Zomato working on new ‘differentiated’ loyalty programme, says Deepinder Goyal

Zomato, which discontinued its premium membership programmes Pro and Pro Plus earlier this year, is creating a new loyalty and rewards service for customers. 

While addressing a shareholder complaint during its September quarter (Q2 FY23) earnings call, Zomato CEO Deepinder Goyal said, “Discontinuing the loyalty programme was a business call. We are aware of what competition is doing, and we are working on creating something which is more differentiated so we get customer loyalty without losing a lot of money.” 

“Please wait and watch,” he added. 

Zomato stopped renewals for its Pro (launched in 2020) and Pro Plus (launched in 2021) programmes in August. The foodtech operator, however, shared that customers whose memberships are yet to expire continue to use the service. Pro members earn discounts as well as offers from Zomato-affiliated restaurants. “Old members are using Zomato Pro Plus till their memberships expire. We also haven't seen much fall in the frequency of orders post the expiry of memberships,” Goyal revealed. 

Zomato’s arch rival Swiggy offers the Swiggy One membership for its food delivery as well as instant grocery (Instamart) service. In June, Swiggy ramped up One by offering unlimited deliveries from all restaurants in a 10-km radius. Most recently, it also upped the starting price of a Swiggy One membership from Rs 299/3 months to Rs 549/3 months.

Interestingly, Zomato believes there’s no correlation between the lower app opens it recorded in the September quarter to the discontinuing of its loyalty programmes. Zomato CFO Akshant Goyal said, “We saw lower app opens in the last quarter than in the past quarter, which means lower intent to spend in a category like ours. It is because of the general macro [environment]. And this quarter also coincides with highest rains, which typically lead to more muted growth. But this does not impact our long-term view. We remain bullish on the potential of this business.” 

The frequency of orders may have gone down “slightly”, but the share of power users remained the same, according to Zomato. “We will not compromise on good quality growth to get to break-even faster even if the Street wants it,” Akshant added. 

On Thursday, Zomato reported its Q2 earnings, narrowing its quarterly loss to Rs 251 crore, while its revenues jumped 62 per cent. The stock climbed 13.6 per cent to close at Rs 72.65 on the BSE on Friday.
 

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