3 days Ago
Zomato and Swiggy are seeing a significant share of orders driven by their loyalty programme users—and the two food and grocery delivery majors are now beginning to monetise this growing subscriber base. ET Year-end Special Reads How India's political landscape changed after assembly polls in eight states Trent, Zomato among 33 biggest wealth creators this year. What will make money in 2025? Telcos investment recovery in limbo, price war with satcom services likely in 2025 For Zomato, its subscription programme Gold now accounts for more than 50% of its food delivery orders, while subscribers of Swiggy’s One membership plan spend more than three times as much on the platform as non-members.
According to the latest numbers publicly shared by the companies, Zomato Gold had 7.4 million subscribers as of March 31, 2024, while Swiggy One had 5.7 million members as of June 30.
Swiggy recently launched One Blck – a premium loyalty programme, which is priced higher than the mid-tier One and entry-level One Lite. To be sure, while Zomato’s Gold subscription programme is only for food delivery and dining out, Swiggy’s One extends to quick commerce and other offerings. Despite driving sales growth, loyalty programmes begin to erode margins after a point because of the discounts, free deliveries and other such offerings, industry analysts and executives said.
Artificial Intelligence(AI) Java Programming with ChatGPT: Learn using Generative AI By - Metla Sudha Sekhar, IT Specialist and Developer View Program Artificial Intelligence(AI) Basics of Generative AI: Unveiling Tomorrows Innovations By - Metla Sudha Sekhar, IT Specialist and Developer View Program Artificial Intelligence(AI) Generative AI for Dynamic Java Web Applications with ChatGPT By - Metla Sudha Sekhar, IT Specialist and Developer View Program Artificial Intelligence(AI) Mastering C++ Fundamentals with Generative AI: A Hands-On By - Metla Sudha Sekhar, IT Specialist and Developer View Program Artificial Intelligence(AI) Master in Python Language Quickly Using the ChatGPT Open AI By - Metla Sudha Sekhar, IT Specialist and Developer View Program Marketing Performance Marketing for eCommerce Brands By - Zafer Mukeri, Founder- Inara Marketers View Program Office Productivity Zero to Hero in Microsoft Excel: Complete Excel guide 2024 By - Metla Sudha Sekhar, IT Specialist and Developer View Program Finance A2Z Of Money By - elearnmarkets, Financial Education by StockEdge View Program Marketing Modern Marketing Masterclass by Seth Godin By - Seth Godin, Former dot com Business Executive and Best Selling Author View Program Astrology Vastu Shastra Course By - Sachenkumar Rai, Vastu Shashtri View Program Strategy Succession Planning Masterclass By - Nigel Penny, Global Strategy Advisor: NSP Strategy Facilitation Ltd. View Program Data Science SQL for Data Science along with Data Analytics and Data Visualization By - Metla Sudha Sekhar, IT Specialist and Developer View Program Artificial Intelligence(AI) AI and Analytics based Business Strategy By - Tanusree De, Managing Director- Accenture Technology Lead, Trustworthy AI Center of Excellence: ATCI View Program Web Development A Comprehensive ASP.NET Core MVC 6 Project Guide for 2024 By - Metla Sudha Sekhar, IT Specialist and Developer View Program Marketing Digital Marketing Masterclass by Pam Moore By - Pam Moore, Digital Transformation and Social Media Expert View Program Artificial Intelligence(AI) AI-Powered Python Mastery with Tabnine: Boost Your Coding Skills By - Metla Sudha Sekhar, IT Specialist and Developer View Program Office Productivity Mastering Microsoft Office: Word, Excel, PowerPoint, and 365 By - Metla Sudha Sekhar, IT Specialist and Developer View Program Marketing Digital marketing - Wordpress Website Development By - Shraddha Somani, Digital Marketing Trainer, Consultant, Strategiest and Subject Matter expert View Program Office Productivity Mastering Google Sheets: Unleash the Power of Excel and Advance Analysis By - Metla Sudha Sekhar, IT Specialist and Developer View Program Web Development Mastering Full Stack Development: From Frontend to Backend Excellence By - Metla Sudha Sekhar, IT Specialist and Developer View Program Finance Financial Literacy i.
e Lets Crack the Billionaire Code By - CA Rahul Gupta, CA with 10+ years of experience and Accounting Educator View Program Data Science SQL Server Bootcamp 2024: Transform from Beginner to Pro By - Metla Sudha Sekhar, IT Specialist and Developer View Program This is pushing platforms to consider monetising this high-frequency user base , they said. Discover the stories of your interest Blockchain 5 Stories Cyber-safety 7 Stories Fintech 9 Stories E-comm 9 Stories ML 8 Stories Edtech 6 Stories So far, Swiggy and Zomato have tied up with brands such as Ajio, Uber, Hotstar, Amazon Prime, Cleartrip and Yatra2, offering discount coupons to their loyalty programme subscribers. For the platforms, these tie-ups essentially translate into ad revenues.
“These benefits are designed to be better and more useful for the customers than the usual scratch card rewards,” a senior executive at one of the food delivery platforms said on condition of anonymity. “Essentially, when a platform is trying to pull the customer to buy a three- or six-month subscription, it is important to stand out. For us, these users drive a very sizeable portion of the growth, and it becomes a natural expectation that they will get rewarded with more than what meets the eye.
” The person said the platforms have been increasing platform fee and bulking up ad revenues to improve margins. “But the discounts and free deliveries provided to customers of loyalty programmes begin to skew the profitability negatively after a point..
.and this is a very high frequency user base that comes. At some point, as a platform, you also need to differentiate your offerings,” the executive said.
“That’s where these added benefits come in.” Going ahead, these users could be potentially targeted with more personalised products and benefits depending on their consumption patterns, the executive added. Zomato and Swiggy did not comment.
While quick commerce has become the fastest-growing segment for both the firms, food delivery continues to contribute the most to their topline and is also the most important driver of profitability. More so at a time when intense competition and rapid expansion plans in quick commerce is pushing these platforms to undertake high rates of cash burn. “To get growth with a balance of being profitable is very important for these companies,” said Karan Taurani, senior vice president, Elara Capital.
“One of the ways this comes is from a high-frequency customer base. It makes sense to offer discounts and benefits to these (high frequency) customers because they will compensate for the same through a higher number of orders,” he said. According to a recent research note by BofA Global Research, Zomato had over seven million daily active users on its app in November, while Swiggy had nearly six million.
The brokerage firm cited data from Sensor Tower. “Swiggy has been trailing in terms of market share for food delivery..
.but the launch of its loyalty programme in 2021 has been important to help it not lose any more ground to Zomato,” another executive said. Brokerage firm Motilal Oswal in November had noted that Zomato leads the food delivery segment with a 58% market share against Swiggy’s 42%.
.
