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Zomato plans D2C expansion of Blinkit to compete with ecommerce giants

This ambitious endeavour would involve building a dedicated supply chain infrastructure to directly source branded products and manage inventory, to compete with giants like amazon and flipkart.

Zomato-owned Blinkit to deliver printouts at your home in 10 minutes

Zomato-owned Blinkit

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Swiggy shareholder prosus may receive promoter tag in platform's ipo launch, amazon great republic day sale: offers on apple, samsung, other smartphones, samsung ties up with blinkit to deliver galaxy s24 series in select cities, swiggy planning fresh layoffs; may cut 7% from 6,000-strong workforce, how an advertisement featuring amitabh bachchan landed flipkart in trouble, jsw steel in talks to buy australian coal mine for up to $1 bn valuation, nvidia market rally: what's behind the us-based company's bull run, jefferies financial stops coverage on paytm until regulatory issues ease, mitsubishi to enter indian car market with over 30% stake in tvs mobility, edtech major byju's rights issue gets $300 million commitment: report.

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First Published: Feb 19 2024 | 12:50 PM IST

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Zomato plans for blinkit to deliver more via ecommerce.

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This major push into the fast-growing direct-to-consumer space would entail Zomato building its own supply chain to directly source branded products and manage stock, multiple people aware of the plans told ET. It would deliver these through Blinkit.

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The Strategy Story

Zomato Business Model: Everything you need to know

In July’21,  Zomato’s IPO raised Rs 9,375 crore . It was one of the most talked-about events as it became the first Indian startup to go public, that too after COVID when many things became uncertain. This means that Zomato was doing something right, and I decided to read more about its business model, which eventually made me write this article.

View this post on Instagram A post shared by Zomato (@zomato)

Earlier I used to think that Zomato was just about food delivery and restaurant listing. But, I forgot it’s a “FoodTech,” which means it has access to a large amount of data that it has been using in exciting ways and will continue to do so.

In this article, I will try to give a bird’ eye view of Zomato and cover a bit of everything about its business model to its future business plans, how does Zomato make money, and its mind-blowing marketing strategies.

The Growth Story of Zomato

As of 31st March 2021, Zomato is present in 24 countries outside of India. According  to their RHP , the company has decided to focus only on the Indian market going forward, considering the market potential.

Zomato has over 1.4 million listed restaurants and 12,000 restaurant partners. Moreover, it has over 6500 restaurant partners for Zomato Gold. In December 2020, it had around 162,000 active delivery drivers and 3,50,000 active restaurant listings on its platform in India

To fuel its rapid expansion, Zomato acquired several startups around the world. In 2014 itself, it  acquired four startups overseas . It was part of its strategy to enter markets with low competition in this space of restaurant discovery, make money here, and then tap the markets having competition.

What Strategies made people “Swiggy Karo, Fir Jo Chahe Karo”

One of its  most significant acquisitions has been Uber Eats India business , which helped the company get a competitive advantage from its rival Swiggy and one rival less for the company to deal with. Its latest acquisition has been  Fitso, a full-stack sports facilities provider  and discovery startup, which hints at its foray into the nutrition segment.

Business Model Canvas of Zomato

Customer segments: .

Broadly, we can say that there are three customer segments in Zomato’s business model:  

  • Local restaurants : Zomato helps restaurants enhance visibility to their target audience, provides opportunities for targeted advertisements, customer service & engagement, as well as track their performance using its analytical tools. 
  • Users : Can be divided into two categories for Zomato – one who want food delivered to their homes quickly and others who want to go out (they can look for places according to the distance, budget, cuisines and even reserve a table).
  • Reviewers : Also known as content contributors of Zomato, these are the people who help others make their choice by providing ratings and reviewing restaurants basis various parameters.

Key Partners: 

Restaurants, delivery personnel, and food bloggers (by actively providing reviews on Zomato) are the critical partners in Zomato’s business model. It has tied up with various other companies as well that help in various aspects. A few of the notable partners are: 

  • London & Partners (helped Zomato in finding the location for office setup, market research, advise on legal matters, assistance in staff and management recruitment, etc.), 
  • Uber Taxi (this partnership increases convenience for customers who are eating out by enabling them to book an Uber ride to the restaurant they want to dine at from their app itself) 
  • Electronic payment companies like Visa,  PayPal , etc.

In August 2021, a year after the launch of Swiggy Money (a digital wallet that Swiggy made in association with ICICI Bank), Zomato incorporated –  Zomato Payments Private Limited (ZPPL), its wholly-owned subsidiary , to provide payment aggregator services and payment gateway services for its users following the RBI guidelines.

Value Proposition

Zomato follows the QAAA model, which consists of: 

  • Improving  the quality  of food:  Through Hyperpure (talked about in detail later) and Food Hygiene rating, it helps its partner restaurants maintain high-quality standards. 
  • Boosting  accessibility  for customers:  Starting with metro cities, Zomato has expanded to tier 2 and 3 cities and continues to increase its reach.  
  • Focusing on  affordability :  Zomato aims to make food affordable for its consumers without compromising on profits for partner restaurants.
  • Driving the force of  assortment :  Zomato wants to help customers make an informed choice by providing a wide array of information in a structured manner.

zomato business plans

Revenue Model: How does Zomato make money?

1. delivery charges:  .

Based on the number of orders, Zomato charges the partner restaurants a commission, which is divided between the company and the delivery partners.

In FY 2019, the company made four times more on delivery than it did the previous year. These charges formed around 75% of the total revenue for the company in that year, which makes delivery charges the largest source of income for the company.

According to the company, in India, the number of customers ordering food every month on their platform in FY 2021 touched 6.8 million customers with three times the average frequency. 

Contribution per order rose from -47 Rs/order in Q1 FY20 to +27 Rs/order in Q1FY21 (as shown in the below diagram)

zomato business plans

2. Zomato Pro:  

Earlier known by the name Zomato Gold, it was based on a freemium model where customers who paid a certain fee enjoyed premium services while dining at partner restaurants like offers on food and beverages.

We have 1.8mn Zomato Pro members as of today. And one of the most requested features from our customers has been “Unlimited Free Deliveries” (something like Amazon Prime). So… in a few hours, we are launching our Limited Edition *Pro Plus* membership for select customers… pic.twitter.com/RtL4ftDBpt — Deepinder Goyal (@deepigoyal) August 2, 2021

Zomato introduced a new membership service in August, an ‘invite-only upgrade of Zomato Pro’s named Zomato Pro Plus.  CEO Deepinder Goyal assured that Zomato would bear the entire cost  of this service, and delivery partners won’t lose income on the same.

3. Event Organization: 

Zomaland event of Zomato became quite popular before COVID hit, and it’s an excellent opportunity for partner restaurants to get visibility. Here Zomato earns from both customers (entry fee) and restaurants. 

4. Restaurant Advertising: 

With  90 billion monthly visits  and 1.4 million restaurant listings, Zomato sure is the go-to place for people who want to find where to eat/order from next.

So, to stand out on the platform, the restaurants have to pay a certain sum of money so that their restaurant gets noticed by people visiting the platform. Zomato charges a certain amount of money from restaurants for advertising. 

