Online food delivery platform Swiggy has indefinitely suspended its subscription service Super that was aimed at retaining customers and rewarding loyalty, sources said, as the coronavirus and lockdown continues to take a toll on business.
Current Swiggy Super subscribers can avail the service but new subscriptions and renewals have been withdrawn. An attempt to renew the membership leads to a page that says, “We ran out of subscriptions, will be back with more soon”.
“The programme stands suspended as of now. Internally there is no clarity yet when it will be brought back, if at all, or if the company will move into any other form of membership product,” said a source. The person spoke on condition of anonymity as he is not authorised to speak to the media.
Swiggy did not respond to Moneycontrol’s queries on the reasons for the move.
Swiggy Super was launched in 2018 as a response to Zomato’s subscription offer Zomato Gold.
Unlike Gold, Super was designed for home deliveries and meant to encourage repeat orders. Gold started as a dine-in offer but was later extended for deliveries as well.
Zomato has offered Gold customers a six-month extension
Super, on the other hand, was meant to encourage repeat orders and to ensure customers stayed with the Bengaluru-based firm at a time when Uber Eats and Zomato were trying to aggressively capture market share.
In January 2020, Zomato acquired Uber Eats in India.
“Our consumer surveys had shown that Swiggy Super was really liked by the consumers and the price at which it was initially offered was extremely attractive,” said an industry consultant who tracks food delivery as a sector.
“There was a significant share of deliveries happening on Super before COVID-19 upset all the plans for this sector.” COVID-19 is the respiratory illness caused by the coronavirus.
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Swiggy did not share the number of Super users. The company had significantly hiked its Super charge in January 2020.
The monthly plan available at Rs 79 was hiked to Rs 149 and the three-month charge was almost doubled to Rs 349 from Rs 179 but it seems it didn’t make the vertical sustainable.
“Running an offer for free deliveries at a time when consumers are ready to pay delivery charges is not a great business idea. Also, we were not being able to guarantee the ordering experience of our pre-COVID-19 days,” said the source quoted first.
Multiple restaurants have been shut and the company is still short of its delivery fleet in several cities as lockdown restrictions vary from state to state.
While restaurants have just started deliveries, industry insiders say overall order volumes are down more than 40 percent.
Zomato is confident that when things get normal, its users will find value in Gold while eating out. The company is already stressing on a “contactless” dining experience.
“We do believe that once the situation eases, while there would be a keen focus on safety and hygiene, users will want to use their gold memberships for dining as well. We are working on a combined offering of both Gold and contactless dining to render a safe and seamless dining out experience for users,” said Gupta.
The company did not share the number of Gold subscribers but said 26,300 users renewed membership in April.
The Gurgaon-based company gave Rs 2.64 crore, earned through membership fees, to support 3,200 restaurant workers from 390 restaurants.
The two food delivery majors in India seem to be looking at their subscription models differently.
“There is a difference between the two programmes. On Zomato Gold, consumers get to order more from their partner restaurants, while on Swiggy, they were getting free deliveries. No wonder the two companies have taken two different trajectories in these critical times,” said Rohan Agarwal, director at startup advisory firm Redseer.
Before the pandemic hit the industry, Swiggy and Zomato were aggressively chasing market share in food delivery.
Strategies like flat discounts on all orders, attractive subscription packs and expansion of cloud kitchens were various parts of the jigsaw puzzle for market dominance.
But the viral outbreak has forced a reality check, pushing these startups into a cash-conservation zone.
“This had to happen. These companies were running aggressive campaigns which made no business sense. No wonder now they are bringing down costs by stopping offers and subsidised subscriptions. I am sure there are more changes to come,” said the founder of a cloud kitchen startup that works with the delivery platforms.
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