On Thursday, Zepto, the quick-commerce unicorn, unveiled a membership program called Zepto Pass for all of its users.
Snackfax reported on February 19th that the company was experimenting with Zepto Pass for select users.
Continue Exploring: Quick-commerce unicorn Zepto launches Zepto Pass membership program
The membership, priced at between INR 149 and INR 299 per month for various users, allows for free deliveries of orders above INR 99.
The service will extend additional discounts for purchases meeting a certain threshold, ranging from INR 299 to INR 599 for most users. Additionally, it will include orders from Zepto Cafe, the company’s snacks and beverage division.
“Over the discount threshold, we are offering prices comparable to discounted offline grocers like DMart… the threshold is determined by a number of user behaviour metrics that will make it tailor-made for individual users,” said Devendra Meel, vice president of strategy and head of Zepto Pass.
By introducing ‘Pass’, Zepto has become the second quick-commerce company, following Swiggy Instamart, to provide subscription benefits. In contrast, Zomato, a competitor of Swiggy, does not offer benefits from its Gold subscription for its quick-commerce service Blinkit.
Continue Exploring: Swiggy competes with Zomato Gold with its new affordable Swiggy One Lite subscription plan
Zepto is significantly discounting the initial offering, pricing it at INR 19 to INR 39 for the majority of users.
“Pass will obviously hit our profit and loss sheet initially, but even with the hit we are confident of turning profitable at an earnings before interest, taxes, depreciation and amortisation (Ebitda) level in the next two quarters,” stated Aadit Palicha, cofounder and chief executive.
During the pilot program, Pass users raised their average spending by more than 30% compared to non-pass users, Meel remarked. He further stated that the company anticipates acquiring 1 million Pass subscribers within the first month of launch. Zepto currently boasts approximately 5 million registered users.
“We expect the growth through Pass to be cheaper than through pure marketing spend… eventually Pass will be bringing in a large chunk of the overall business,” Meel said.
Subscription models are increasingly recognized as pivotal tools for enhancing engagement and fostering customer loyalty within the food delivery and quick commerce sectors.
Zomato reported in its statement for the June quarter that its ‘Gold’ program contributed more than 30% of the total gross order value (GOV) of its food business, which amounted to INR 7,318 crore for the quarter.
Meanwhile, Swiggy has been endeavoring to broaden the reach of its ‘One’ subscription service by integrating it with telecommunications subscriptions and financial products like credit cards.
“We want to become the main grocery destination for all of our users by offering them the best prices available… we also want to use this service to bump up average spend per customer,” Palicha said.
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