By charging a monthly subscription fee, it even provides restaurants with analytical tools like Zomato order (with the help of which restaurants can manage their offerings to consumers and give discounts accordingly) and Zomato book (managing table reservations more efficiently). 

zomato business plans

5. Zomato Kitchens: 

Here, Zomato will connect  kitchen partners   (a partner who will construct the kitchen according to the design and specifications and in turn Zomato will pay money to operate this place)  with restaurant partners  (partners who will operate their restaurants in the space which Zomato had asked kitchen partners to construct).  

The role of Zomato is to act as an aggregator bringing together both kitchen and restaurant partners. Since it has access to a large amount of data, it knows which location would be optimum for the construction of  cloud kitchens .

It might start its cloud kitchens in the future and develop an in-house brand that competes with other restaurants on the platform. This could be a game-changer for Zomato and could turn out to be very profitable for them. 

For more clarity on what is a cloud kitchen and its types (can use any)

6. Hyperpure by Zomato: 

Launched in 2018 to provide good quality ingredients to partner restaurants, under this program, Zomato collaborates directly with farmers, producers, mills, and processors to monitor the source of each of the ingredients being sold to ensure freshness and quality of the produce. According to its RHP, in March 2021, it supplied ingredients to 9,225 restaurant partners across 6 Indian cities.

Zomato aims to bring more efficiency in the supply chain by using a technology-driven end-to-end platform so that fewer people are involved; high-quality ingredients are supplied and reducing food wastage. 

During the first pandemic wave, many restaurants signed up on this platform, but these numbers didn’t grow as such during the second wave. Despite the challenges, investors are optimistic that the platform will increase by ten times in the next 2-3 years. 

zomato business plans

Cost structure: 

Expenses incurred by the company can be broadly categorized into: platform development cost, branding and advertisement cost, credit card processing fees, legal and accounting fees, office maintenance cost, and employee salaries. 

Fixing its Unit Economics

Unit economics is the profit made by the company per food order delivered, and positive unit economics is one of the biggest obstacles for any food delivery company in the world. According to its RHP, Zomato has been able to achieve positive unit economics.

This was possible by charging higher delivery charges from customers, decreasing discounts offered on the platform (offering high discounts initially was one of the ways it acquired customers on their platform and made them habituated to use it), decreasing the advertising expenses, and increased commission from restaurants, utilizing its logistics fleet more efficiently and adding new sources of revenue using subscriptions like Zomato Pro.  

zomato business plans

Content is the king for Zomato: 

Zomato’s focus on content (content related to restaurants on its application and website) helps them to attract a large number of customers to their platform organically, and even numbers support this: in FY2021, 68% of new customers were acquired organically without any paid advertisements (source: Zomato RHP).

Customers coming to the platform further enhance the richness of this content by adding their ratings, reviews, and photographs of the restaurants and food served there. This creates a virtuous cycle that further feeds into the transaction funnel and creates a strong flywheel effect. 

zomato business plans

Marketing Strategy of Zomato

When it comes to its social media presence, Zomato has been very clear about its motive to make such content for its customers, which educates them about the brand and is also very refreshing and fun to watch. This is even evident from the bio company has written for itself on its social media handles, and the company does stand up to its promise of delivering entertainment. It focuses on the emotional benefit part rather than the functional benefits.

Zomato’s social media handles (YouTube, Instagram, Twitter, LinkedIn) are full of exciting campaigns that would be challenging to cover all (honestly, one can even write one complete article on that and we will be writing very soon). Here are some of the campaigns/posts/tweet threads that I enjoyed from Zomato in recent times:

Turning crisis into opportunity:  #zomatoloot  campaign 

Almost a year back, when users criticized Zomato’s butter chicken ad on YouTube, the brand’s marketing team announced the #zomatoloot campaign where users were given a chance to create ads for the brand, and the winner got a sum of 25 lacs. This gave the brand a lot of free publicity and, of course, ads that it could use for the coming weeks.  4113 entries  were received as a part of this contest, and the winning ad was:

Winning consumer’s trust during COVID times: 

Last year, when the COVID wave hit and people were skeptical about ordering from outside, Zomato ensured that the safety of consumers is their priority, and they are taking steps for the same.

‘On-Time or Free’ (OTOF) campaign: 

Taking inspiration from Dominoes, Zomato launched this campaign in December 2019 to guarantee on-time delivery to its  customers on its entire menu and not just one food item  (as used to happen traditionally). 

Never late to the party: 

Zomato seldomly misses an opportunity whenever a significant event occurs, be it related to sports, politics, or business. 

iPhone 12 vs iPhone 13 pic.twitter.com/V3hzWb0eSQ — zomato (@zomato) September 14, 2021

Platform-specific content: 

Zomato adapts its content according to the platform. For example, one can find memes related to office and colleagues on LinkedIn, reels made on ongoing trends on Instagram, replying to other brands on a constant thread in their context on Twitter, Food challenges, and Celebrity Brunches on YouTube, etc.

Zomato’s Twitter account regularly engages with the audience and keeps posting excellent content, which made  Twitter award Zomato for the Best brand voice in 2020 . Deepinder Goyal, its founder, makes sure that he makes important announcements related to its activities on Twitter.

Over the last few days, one of the most requested features on @zomato has been – a selection of home style food for people battling poor health. We just launched home style mini-menus along with thousands of restaurants across the country. #RestaurantsAgainstCOVID (1/3) pic.twitter.com/2JDqqtic5Y — Deepinder Goyal (@deepigoyal) April 27, 2021

OOH campaigns: 

Before social media became so popular,   brands used to spend heavily on billboard advertisements, and so did Zomato. Minimalistic, mostly text, but always grabs attention and brings a smile to your face.

Hey guys, we at @Zomato (me mostly, I'm a great team player) have been working on some outdoor ads. If you spot one in your city, please share a picture with us (me). Thanks! 😇 ☺️ pic.twitter.com/sxl5qYpAuk — Akshar (@AksharPathak) November 29, 2017

Zomato also uses push notifications in mobile apps, email marketing, SEO, and paid advertisements to gain top-of-the-mind recall for consumers.

Future of Zomato: 

In India, with the coming of COVID,  the food delivery market saw a growth  in the number of orders as people who used to go out to eat preferred to eat at their homes safely. This trend will most probably continue in the future as well.

One of the biggest challenges for any food delivery company is making unit economics per order favorable, which Zomato has achieved recently. Increased demand for food delivery and positive unit economics per order means that Zomato’s profitability is likely to grow.

Apart from food delivery, Hyperpure has been one of the focus areas for the company. Whether Zomato will be able to scale this up and reap profits out of it, is something to watch out for. Recently,  cloud kitchens have been gaining traction .

How Rebel Foods business model is taking Kitchen to the clouds

After  REBEL foods recently became a unicorn , it will be interesting to see how Zomato scales up its cloud kitchen venture: Zomato kitchens, in its multidimensional business model. Given the enormous access to data that Zomato has, it should try to compete in this segment.

