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Zomato suspends Pro membership programme, users cry foul

Moreover, Zomato Edition Black credit card users, who get 5 per cent cashback at F&B establishments currently, will get only 1 per cent cashback from September

Zomato suspends Pro membership programme, users cry foul
POSTED ON August 22, 2022 5:31 PM

Zomato regulars who used their Pro and Pro Plus membership to avail of discounts while ordering in or dining out were in for a surprise when they decided to renew their subscription over the past few days. The food aggregator has put membership renewals on hold for the immediate future. 

Replying to complaints from users on social media, the Gurgaon-based food tech platform tweeted, "Please allow us to inform you that Zomato Pro/Pro Plus is unavailable for renewal as we are working on a new experience for you. We will get back with an update soon. We'd also like to thank you for being a part of the Zomato Pro program." 

It did not reveal any details about this upcoming programme nor was any information provided on its app about the forthcoming offerings. However, this development has got the goat of many users who paid for the Pro subscription, which costs Rs 200 for a 3-month membership and Rs 750 for an annual one. 

Many a Twitterati vented their ire about this suspension, including @sanwat. He questioned, "What about #zomatopro and pro plus, which was complementary with this card? We are hearing news that pro and pro plus are gone now from Zomato side. You are selling this card on this USP. where is the USP now?"

Saurabh Chhabra and Anurag Srivastava, who tweet using the Twitter handles @CASaurabhChabra and @Anuragclicks, respectively, claimed they had renewed their Swiggy membership after failure to renew their Zomato Pro membership. Apparently, the company had not planned for this aftermath of its decision to stop membership renewals and its ripple effect on its food delivery business, which remains its mainstay.

According to its June 2023 quarter reports, two factors largely drove Zomato's revenue growth. The first was a 10 per cent quarter-on-quarter growth in Gross Order Value (GOV) to Rs 64.3 billion in Q1FY23, while the second was growth in revenue per order. 

In his letter to shareholders, the company's founder and CEO, Deepinder Goyal said, "GOV growth was, in turn, driven
by robust growth in order volumes and mild growth in average order values as compared to the previous quarter. On the profitability front, the food delivery business hit an important milestone last quarter by getting to Adjusted EBITDA break-even. Contribution as a percentage of GOV increased to 2.8 per cent in Q1FY23 as compared to 1.7 per cent in Q4FY22 driven by improvements on both cost and revenue side." 

Zomato Pro was rolled out in June 2020 to replace the company's erstwhile membership programme, Zomato Gold. It offered additional discounts on home delivery orders, which saw a huge uptick during the COVID-induced lockdowns, along with up to 40 per cent discount on dining out bills. Till August 2021, the company had 1.8 million Pro users. 

A month ago, Zomato started pilot dine-in projects in Hyderabad

What's Cooking At Zomato?

The food delivery platform's value-added portfolio included a Zomato Edition Black credit card. These customers were automatically upgraded to Zomato Pro Plus in August 2021, while others had to buy the upgrade from the app.  

A recent Zomato notification has also underlined some new developments that the unicorn is undertaking. A recent Zomato app notification read, "We hope you are enjoying use of your exclusive Edition Classic Credit Card. This is to notify you regarding updated benefits on your card as given below effective September 20, 2022." The cashback structure further states that users can earn 5 per cent cash on spending done on Zomato and Blinkit app (up to 500 Edition Cash per day) and 1 per cent edition cash on what they spend everywhere else. 

This means that while users would get 5 per cent cashback at F&B establishments like restaurants, bars and cafes, would get only 1 per cent cashback come September. This has not gone down well with existing customers. 

Aditya Shah, a Zomato Pro Plus who often used the credit card while dining out, claimed that the 5 per cent cashback was its most lucrative feature. "I did start using it for grocery spends once in a while, but never on Blinkit. I would not have minded this intervention from Zomato, but I am upset with the company's decision to stop renewals suddenly. I expect this decision will result in a massive drop in usage on the app and card spend," he claimed. 

A month ago, Zomato started pilot dine-in projects in Hyderabad, offering users almost a 25 percent discount if they chose to pay their food bills through the Zomato Pay app. This loyalty programme was envisaged to draw more diners to F&B establishments by rewarding them for frequent use through cashback and in-app points.

However, restaurants and hoteliers have not warmed up to this concept of routing payments through the platform's app. Many are worried that the onus of these discounts will fall on them. Moreover, they are unclear how the programme's rollout will result in increased footfalls for their outlets.   

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