Food delivery platform Zomato has modified its loyalty program, Gold, by discontinuing the ‘on-time guarantee’ benefits for memberships purchased or renewed from November 25, 2023.
According to sources, existing Gold members will still receive the benefits until renewal.
The Gurugram-based company implemented the ‘on-time guarantee’ feature in 2019, exclusively for members of the Gold program at selected restaurants. In instances where the food failed to be delivered within the specified time, the company offered customers a discount coupon for their next order. This service was later extended to include Gold members when the program underwent a relaunch in January 2023.
Swiggy, Zomato’s primary competitor in the food-delivery sector, offers its own subscription service called Swiggy One. This service extends benefits across various domains, including food delivery, quick commerce, and parcel deliveries, offering perks such as discounts and free delivery.
Queries directed to Zomato yielded no response.
Zomato prices the Gold membership at INR 999 for three months but extends discounted rates of INR 149 or INR 99 for the same duration to users. Similarly, Swiggy prices its One loyalty program at INR 1,299 for three months but also offers it at a discounted rate.
In October last year, Swiggy introduced a more economical version of its loyalty program named Swiggy One Lite. It was launched at an introductory price of INR 99 for three months, featuring limited benefits compared to the main program.
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Over the course of its relaunch in January last year, the Gold membership has evolved into a crucial component of Zomato’s service offerings, playing a substantial role in boosting the company’s sales.
Nevertheless, it needed some adjustments to minimize its impact on the overall profitability of the company, as reported earlier.
Around 40% of the gross order value in the quarter ending in September 2023 was generated by users with Gold subscriptions. During this period, the membership base for Gold witnessed a notable increase, rising from 2 million in the previous quarter to 3.8 million.
Despite the growth, the expansion of the Gold subscription program impacted margins, as stated in the company’s quarterly letter to shareholders. This was attributed to factors like the minimal delivery charges paid by Gold members.
The company has been scaling down some of its earlier initiatives, like Zomato Legends, which initially involved intercity food delivery. In specific cities, the program has been reduced, and the company has shifted its focus towards providing a delivery service for pre-stocked food items within a 60-minute timeframe.
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