during the last few quarters.
Indicating the same, the company achieved profitability for the first time in Q1 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, during its last reported quarter, Q2 FY24.
It appears that almost 40% of its GOV in the quarter was driven by Zomato Gold subscribers.
But, the company also confirmed that the Gold membership is less profitable than non-Gold.
So, one of the main reasons for higher costs in the business is the no-delay guarantee benefit.
Subsequently, Zomato has aggressively cut down its costs during the last two years in order to achieve and, subsequently, sustain profitability.
Besides this, Zomato has also introduced a platform fee for each order placed on the platform following Swiggy’s model.
This has definitely helped in improving its take rates and margins.
