Zomato seems to have opened up its subscription service, Zomato Gold, to all users; contradicting the company’s originally announced plans to offer the service only via an invite-only model. On April 20, Zomato’s founder Deepinder Goyal announced that Zomato Gold, will become available by invite only following one last open flash-sale on 27th April. Two months later, the product is again open to every Zomato user — the invite-only announcement doesn’t seem to have panned out.

In a statement to MediaNama, Zomato spokesperson Naina Sahni claimed that the company reversed its decision after “receiving feedback” from partner restaurants that subscriptions for Zomato Gold should remain open to everyone who has Zomato installed on their phones. The company said meetings were conducted with partners after the announcement (and the subsequent flash sale). “Post closing the direct sales in the end of April,” said Sahni, “the one common theme/feedback was that all partners wanted more Gold members to visit their restaurants” she added.

Sales tactic?

Zomato’s backtracking on a major announcement for a highly successful product could be an effort to further drive sales. The announcement incentivised regular users to rush to subscribe to Zomato Gold by making the invite only announcement. “We realised we had been conservative in closing our memberships to public earlier, as we did not want to overwhelm our restaurant partners,” Sahni told MediaNama, “but after this feedback, we were confident of being on the right path.” Until approached by MediaNama, Zomato was completely silent on its reversal.

Launched in November 2017, Zomato Gold raked up 26,000 subscribers within a day of its launch. The product had garnered 200,000 subscribers by April 20 in five metro cities in India.

In terms of financials, Zomato Gold contributed nearly 12% to Zomato’s monthly revenue as of April 2018. In MediaNama’s previous coverage of the new service, we pointed out that one reason for the sharp growth is the fact that Zomato offers an extra month to users for each referral they get, and anyone who signs up with a referral code gets 25% off.

Sahni, the Zomato spokesperson, requested that the company’s statement be quoted in full for clarity.

Zomato Gold is one of our fastest growing businesses and is doing incredibly well for us. As you already know, Zomato Gold was launched in India in November last year and has received a tremendous response with over 300,000 paid subscribers and over 2200 partner restaurants. Besides the overwhelming user response to the membership program across the country, Zomato Gold has also seen an outstanding acceptance from the restaurant community. It has been a great initiative to help increase the overall business for our partners – for whom the objective is to get more people to dine out, more often.

In April the thought was to contain the number of Gold members for the foreseeable future so we could ensure that our partners were able to service the members well and our members had a good experience every-time they were at a partner restaurant. Post closing the direct sales in the end of April, when we conducted Zomato Gold summits for our partners in May, the one common theme/feedback was that all partners wanted more Gold members to visit their restaurants. As members dine out more the overall size of the industry goes up – and the fact is that the dining out segment has scope for much more growth than its current utilisation.

We realised we had been conservative in closing our memberships to public earlier, as we did not want to overwhelm our restaurant partners, but after this feedback we were confident of being on the right path. Users, of course love Gold and we had a long waitlist in all our cites. So in the last 30 days we worked hard to ramp up supply and add more partners and are now open for public purchase.

We also recently launched Zomato Gold in Jaipur on the 30th May and will soon extend the offering to Chennai, Kolkata, Ahmedabad and Chandigarh as well. The product which is currently available in India, UAE and Portugal, is slated to launch in Australia, Philippines and Indonesia later this year.