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zomato business plans

Curiosity and eagerness to learn about new things have made me learn more about the start-up ecosystem, public policy, and brand management. An alumnus of IIM Kozhikode, I’m starting my corporate career again as a Management Trainee. I like reading non-fiction books, listening to podcasts, playing board and card games, sketch and paint.

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Zomato's future plan - focus on three key areas

Online food delivery platform Zomato has decided to narrow its focus on three key areas of food ordering and delivery; supplies to restaurants through 'Hyperpure' and quick commerce, company Chairman Kaushik Dutta said on Tuesday.

Zomato

In his address to shareholders at the company's annual general meeting, Dutta said the move was part of strategy to focus "only on areas that have the potential to become meaningfully large businesses ten years from now".

In FY22, he said Zomato was able to achieve strong top line growth while keeping its "adjusted EBITDA burn under control", despite multiple challenges such as disruptions due to Covid-19 pandemic, macro-economic uncertainty, rising inflation, fuel prices, among others.

This year after reflecting on the strategic priorities as a company, given the size and scale of the platform now, Dutta said it was decided that the focus would be only on areas that have the potential to become meaningfully large businesses ten years from now.

Subsequently, he said Zomato would narrow its focus to three key areas -- food ordering and delivery; Hyperpure and quick commerce.

Zomato's core food delivery business is stable and headed for profitability, he said, adding in India food delivery still has a large runway for growth.

While restaurant food consumption has increased in the past few years, its overall penetration in India is still significantly low as compared to global counterparts, he reasoned.

On Hyperpure -- Zomato's supply platform for restaurants for fresh items, he said the company is now starting to see strong adoption of its services by restaurant partners.

"We think that this business has the potential of becoming as large or even larger than our food delivery business because the addressable market here is potentially larger than food delivery," he added.

On quick commerce, he said the acquisition of Blinkit was completed this month and the integration of the two teams has started.

In June this year Zomato had announced acquisition of Blink Commerce Pvt Ltd (formerly known as Grofers) for Rs 4,447.48 crore in a share-swap deal as part of its strategy of investing in quick commerce business.

Dutta said Zomato considers quick commerce as a natural extension to its core food delivery business and increases its addressable market manifold.

It has the potential to help the company build a more profitable business by cross leveraging existing customer base and increase hyperlocal delivery fleet utilisation, he added.

"With this, we now have a clear execution plan around these three businesses and our focus as a team will be to get these businesses to meaningful scale and profits," Dutta said.

He also said Zomato's dining-out and certain other segments saw a revenue decline of 15 per cent in FY22, due to discontinuation of most of its international operations as well as certain non-core businesses.

The dining-out business was adversely impacted in FY22 by Covid-related lockdowns.

He also said the company is making progress in its efforts for adoption of electric vehicles with around 4,500 active EV based delivery partners and around 18 per cent of orders delivered on bicycles as of March 2022.

In reply to shareholder queries, Zomato founder & CEO Deepinder Goyal said the company does not expect to make any other strategic minority investments for the foreseeable future as it has made all the investments that needed to for its future plans.

On safety of delivery partners, he said it has always been a priority for Zomato and "no compromises have been or will be made here", while also asserting that the platform does not incentivise riders to be on time.

Goyal also said Zomato will put a phone number on the bags of its delivery partners for people to call and report if any one of them were found to be speeding.

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How Zomato Works, Zomato Business and Revenue Model Explained

zomato business plans

Table of Contents

A step-by-step guide: how zomato works for restaurants and customers, understanding the zomato business model: how does it work, zomato’s revenue streams: how does the food delivery giant make money, zomato for businesses: the ultimate guide to benefits and opportunities, navigating the changing tides of the food delivery industry: challenges faced by zomato.

Chances are, you have used Zomato at least once. But do you know how this popular restaurant discovery and food delivery platform works behind the scenes? This blog post will deeply dive into the Zomato Business Model , revenue streams, and operations. From its humble beginnings as an online menu card to its current status as one of India’s most successful startups with global reach, we’ll explore everything that makes Zomato tick! So sit back, relax, and get ready to learn all about How Zomato Business Works ! It currently operates in 24 countries. The company provides menus, user reviews, and restaurant contact information.

In 2010, Zomato launched its first international site in the United Arab Emirates. As of September 2015, it has expanded to more than 500 cities across 24 countries and serves over 60 million users monthly. The company raised $60 million in Series D funding led by Info Edge (India) in November 2013.

In May 2014, Zomato acquired Urbanspoon for $52 million. In January 2015, Zomato announced that it had acquired Turkey’s leading restaurant search service Mekanist. In April 2015, Zomato acquired US-based NexTable, allowing customers to make restaurant reservations through the app.

1 Search for Restaurants: Zomato’s home page allows users to search for restaurants in their area by entering their location, cuisine preferences, or restaurant names. Users can also browse through popular restaurants in their area, top-rated restaurants, or restaurants offering discounts or deals.

2 View Restaurant Details: Zomato provides users with detailed information about the restaurant once a restaurant is selected. Users can view the restaurant’s menu, pricing, photos, location, and user reviews. The platform also provides information about the restaurant’s operating hours, contact details, and delivery options.

3 Place an Order: If a user wishes to order food from the restaurant, they can do so directly through Zomato. The platform allows users to select items from the restaurant’s menu and add them to their cart. Users can customize their orders by specifying additional requirements, such as dietary preferences or allergy concerns.

4 Payment: After placing the order, users can proceed to payment. Zomato supports various payment methods, including credit and debit cards, net banking, and digital wallets. Users can also opt for cash on delivery in some cases.

5 Delivery: Once the payment is confirmed, the restaurant prepares the order and sends it to the user’s address. Zomato’s delivery partners then pick up the order from the restaurant and deliver it to the user. Users can track their order status in real-time through Zomato’s app or website.

6 Review: Users can provide feedback about their experience with Online Food Delivery Apps in India . Zomato encourages users to rate the restaurant and leave detailed reviews to help other users make informed decisions.

Besides Online Food Ordering , Zomato also offers a restaurant discovery platform where users can browse and review restaurants in their area. The platform also provides restaurant owners with tools to manage their business listings, menu, and customer reviews.

Zomato’s business model is based on providing a comprehensive and convenient online platform for users to search for restaurants, view menus, read reviews, and make reservations. The company earns revenue through advertising and subscription fees from restaurants.

1. Restaurant Discovery: Zomato’s platform allows users to discover new restaurants based on location, cuisine preferences, and other criteria. Restaurants can create listings on the platform for free, but they can also pay to have their listings featured more prominently. This is a significant source of revenue for Zomato.

2. Online ordering and delivery: Zomato offers online ordering and delivery services, allowing users to order food from participating restaurants. Zomato charges a commission fee for each order, typically around 10-15% of the total order value. This is another significant source of revenue for Zomato, and the company has been expanding its delivery services in recent years.

3. Advertising: Restaurants can also pay to advertise on Zomato’s platform, which includes banner ads and sponsored listings. Zomato uses targeted advertising to reach specific audiences, such as users interested in a particular cuisine or type of restaurant. This is another important revenue stream for the company.

