Zomato Gold is a periodic subscription based membership, whereby the subscribing customers get significant discounts and free deliveries from the member restaurants.
Initially, it was mainly available on offline eating. However, later Zomato extended it to deliveries and that’s when member restaurants put up a significant protest because of which the scheme was altogether stopped in 2019.
Gold was replaced with a Pro membership, which however was less attractive from a customer’s perspective. Consequently, due to a muted response, Pro was also scrapped last year.
Zomato is now bringing back Gold. Restaurant association (NRAI), fearing it to be similarly detrimental to a restaurant’s profits, as in the previous avatar, is asking it’s over 5,00,000 restaurant members not to sign up and instead increase focus on own loyalty programmes through other apps.
(NRAI also had plans to launch a loyalty programme app of its own amid an escalating face-off between restaurants and delivery aggregators Swiggy and Zomato over alleged deep discounting, data masking and violation of platform neutrality. However, this is easier said then done. Running apps seems easy but is not.)
How will this unfold?
No one knows.
Fact remains that for food aggregators like Zomato (and Swiggy), path to profitability seems much more difficult than initially estimated.
Every one thought, that customers would pay premium for convenience. But that doesn’t seem to be so.
When aggregators try to attract customers through discounts, restaurants for obvious commercial reasons detest.
And then there is the problem of significant delivery costs involved for every order.
Striking a balance between restaurant’s profitability, customer’s delight of convenience and pricing, and managing own profitability seems a herculean task as of now.
In December 2022 qtly results, the management has highlighted the following –
In less than a month, the Company claims that Gold program has scaled to 9 lakh+ members.