Zomato discontinues premium membership, aims to craft a new programme

Food delivery firm Zomato said on Monday that it is going to discontinue its 'Pro' and 'Pro Plus' programmes for its consumers. The Deepinder Goyal-led firm introduced Zomato Pro and Zomato Pro Plus by upgrading its Zomato Gold programme to Zomato Pro in 2020. The Gurugram-based firm is now closely working with its customers and restaurant partners to craft a new programme.

“While Zomato Pro and Pro Plus have been loved tremendously by our customers and restaurant partners, we want it to be even more beneficial, especially for the most engaged customers and restaurant partners. We are taking feedback and working closely with our customers and restaurant partners to craft a new program. Meanwhile, we are not onboarding new members and restaurant partners to Zomato Pro and Zomato Pro Plus,” said a Zomato spokesperson.”

The benefits of the Pro pack included discounts on food delivery and dine-in at the company's partner restaurants. The platform has also revised its terms with the co-branded credit card with RBL Bank. It has decided to cap the cashback on orders placed via the bank's credit card. However, the app has decided to add the spending done on the Blinkit app to the cashback scheme.

“While active members can continue to get their benefits as promised, they will not be able to extend/renew their memberships once their membership tenure expires. Once again, we are humbled by the love customers have shown towards Zomato Pro and Zomato Pro Plus, and we promise to come up with a bigger, better experience very soon,” said the Zomato spokesperson."

The development comes at a time when Zomato acquired quick commerce company Blinkit on June 29 for Rs 4,447 crore in an all-stock deal. Blinkit was earlier known as Grofers. According to the sources, the company is focusing more on its quick commerce strategy and may include the services of Blinkit as part of the new programme that it plans to launch. Moreover, the company is also looking beyond its loyalty programmes and aiming at introducing newer use cases, which may lead current offline spending on restaurant food moving on to its platform. 

Deepinder Goyal, founder and chief executive officer (CEO), Zomato, said that the total commerce market in India is valued at $1.3 trillion and in the long term, quick commerce is seen emerging as a significant channel of demand for customers at least in the top cities.

“This foray into the next big category (quick commerce) is timely as our existing food business is steadily growing towards profitability,” Goyal said in a blog post.

In the shareholders’ letter dated February 2022, Zomato shared that it will invest up to $400 million in quick commerce in CY22 and CY23. Goyal had said that quick commerce is a natural extension of food delivery. Zomato expects the journey to profitability to only accelerate the post-Blinkit deal.

Discontinuing the current Zomato Pro service may also be a strategy to control cash burn, according to the sources. The company reported a consolidated loss of Rs 186 crore in the first quarter of 2022-23 (Q1FY23). The company's losses declined both on a year-on-year (YoY) and sequential bases. The company’s consolidated loss was Rs 359 crore in Q1FY22 and Rs 359.7 crore in Q4FY22.

Zomato's chief rival in India, Swiggy, runs a similar loyalty program called Swiggy One. It was launched in November 2021. The single-tier membership programme offers unlimited free deliveries from over 70,000 popular restaurants. This also includes unlimited free Instamart deliveries on all orders above Rs 99. 

Recently, Swiggy said that it is offering three new benefits in its membership programme. The firm said Swiggy One will give users unlimited free deliveries on deliveries from restaurants as far as 10 km, and for orders starting at Rs 149.

On Swiggy Instamart, members can save more with exclusive offers on 1,000 products in categories ranging from daily essentials, fruits and vegetables, baby products, personal care, home utilities, and cleaning items.

Additionally, members can avail extra discounts of up to 30 per cent on their food orders from partner restaurants. Swiggy One also had plans to extend its members discounts on Genie deliveries as well.

According to the sources, the company is now also planning to integrate the services and various offerings of Dineout, the leading dining out and restaurant tech platform, under Swiggy One. In May this year, Swiggy acquired Dineout for an undisclosed amount. Dineout brings with it an industry-leading network of over 50,000 restaurant partners.