4. Premium subscription services: Zomato offers premium subscription services to restaurants, which provide additional features and benefits such as enhanced visibility and analytics. Restaurants can pay a monthly or annual fee to access these services. This is a relatively new revenue stream for Zomato, but it has grown in popularity as more restaurants looking to improve their online presence.

5. Data insights: Zomato collects and analyzes user behavior and performance data to provide insights to restaurants and other industry stakeholders. This data is valuable to restaurants as it can help them optimize their menus, pricing, and marketing strategies. Zomato also uses this data to improve its platform and services.

Zomato Business Model generates revenue through multiple channels, including advertising, online ordering and delivery, and premium subscription services. Zomato has become a leading player in the online food industry by providing services to users and restaurants. The company’s focus on technology and data has also helped it stay ahead of the competition and continue to grow its business.

Zomato’s revenue model is based on multiple streams, including:

  • Commission on Online Orders: Zomato earns commissions on every order placed through its platform. This commission is typically around 10-15% of the total order value. This revenue stream has become increasingly important for Zomato as it has expanded its delivery services.
  • Premium Subscription Services: Zomato offers premium subscription services to restaurants, which provide additional features and benefits such as enhanced visibility and analytics. Restaurants can pay a monthly or annual fee to access these services. This revenue stream is based on recurring subscription fees.
  • Data Insights: Zomato collects and analyzes user behavior and performance data to provide insights to restaurants and other industry stakeholders. This data is valuable to restaurants as it can help them optimize their menus, pricing, and marketing strategies. Zomato also uses this data to improve its platform and services. This revenue stream is based on data licensing fees.
  • Events and Reservation Fees: Zomato also earns revenue from hosting events and providing restaurant reservation services. This revenue stream is based on event fees and reservation fees.

Overall, Zomato’s revenue model is based on generating revenue through multiple channels, including online orders, advertising, premium subscription services, data insights, online ordering and delivery fees , and events and reservation fees.

Here are some benefits of using Zomato for businesses:

Increased Visibility: Zomato has a large user base, and by listing your business on the platform, you can increase your visibility and reach potential customers who may not have heard of your business before.

Increased Foot Traffic: Zomato can help drive traffic to your restaurant by featuring your business in search results and recommendations to users looking for restaurants in your area.

Reviews and Ratings: Zomato allows customers to leave reviews and ratings of your business, which can provide valuable feedback to help you improve your offerings and service. Positive reviews can also help attract new customers.

Targeted Marketing: Zomato offers targeted marketing options, allowing you to reach specific audiences based on location, cuisine, and price range.

Cost-effective Advertising: Advertising on Zomato can be a cost-effective way to reach potential customers, as the platform offers a range of advertising options at different price points.

Analytics and Insights: Zomato provides businesses with analytics and insights to help them track their performance on the platform, including data on page views, user interactions, and customer demographics.

Overall, Zomato can be a valuable tool for businesses in the Online Food Delivery Industry looking to increase their visibility, attract new customers, and improve their offerings and service.

✅ Want to Know? The Cost Estimation for Developing App Similar to Zomato

The platform has faced several challenges over the years. Below are some of the significant challenges faced by Zomato:

  • Intense Competition: Zomato operates in a highly competitive market, with several players, including Swiggy, Uber Eats, and Foodpanda. The intense competition puts much pressure on Zomato to keep innovating, offer better services, and keep prices low to retain and attract customers.
  • Logistics and Delivery Challenges: One of the primary challenges faced by Zomato is the logistics and delivery of food. The company has to ensure that food is delivered on time and in good condition. Delays and mishandling can lead to dissatisfied customers, negative reviews, and loss of business.
  • Managing Quality Standards: Zomato works with numerous restaurant partners, and it can be a challenge to maintain consistent quality standards across all partners. Ensuring food is prepared, served correctly, and adheres to hygiene and safety standards is essential for customer satisfaction and brand reputation.
  • Dependence on Third-party Vendors: Zomato relies on third-party vendors for many of its operations, including logistics and payment processing. This dependence can create challenges, including disruptions in the supply chain and increased costs.
  • Regulatory Challenges: The food delivery industry is heavily regulated, and Zomato has to comply with various regulations, including food safety standards, taxes, and labor laws. Complying with these regulations can be challenging, time-consuming, and costly.
  • Managing Growth: Zomato has experienced rapid growth, expanding into new markets and adding new services, such as online ordering and table reservations. It can be challenging to manage this growth and ensure the company maintains its brand identity and customer base.
  • Data Privacy and Security: Zomato collects and stores sensitive customer information, including payment details and personal information. Ensuring this information is kept secure and protected from data breaches is crucial to maintaining customer trust and complying with data protection regulations.

In conclusion, while Zomato has become a household name in the Food Delivery Apps in India & USA and the restaurant discovery industry, it faces various challenges. These challenges require constant attention and innovation to ensure the company stays ahead of its competitors and meets its customers’ needs.

Zomato is a revolutionary food delivery service that has overtaken the world. It has become one of India’s most successful tech companies by leveraging its deep understanding of customers and creating an efficient online platform. Zomato’s Business and Revenue Model is simple yet effective and has enabled them to build the largest food-ordering network in the country. With its continuously expanding reach, Zomato will remain dominant in this space for many years.

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Zomato business model

Zomato business model

Zomato was launched in 2010, from the rebranding of Foodiebay, a food directory website. Like any other startup in india, food tech unicorn Zomato too had its ups and downs. In 2015 , during the massive layoffs and losses, there were big question marks on the company’s survival in the market. But, Zomato defied the odds and came out even stronger to dominate the food delivery industry in India. 

Pankaj Chaddah and Deepinder Goyal , are the brains behind Zomato . They were alumni of IIT Delhi and co-workers at Bains & Co in New Delhi. In their office, they recognized how people had to wait for a long time to have a glimpse of the menu card. And, this led to the birth of Foodiebay. 

In Foodiebay, the menu soft copies were uploaded so that people can check out the menu on their smartphone and order quickly with no wait. The concept became an instant hit, their website traffic numbers increased significantly so they decided to expand their services to Kolkata and Mumbai. The number of people using the Foodiebay soared with each passing fiscal year. Later, the founders of Foodiebay wanted to make the venture even bigger, thus leading to Zomato, a simpler name to remember. They didn’t want people to confuse Foodiebay and eBay. In 2010, Zmato was officially unveiled. 

As the users of the Zomato website grew, Founders with the aim to enhance ease-of-use decided to launch a dedicated Zomato food ordering App.

However, this innovation needed a lot of funding to kick start. So they started doing series of funding :-

  • In 2010, Info edge invested US$ 1 million into the Zomato
  • Then the next year, they gave whopping funds of US$3.5 million and US $10 million the following year
  • In 2014, Sequoia Capital joined in and poured 50 million+ for the next three years
  • Later investment firms like Temasek Holdings, Vy Capital, Baillie Gifford, and multiple other firms joined in.

So far in the last three funding rounds Zomato has been able to raise 100 million + funding each time and was valued at $5.4 billion .

The formula of success of Zomato according to their founders is hiring the right people with passion and dedication to take the company forward. In fact, they believe this is the biggest hurdle, and now they are proud of their team. 

