Under pressure, Jabong decides to stop customer loyalty program

Online fashion retailer Jabong has emerged the worst performer among German investor Rocket Internet-backed firms. Under pressure to improve its bottom line, the company has decided to stop its customer loyalty program.

Through this program customers could collect points worth Rs 1 each every time they shopped on the platform. They were allowed to use these points to pay for future purchases. While customers cannot avail of this facility anymore, they have to also redeem the existing points in their accounts by October 31, 2015. On the other hand, the company’s website claims that it is replacing the program with more valuable feature.

Jabong so far had two types of loyalty programs for its customers. First was 'Classic', a default membership given to a customer when he signs up and offered two percent on the order value as reward points and second was 'Platinum' membership given to those who shopped for a minimum Rs 7,500 in three months after their first order.

Jabong’s first quarter operating margins dwindled compared to the same quarter of 2014. The company is lagging behind other firms of Rocket Internet in terms net revenues growth or the actual revenue booked by the companies.