It seems that food delivery company Zomato is starting to reclaim the market share it had lost to rival Swiggy in the second half of 2022. And the credit for that goes to its recently relaunched loyalty programme Zomato Gold.

A note by HSBC Global Research pegged Zomato’s market share at 55% and Swiggy’s at 45% for the first half of 2022, but that changed to 54% for Zomato and 46% for Swiggy in the second half.

Zomato’s market share has now risen to 56%in the January-March quarter, and is expected to increase further to 57% in the 12 months starting 1 April, the note says.

In January, Zomato finally relaunched its subscription-based membership programme Gold at an introductory price of Rs 149 for three months (the quarterly fee is Rs 999). The plan includes benefits like free deliveries, no delay guarantee and discounts while dining out.

This launch is the fourth iteration of Zomato’s original Gold membership programme, which was upgraded to Pro in 2020 amid protests from restaurant partners over allegations of deep discounting. The company had then launched Pro Plus in 2021, which it discontinued last year as it wanted to rework the entire programme.

While the programme has already started reaping benefits for Zomato, there may be a downside to it. The HSBC note says that the company could witness a negative impact on its contribution margin in the ongoing January-March quarter. “From 4QFY23 onwards, there will be a negative impact from Zomato Gold in the range of Rs 10-12 per order, which could concern investors. However, we believe Zomato will be able to offset this impact from its continued push for higher take-rates (commission) and lower costs,” it said.

It is important to note that Swiggy already runs a loyalty programme called Swiggy One. For now, however, Zomato should heave a sigh of relief. Amid rising pressures on profitability, the company has had to face the wrath of the restaurants over the past few weeks. Last month, it had increased its restaurant commission fee by 2-6%, according to an Economic Times report.

Meanwhile, Swiggy seems to have taken advantage of the situation. Just last week, the company said it will waive commissions from new restaurants for a month under a new initiative called Swiggy Launchpad. The company added that the restaurant partners can potentially save up to Rs 20,000 through this initiative.

In all this chaos, the HSBC report brings much-needed good news for Zomato.