During the earlier days of Zomato, the founders did not focus much on earning revenue, and only when the website gained huge popularity, they recognized the prospects of earning. When they had 62.5 million sign-ups, restaurants started contacting them to place their advertisement through which Zomato made a good revenue. Restaurants were eager to integrate Zomato’s online food ordering sytem into their ecosystem and multiply their sales. Later, Zomato enhanced the customer experience via cashless transactions. 

Today, Zomato is operational in 24 countries, across 10,000 cities. The revenue of the company is ₹2,486 crore as of 2020. 

Zomato’s IPO success is promising for other startups in India. The company’s stock market debit day ended at 66% at a value of $13.3B. The concept of Zomato is similar to US-based DASH that lets companies book restaurant tables and order food from restaurants. 

“The response from institutional investors has been strong. This suggests that the overall float available for trading might be limited leading to a higher GMP. We had to issue a *Subscribe with Caution* rating for it’s IPO, keeping in mind the long investment horizon required for high-growth companies that are currently loss-making,” said Rajnath Yadav, Research Analyst at Choice Broking.

What Does Zomato Bring to the Table?

Since the launch of Zomato, it has created a buzz in tier-1, tier-2, and tier-3 cities throughout India. Zomato operates on the QAAA model, which stands for Quality, Accessibility, Affordability, and Assortment to both their partners and customers. Let’s understand what makes Zomato so distinctive from its market rivals.

Improving Food Quality: Yes, Zomato has invested big time in improving the food quality by funding restaurants through their Hyper Pure campaign. This funding helps restaurants to maintain the highest standards with the use of high-grade ingredients, fresh veggies, and a hygienic kitchen.  Zomato gives food hygiene ratings to each restaurant thus allowing customers to order accordingly.

Increased Accessibility for Customers: With each quarter, Zomato is expanding to new cities across India, covering the suburbs along with the metro cities. Nowadays, they offer additional features such as corporate catering and table reservations. And, their feeding India initiative is a campaign that works towards creating a better India when no one sleeps on an empty stomach. 

Maintaining Affordability: Affordability has been the major aspect that Zomato has never overlooked. They offer amazing deals and discounts on food ordering. Their gold package subscription was an instant hit, allowing customers to save a considerable amount on regular food orders. They have always strived in the direction of ensuring affordability without compromising much on their profits.

Aid in the Assortment: Zomato presents its customers with the opportunity to taste dishes of diverse cuisines with no geographical borders. They provide the most detailed information on their App so that their customers can make well-informed decisions. 

How Zomato Earns Money?

Ever since Zomato’s inception it has been churning out good revenues but was never able to make hefty profit. Hence the reason why people think Zomato doesn’t earn much and they expect it to be the same in the future.

But only few are able to realize what Zomato brings to the table and apart from it’s cheap food delivery services , it has diversified it’s revenue into multiple streams and today we’re gonna talk about that:-

Restaurant Advertising

Restaurants are the backbone of Zomato. As of now, there are about 131,233 active restaurants added each month on Zomato and every restaurant on Zomato prefers to be on the top of searches whenever a customer searches for a relevenat dish in their locations. So, the food delivery App Zomato offers restaurant advertisements.

It typically charges 40 to 50 Rs per click on their platform. Also there is a zero restaurant listing fee on Zomato. Hence for F&B business owners all they can do is sign for free and to boost their order numbers, they pay upfront for the advertisments.

Food Delivery

Approx 75% of Zomato’s revenue in the fiscal year 2019 was through food delivery commissions. Zomato has currently developed it’s own ecosystem for online food ordering where restaurants have to use Zomato’s own associate riders to delivery their orders and there is no way around. In the end, restaurants are charged for delivery commissions, which you can completely avoid if you use NinjaOS as your online ordering system.

Anyways, Zomato’s revenue was $155M in 2020 which was approx four times what they made last time. 

Subscription Programmes

The Gold subscription that aims at providing premium services to their customers is amongst the biggest revenue streams of Zomato. If a customer has a gold subscription, they get complimentary beverages and food. 

In the year 2020, the revenue from the gold subscription model was about $49 million, and $30 million. The unlimited pack gold subscription charge in India is Rs 1800 for 365 days.  

Live Events

Another way Zomato makes good earnings is by hosting live events with the objective to promote their partner restaurant. These restaurants get great exposure & visibility via Zomato events, and they have to pay a hefty price for it. 

The Zoomland event of Zomato is quite popular, it charges its users a nominal fee to enjoy food and live musical performances. 

Zomato’s White Label Access

Recently, Zomato has an unrivalled Whitelabel Platform that is a suite of technologies that allow restaurants to operate their business over the Internet. The key feature of this platform is allowing restaurants to have their custom-branded native Apps to better engage with their customers. 

The Whitelabel platform works on the subscription model of $200 per month. 

Zomato Kitchens

Zomato also belives in cloud kitchen’s concept where they provide infrastructural services to certain restaurant partners. They fund food entrepreneurs to set up a restaurant in the right location with an investment of Rs 35 Lakhs. 

It offers a return of 2 to 4 lakhs to the inventors. Presently, Zomato is having 180 affiliate kitchens. Zomato is always in search of passionate entrepreneurs for setting up Zomato kitchens. 

Zomato Hyper pure

Zomato under the Hyper pure program collaborates directly with the farmers to enhance the quality of raw ingredients supplied to the restaurants at the most competitive rates. The hyperpure venture was launched in August 2018, and within a few months, the concept rapidly grew in numbers. 

By November, Zomato was supplying raw ingredients to 350 restaurants across Bangalore, and approx 1,000 restaurants as of now. The significant increase in demand led to encouraging Zmato to considerably invest in large scale operations to meet the growing raw material requirements. 

Recently, Zomato bought a warehouse of 6,000 sq. ft in Bangalore, having a capacity of 4,000 metric tons. They are in the process of setting up an even bigger warehouse in Delhi, and then expanding to nine other cities by the end of the year, and eventually exploring the international markets. 

Multiple Business Partnerships

Zomato has a key partnership with Uber Taxi. The App has a feature that allows its users to book a ride to the Zomato restaurant they want to dine at. 

Zomato is in collaboration with London & Partners to boost their online presence in the European regions. Their other big business partnerships include PayPal and Visa. 

What is Zomato’s Future?

In the  Zomato business model case study, let’s talk about Zomato’s future. Zomato’s IPO is re-imagining the future of food in India. 

Their IPO was the biggest hit in India in 2021. They raised approx  Rs 8,250 crore via an initial share sale. 

When the COVID-19 pandemic and swerve restrictions have hard-hit most of the Indian sectors, Zomato stayed strong during these challenging times. 

They brought in more funds to grow their business. Their delivery boys worked tirelessly to deliver orders to even the containment zones throughout the country. This allowed for foodies to enjoy their favourite food from the comfort of their homes even when there is lockdown everywhere. 

“ We need to continue to invest in three core areas for the growth of our business which includes a) customer and user acquisition, b) delivery infrastructure, and c) technology infrastructure. We have made these investments in the past, and we expect these to continue to be critical for the gro wth of our business in the future,” Zomato said. 

