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Business News/ Companies / News/  Zomato revises Gold scheme, but eateries to stay logged out

Zomato revises Gold scheme, but eateries to stay logged out

A key change includes curbs on usage of the Gold scheme to one restaurant per day
  • Zomato also puts a cap on the number of Gold unlocks per table, restricting it to 2
  • A file photo of Zomato CEO Deepinder GoyalPremium
    A file photo of Zomato CEO Deepinder Goyal

    NEW DELHI : Zomato has agreed to revise its Gold programme, tightening the noose around the way members can use the popular platform, a day after the National Restaurant Association of India (NRAI) pressed food dining aggregators to put an end to steep discounting on dine-in offers.

    The NRAI has, however, refused to accept Zomato’s changes calling them a “reconstruct of gold" in what can be seen as an escalation of tension between the company and the restaurant association that represents half a million members.

    Zomato Gold is a paid membership scheme that offers complimentary food and drinks to diners.

    Zomato is modifying the Gold programme after talks with the NRAI managing committee, and members of other restaurant associations, who complained that such offers were disrupting the industry with deep discounting, Deepinder Goyal, founder and chief executive officer (CEO) of the company, said in an e-mail to restaurant partners on Wednesday evening.

    The key changes include Zomato restricting the use of the Gold membership to one unlock per day. It has also capped the number of Gold unlocks per table, restricting it to two. An unlock is an offer that can be availed at an outlet.

    In his e-mail, Goyal has also urged restaurant partners who had logged out of its Gold scheme last week to sign back before 26 August. Zomato will roll out the changes before 15 September. These will be applicable to the 1.1 million existing members of Gold, as well as new members. The programme has 6,500 restaurants as partner members.

    Zomato’s move comes after more than 2,000 restaurants across India pulled out so far of reservation- and membership-driven dining apps, including EazyDiner (Prime), Zomato Gold, Dineout, nearbuy and magicpin. The move that started last week and is called #Logout is led by the NRAI and is largely aimed at ending steep discounting by such platforms, which the NRAI says is hurting business.

    “The biggest pain point we heard was that users hop between places on a busy evening, claiming 1+1 starters at one place, 1+1 main course at another, and 2+2 drinks at some other. To solve this, we will limit Gold usage by a single user to one unlock per day," Goyal said. The move was to ensure that customers complete their dining experience at a single restaurant and will help bring down the net effective discount, he said.

    The firm has also laid down new rules to curb multiple Gold unlocks per table. “We are going to restrict the number of unlocks to a maximum of two per table," he added. Currently, two guests are needed for one Gold unlock without any restrictions on the number of members and Gold unlocks per table.

    Interestingly, Zomato has also axed Gold ID sharing, a practice used by many users. “Login sharing of Gold IDs leads to two things: orders that shouldn’t be discounted get discounted and for large tables, it leads to illegitimate Gold unlocks on a single table thus leading to more discount per table. We will restrict a user’s login ID to a single mobile device at a time so that login sharing becomes impossible," Goyal noted in his e-mail.

    Zomato has also promised other marketing incentives for restaurants with high usage of the scheme. It also said the Gold membership will now be sold to diners at a flat annual subscription of 1,800, doing away with other packages priced under 1,000. Zomato has also discontinued trial packs of Gold. “Please understand that we cannot come up with a one size fits all answer here. We will understand if you want to stay out of the Gold programme if it still doesn’t work for your business," the e-mail said.

    Goyal said the restaurants that had delisted will not need to pay additional sign-up fee as mandated earlier.

    Consumers have so far enjoyed the Gold scheme that came at a time when India’s young population is increasingly socializing over food and drinks. However, restaurants owners have been unhappy for a while complaining that such offers are leading to steep discounting in a market that is already burdened with higher taxes, and fixed costs such as rentals.

    Members of the NRAI, however, said they will continue with #Logout as a mark of protest against discount-driven dining apps. “This is a knee jerk reaction to the #Logout movement," the NRAI said.

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    Suneera Tandon
    Suneera Tandon is a New Delhi based reporter covering consumer goods for Mint. Suneera reports on fast moving consumer goods makers, retailers as well as other consumer-facing businesses such as restaurants and malls. She is deeply interested in what consumers across urban and rural India buy, wear and eat. Suneera holds a masters degree in English Literature from the University of Delhi.
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    Published: 21 Aug 2019, 09:24 PM IST
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