ET had reported on February 19 that the firm was experimenting with Zepto Pass for select users.
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The membership, priced at between Rs 149 and Rs 299 per month for various users, will allow for free deliveries of orders above Rs 99.
The service will also provide additional discounts for orders costing above a certain threshold, ranging from Rs 299 to Rs 599 for most users. It will also cover orders from Zepto Cafe, the firm’s snacks and beverage vertical.
“Over the discount threshold, we are offering prices comparable to discounted offline grocers like DMart… the threshold is determined by a number of user behaviour metrics that will make it tailor-made for individual users,” said Devendra Meel, vice president of strategy and head of Zepto Pass.
With ‘Pass’, Zepto has become the second quick-commerce firm after Swiggy Instamart to offer subscription benefits. Swiggy’s listed rival Zomato, on the other hand, does not extend benefits from its Gold subscription to its quick-commerce service Blinkit.
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Zepto is heavily discounting the offering for the initial take up, pricing it between Rs 19 to Rs 39 for most users. “Pass will obviously hit our profit and loss sheet initially, but even with the hit we are confident of turning profitable at an earnings before interest, taxes, depreciation and amortisation (Ebitda) level in the next two quarters,” cofounder and chief executive Aadit Palicha told ET.
In the pilot programme, Pass users increased their average spend by over 30% compared to non-pass users, Meel said. The firm expects to take on 1 million Pass subscribers in the first month from launch, he added. Zepto has about 5 million registered users.
“We expect the growth through Pass to be cheaper than through pure marketing spend… eventually Pass will be bringing in a large chunk of the overall business,” Meel told ET.
For food delivery and quick commerce firms, subscription is emerging as an important tool for boosting usage and user loyalty.
Zomato, in its report for the June quarter, had said its ‘Gold’ programme contributed more than 30% of the total gross order value (GOV) of its food business, which for the quarter stood at Rs 7,318 crore.
Swiggy, on the other hand, has been trying to expand its ‘One’ subscription by bundling it with telecom subscriptions and banking products such as credit cards.
“We want to become the main grocery destination for all of our users by offering them the best prices available… we also want to use this service to bump up average spend per customer,” Palicha said.