The next couple of years looks good for Zomato, with coronavirus is here to stay, even when the global vaccination drive is happening at a rapid pace.  

The future plans of Zomato include setting up hyperpure in some of the major cities throughout the country . They will be expanding their food delivery services to about 500 cities across India. 

They also have big plans of expanding in foreign countries. Drone delivery is the new buzz in the food App delivery, especially internationally, and in coming years, it is expected that it will come to India. Zomato will also be adding new cities to their Zomato gold subscription. The Zomato infinity dining expansion is the next big thing to happen. 

In the end, we hoped that you learned the right lesson for this Zomato’s business model assement and case study, that if you have an idea, determination and success will come hunting you. 

Do you have anything to add to this, why Zomato has been so successful in India, even when people here are used to ordering delivery from restaurants near them? Share it with us in the comment section below, our readers would love to hear your thoughts.

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How Zomato plans to achieve a balance in profitability and growth?

Zomato’s focus on growth may lead to delays in its short-run profitability targets but strategic initiatives hold the possibility of building a more sustainable business model with high-quality growth.

Representational image (Pic - Getty Images)

Representational image (Pic - Getty Images)

zomato business plans

Zomato, the food delivery platform that got bids of over Rs 2 lakh crore for its Rs 9,375 crore initial public offering, has since lost about 54 percent of its market capitalisation. Its shares have tanked over 61 percent from its 52-week high of Rs 148.85 on December 9, 2021.

Investors have been shunning lossmaking new-age tech stocks across the globe, a trend that is now driving companies towards the need to improve profitability while hitting the pause button on growth.

Zomato ’s latest quarterly results showed its consolidated net loss narrowed to Rs 250.8 crore in the three months ended September 2022 from Rs 434.9 crore in the September 2021 quarter. Adjusted revenue grew 48 percent on a YoY basis to Rs 2,107 crore. The company said it crossed the billion-dollar annualised revenue mark for the first time in the quarter.

Does this mean the worst is behind Zomato? Before we answer that question, here is how Zomato makes money.

Revenue streams

Related stories

Zomato mulls expanding Blinkit to compete with ecommerce giants

Zomato’s platform currently has three major offerings – food delivery, Hyperpure, and quick commerce. Food delivery generates revenue through commissions charged to restaurant partners for using the platform. It also earns from restaurants advertising on the platform.

Its second-biggest business segment, Hyperpure, supplies fruits, vegetables, poultry and dairy sourced from farmers, mills, producers and processors to restaurants.

Through its recent acquisition of Blinkit, Zomato entered the quick commerce space, which operates on a commission revenue model, earning from local shop owners and merchants that it has tied up with. Additionally, a delivery fee is charged if the order amount is below a minimum purchase criteria.

There is also a minor dining-out segment across India and the UAE, which is monetised through advertisements that restaurant partners pay for to enhance their visibility on the platform.

However, not all metrics improved. Zomato’s gross order value (GOV) growth decelerated as a result of focusing on improving unit economics.

“We have strategically chosen to trade low-quality growth for better unit economics,” Zomato founder Deepinder Goyal said in a letter to shareholders on November 10. “That’s part of our long-term strategy to build a high quality, high growth business. At the same time, we are not shying away from investing behind high quality compounding growth.”

Analysts’ reactions to Zomato’s strategy were mixed. Valuations are split, ranging from a downside of 14 percent to an upside of as much as 116 percent. However, on average, analysts pegged an upside of 50-70 percent in the stock price from current levels.

Nomura suggested uncertainty in achieving an ambitious double-digit contribution margin (CM) as well as concerns over the Blinkit acquisition affecting the bottom line due to intense competition and poor unit economics. It sees CM peak at 7.5 percent by FY31, food-delivery revenue to moderate by FY27F, with gross order value CAGR at 22 percent between FY22 and FY27 and plummeting to 12 percent between FY27 and FY32. It said adjusted EBITDA for Blinkit will not turn positive till FY31.

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Bullish on delivery

JM Financial, on the other hand, remains bullish on the company’s long-term growth prospects in the hyperlocal delivery space and said it is well-positioned to benefit from tailwinds such as improving tech penetration and rising income share of digitally native millennials/Gen Z. It expects food delivery GOV to grow at a CAGR of 26 percent between FY22 and FY27 before reducing to 23 percent between FY27 and FY31 and said Blinkit will achieve EBITDA breakeven by FY26.

The company said overall adjusted EBITDA loss (ex-quick commerce) will decline further with breakeven expected in the next two to four quarters.

“Over the medium term, our ambition lies in getting food delivery adjusted EBITDA to ~4-5 percent of our GOV. Based on our current growth projections, that could happen with a contribution margin as a percentage of GOV of ~8 percent,” Akshant Goyal, chief financial officer of Zomato, said in the letter to shareholders.

Experts said a number of catalysts might play out in Zomato’s favour.

In terms of growth, Zomato still has a long way to go, with the Indian food delivery segment expected to reach $25 billion by 2033E, expanding at a CAGR of 12 percent from FY22-33, according to Macquarie. Market expansion and scaling up will be paramount. The food tech industry is still highly underpenetrated, reaching only about 60 million individuals as compared to the expected 150 million individuals by 2025, as per JM Financial.

Also read:  Credit Suisse lines up its top picks as India's growth trend looks 'resilient'

Zomato’s performance proves the point that while the potential for growth exists, bringing in profitable growth continues to be a challenge. From the perspective of public markets and stock performance, it will have to demonstrate growth and profitability.

What works for Zomato is that it has gained market share steadily. Swiggy and Zomato registered food delivery/quick commerce GOVs of $1.3 billion/$257 million and $1.6 billion/$2 billion, respectively in the first half of calendar 2022.

But can Zomato deliver growth accompanied by improving consumer stickiness and better unit economics? So far, Zomato’s investments towards expansion in tier II, III and IV cities have led to a lower contribution of 1.7 percent in FY22 compared with 5.2 percent reported for FY21.

However, Zomato now reaches 1,000+ towns and cities in India where the contribution margin has improved even beyond the top eight cities. In the second quarter of FY23, there were 248 cities that were contribution-positive (+15 percent QoQ), contributing 91 percent to GOV.

Smaller cities

Jefferies said while smaller cities have lower average order values (AOV), the cost base is also lower and 248 of the cities that were contribution-positive in the second quarter were not the largest 248 cities, with the smaller cities performing on profitability.

It also estimates a 32 percent CAGR in delivery revenue over FY22-26E and said that unit economics will steadily improve with scale as Zomato unlocks cost efficiencies and as customer willingness to pay for convenience increases.

Another reason for analysts’ optimism is that Zomato has strategically undertaken initiatives over the years to keep an eye out for long-term growth opportunities and has consistently built capabilities, including acquisition of Carthero Technologies in FY18 to add hyperlocal delivery capabilities, and the launch of Hyperpure in FY19 to enter the B2B supplies vertical.

With its acquisition of Blinkit, Zomato is expected to create synergies via cross-leveraging the user base and the delivery fleet. Addition of a value-added service like grocery delivery to the portfolio also presents potential cross-sell and up-sell opportunities, analysts said.

