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Zomato launches a subscription service in Dubai and Abu Dhabi

Zomato has launched a subscription membership plan called Zomato Gold in Dubai and Abu Dhabi where users can buy a 3-month, a 6-month, or a 12-month plan. Zomato Gold will allow users to buy two drinks for the price of one at any day or time. Membership plans start at 99 dirhams (around ~ Rs 18) and covers over 200 restaurants, bars and lounges.

The membership will come to Delhi, Mumbai and Bangalore somewhere in June. “We will decide launch dates for other international cities depending on what we learn over the next few weeks/months. Our Melbourne, Johannesburg, and Istanbul teams are waiting eagerly to launch Zomato Gold in their cities,” Pankaj Chaddah, co-founder of Zomato said in a blog post.

The company added that there will be no restriction on the drinks people can order through the membership and is applicable to the entire drinks menu.

Note that Zomato Gold was launched in Lisbon, Portugal last week but the membership will only apply to food i.e. members will be able to order a dish for two people for the price of one.

The membership programme is an interesting approach Zomato has taken to monetizing and will add a new revenue stream. The company’s revenue comes from listing services and online food delivery currently. It reported operational revenues of Rs 184.97 crore for the fiscal year 2015-16 compared to revenues of Rs 96.7 crore in FY 15. This was  a growth of 91.28%.

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Online food ordering accounts for 20% of Zomato’s revenues in India. The company charges a take rate of 8.2% for delivery for orders but for larger quick service restaurants, it stands around 6-7%. It makes around Rs 20 as a contribution margin the online order business in India.

Cab hailing application Ola has a similar subscription service called Ola Share Pass where users can take rides for Rs 40 in Bangalore.

Infrastructure services

Last month, Zomato launched infrastructure services for restaurants on a pilot basis in Dwarka. The infrastructure service will essentially provide partner restaurants with a kitchen in a city or location they aren’t based in, so they can sell food outside their home markets. The initiative will provide restaurants with kitchens, which will have to be manned by the restaurant’s employees. The hotels will share kitchens with four other players, with each restaurant getting around 300 sq ft of area for cooking. Zomato will also curate the institutions that will be allowed to use the kitchen service, although it mentions that restaurant will be free to walk away at any point.

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