Blinkit performance improved with respect to its contribution margin (-7.3 percent in Q2 of FY23 vs -17.3 percent in Q1 of FY23) and GOV that increased by 26.5 percent on a quarterly basis, backed by focus on stabilising operations, smooth app integration, increased throughput per store and the take rate, which is the commission fees levied by Zomato on restaurant partners as a percentage of the order value.

Besides, Zomato has undertaken two initiatives to support expansion in the food delivery business, namely Intercity Legends, which is the intercity food delivery service, and Zomato Instant, which is food delivery in 10-15 minutes launched in some locations in Gurgaon and Bengaluru. Analysts said these low-capital initiatives are showing good traction and some of them could generate incremental growth over the medium to long term.

However, from the poor level of profitability, it may still be a tall order for the company to maintain growth while improving profitability.

Zomato’s food delivery GOV CAGR is expected to be 25-30 percent for FY22E-25E to reach abut Rs 44,000 crore, while overall revenue CAGR estimates are in the 40 percent range for the next three years with the expectation of touching Rs 14,000 crore by 2025E. EBITDA is also expected to largely turn positive in the same period. Net profit estimates vary, with many brokers assuming it to also turn positive by 2025E. Deutsche Bank said it will reach Rs 1,000 crore by 2025E while on the other extreme, Dolat Capital expects it to still remain negative at about Rs 2.39 billion, while also remaining conservative on EBITDA estimates, and expects it to reduce losses to Rs 600 crore by 2025E.

Analysts have valued the company through a discounted cash flow (DCF) model with a discount rate and terminal growth rate in the range of 11-14 percent and 2-6 percent, respectively. “We do believe the company can compound its revenues by 10x over FY22-FY30E but with modest profitability and cash generation and thus believe DCF valuation as an ideal tool to value real long term potential,” Dolat Capital said in its report.

According to Jefferies, Zomato trades at 5.0x CY23E EV/revenue, which is a premium to the median of global food platforms at ~2.3x, and believe it to be warranted by Zomato's stronger growth.

Although the long-term growth outlook and valuation largely looks positive, the management’s uncompromising growth ambitions might delay their profitability goals such as achieving food delivery adjusted EBITDA as a percentage of GOV of 4-5% over the medium term.

“We believe the company has multiple levers to achieve this target, such as 1) further increase in restaurant take-rates, 2) further rationalisation of customer subsidies (delivery charges and discounts), and 3) operating leverage,” JM Financial said. “However, given the near-term growth concerns, margin improvement can be slower than earlier anticipated.”

It said the near-term growth blip could be an interesting entry point for investors to accumulate positions and partake in the long-term value-creation opportunity.

Disclaimer:  The views and investment tips shared by experts on Moneycontrol.com are their own and not those of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.

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zomato business plans

A Detailed Zomato Case Study-2023

Few brands have expanded exponentially after their launch. One of them is Zomato.

How did they manage to achieve this success?

What did they do to improve their customer base?

What was Zomato’s marketing strategy which they used to attract customers?

We believe that Zomato’s digital marketing strategy played an important role in achieving all these.

This article evaluates a few e-marketing strategies and a detailed Zomato case study.

Zomato Case Study- About Zomato Company

When Zomato started, it aimed to become the best restaurant search and discovery platform.

It had the names of different restaurants, menus, costs, reviews, and other essential details. It offered in-depth information on more than 1.4 million restaurants across 23 countries.

Read Zomato Case Study

Over the years, it has become a popular online food delivery platform. Now customers can order food from their favorite restaurants by using their website or app.

Zomato has many delivery executives who pick up the order from the eatery and deliver it to the customer’s address.

How was Zomato Started?

Zomato is an Indian group founded by two IIT graduates, Deepinder Goyal, and Pankaj Chaddah, in Delhi NCR in 2008.

Once Deepinder saw his colleagues ordering food from different restaurants. That was when Deepinder came up with bringing these restaurant menus online.

One day they noticed their colleagues standing in a long queue in the cafeteria waiting for lunch.

So they thought about how much time people could save if they did not have to wait and get their favorite food delivered to their doorstep whenever required.

It is how they started the online food delivery service under “FoodieBay” and renamed it “Zomato.” In the initial stage, FoodieBay listed restaurants in Delhi and NCR. But, they soon grew their business in other metro cities like Kolkata and Mumbai.

As FoodieBay started attracting more and more customers, the founders decided to revamp its name to appeal to audiences outside India too. So then they changed the name of FoodieBay to “Zomato.” By 2016, Zomato had its sophisticated app doing food deliveries from registered restaurants.

Zomato Business Model

The success of Zomato lies in its unique Business Model. Zomato is an app whose business model works around food supply online, providing knowledge, user reviews, and menus of partner restaurants. Here are some of the essential components of Zomato’s business model:

1. Customer segments-  The customer segment of Zomato has three different components: Local restaurants, reviews, and users.

2. Zomato provisions-  Zomato has created a well-designed valuation model for its food delivery services. Zomato Gold & Piggybank has enhanced the standard of services that Zomato offers.

3. Alliances of Zomato-  New partnerships with several big names like Visa, Uber Taxi, and Paypal have improved the business model of Zomato.

This online food delivery app provides a discount to advertise its usage and improve its customer base, considering the tough competition in the market. It’s mainly a selling strategy. Zomato soon started its service in the Cloud Kitchen industry too.

Competitors of Zomato

With various new companies launched in the last decade, the food delivery industry has become one of the largest online platforms.

Thanks to companies like Zomato, Swiggy, Uber Eats, FoodPanda, etc., they are changing the food industry quickly.

The online food delivery system is booming in metros and Tier II and III cities. All credit goes to these significant apps in the market.

The online food delivery industry is rapidly evolving and attracts vast money. However, growing competition and unstable growth policies have resulted in few casualties.

Because of enormous losses, companies like TinyOwl and Eat Fresh had to shut their doors.

Even FoodPanda, a popular food delivery app with a presence in over 13 countries, has been attained several times, initially by Delivery Hero and followed by OLA.

However, the company is still struggling to maintain its position in the online food delivery industry.

Zomato Partnership Strategy

Zomato is continuously working with the government to ensure that its services run smoothly without any hindrance.

Furthermore, it makes sure to support millions of people who are part of their food delivery network by earning money to cover the loss if they have lost their money due to some crisis.

Zomato has always been a leader in identifying the importance of videos and using them to its benefit on the YouTube platform.

Zomato plays short, lively, and unskippable video ads on YouTube with a “call-to-action .” It is proven that video ads play an essential role in Zomato’s advertising strategy.

Zomato Digital Marketing Strategies

Zomato is active on Twitter, Instagram, and Facebook. It has 757K followers, 1.5 million followers on Twitter, and more than 737K followers on LinkedIn.

Zomato communicates with its customers by creating posts on popular subjects.

The brand is aware of its audiences, likes, and dislikes. As a result, it supports material that people love to share, discuss, and reconsider.

To engage customers online, it utilizes popular topics and publishes simple pictures.

During the 2016 Olympics, Zomato promoted its brand on Twitter. The brand used Olympic rings made of coffee and claimed they would receive the gold medal if drinking coffee were a sport.

Another hot subject that Zomato targeted was The “Pokemon Go” video game. Zomato started earning from that too. The brand used the famous Pikachu to promote its brand on Twitter.

zomato business plans

Connecting with the customers by Zomato was aided by positing popular themes. Users possibly don’t want to contemplate too much while using social media. Individuals use social media to enjoy and view humorous content.

Zomato’s digital marketing strategies keep on getting adjusted with new trends emerging. They find new methods to attract customers’ attention. Currently, they are doing a fantastic job.

However, they will benefit considerably if they put forth a sustained effort.

These people are skilled enough to make the most of the Email marketing tool. One of the most innovative and effective strategies is Zomato’s email marketing.

Zomato keeps its customers loyal to its company by utilizing appealing subject lines and a drive to action.

The brand ran an email marketing campaign on Amazon Prime Video with the theme of the legendary series Mirzapur Season 2. Zomato used the subject lines from Mirzapur.

In addition, it created a CV for Biryani as a vital part of one of its most prominent email marketing methods. Food-related terms like, for example, “Curriculum Vitae of Biryani” was showcased by Zomato.

In addition, it used the CTA “hire immediately” instead of “order now.” It is the reason why Zomato’s email marketing strategy performed so well.

Regarding SEO, Zomato has put a lot of effort into this field. According to Ubersuggest data, Zomato ranks for around 7,544,348 keywords on June 2023. Its organic traffic is 77,874,441 users every month.

The company lists the top keywords in its niche and designs a webpage for those. This indicates to the search engine that these pages are apt for the user’s search query. It is a great strategy to ensure that your website ranks top.

As of June 2023, Zomato has 12,738, 685 backlinks from different high-authority domains. It, too, helps Zomato to rank higher.

They are active on Social Media too. Zomato has 829K followers on Instagram and around 1.5 M on Twitter.

Zomato Target Audience

Zomato’s target audience comprises people between 18 and 35 with smartphones and well-versed in using different apps.

It focuses on attracting two customers, one who prefers to eat out and another who wants to order food from outside and deliver it to their home. These groups frequently coincide.

The Zomato Gold program offers incentives for those who eat out and offers food delivery service for those who want the food delivered at home.

Individuals who work and want their food delivered to their office, students who live in hostels and need food, those who lack time to prepare their food, and those who occasionally enjoy eating outside under this group.

Digital Marketing Channels Used by Zomato

Zomato uses Google AdWords for its search ad campaigns. It targets terms like “Food,” “Restaurant names,” “Online food ordering,” and many others.

It focuses on attracting people who want food delivered to them. It also runs Google Display ads to target individuals on apps and websites from 3rd parties.

Influencer Marketing Strategy by Zomato

Zomato has advanced the “hyper-local marketing” idea by advertising its material in regional languages and contacting micro-influencers.

It, in turn, increases the credibility of Zomato by enabling them to connect with more and more audiences.

Zomato has focused on Influencer Marketing in its marketing strategy as it identifies its potential.

Whether micro or macro-influencer, Zomato is not afraid to move further and leverages its disrepute to expand its user base.

All of us are aware of Zomato’s humorous takes on different scenarios through its tweets.

Zomato offers content that will make its customers smile, no matter whatever issue they are dealing with currently or the one they encounter regularly.

Moreover, its humor spreads fast and has a powerful impact.

Memes play a significant role in social media, and the brand has mastered the “meme marketing” method as it recognizes its importance.

As a result, the food delivery company attracts a lot of organic traffic. Thanks to the content marketing strategies followed by the brand, which ultimately helps to increase its revenue.

Acquisitions

  • Zomato has acquired 12 startups worldwide.
  • In 2014, during July, Zomato made its initial acquisition by purchasing Menu-mania for an undisclosed amount.
  • The company pursued other purchases, including obedovat.sk and lunchtime.cz, for US$3.25 million.
  • In September 2014, the brand acquired a Poland-based restaurant search service, Gastronauci, for an undisclosed amount.
  • In December 2014, it attained the Italian restaurant search service, Cibando.
  • In 2015, it bought Urbanspoon, a Seattle-based food portal, for an estimated US $60 million.
  • Other acquisitions of 2015 by Zomato include Mekanist in an all-money deal, MapleGraph, the Delhi-based startup that built MaplePOS, and NexTable, a restaurant and table reservation management platform.
  • In 2016, it bought Sparse Labs, a logistics technology startup, and Runnr, a food delivery startup, in 2017.
  • In September 2018, it bought TongueStun, a Bengaluru-based food e-marketplace, for around US$18 million in cash and stock deal.
  • In December 2018, it bought a Lucknow-based startup, TechEagle Innovations, focusing on drones for an undisclosed amount. Zomato stated that the acquisition would assist in starting drone-based food delivery in India, establishing technology targeted toward a hub-to-hub delivery network.
  • On 21st January 2020, Zomato bought its competitor Uber Eats’ in India, providing 10% of the total business to Uber Eats.
  • On 29th June 2021, the company signed an agreement with Grofers to invest about US$120 million in the online grocery market by purchasing 9.3% stakes in the company.
  • In 2022 during June, Zomato attained Blinkit for US$568 million in an all-stock deal.

Investors Leaving Zomato 

Uber, which attained 7.8% of Zomato shares when Zomato bought its Indian subordinate of Uber Eats, left Zomato on 3rd August 22.

The shares were sold at around $392 million to protect Uber against the losses. ICICI Prudential Life and Fidelity purchased the Zomato stakes.

As per the reports published on 4th August 2022, Tiger Global sold half of its Zomato shares.

2022 Zomato Case Study

According to the news, the American Investment company sold the shares between 25th July and 2nd August 2022.

As a result, tiger Global had a total of 5.11% shares in Zomato, now 2.77% after the sale.

What are the Future Plans of Zomato?

Online food delivery platforms, Zomato and Swiggy, hit an all-time high in sales volumes during 2021, as most people stayed indoors due to an increase in Covid-19 cases.

Zomato said it earned more than 100 crores in Gross Merchandise Value (GMV), which shows the value of food ordered through this platform- compared to Rs. 75 crores it had achieved the previous year on 31st December.

While Zomato’s sales have been rising, the brand can still not make gains due to huge payments led by marketing and discounts.

It posted a total loss of Rs. 1,222 crores for March, a rise of about 50% since the previous year.

However, according to analysts, the food delivery business has a vast scope as it is estimated that the brand will achieve a turnover of $110 billion by 2025.

Zomato’s revenue increased 123% to Rs 4,109 crore in the financial year of 2021-22.

On the other hand, the brand’s loss increased by 24% to Rs. 1,098 crores. The brand’s annual report said its average monthly transacting customer base increased by nearly 116%.

The online food delivery giant, Zomato, narrowed its focus on three essential areas of online food ordering and delivery: food supply to restaurants through “Hyperpure” and fast commerce.

So Zomato started focusing on three vital areas: online food ordering and delivery, Hyperpure, and Quick commerce.

The brand’s online food delivery business is stable and headed toward productivity. As a result, online food delivery has enormous scope for growth in the future.

However, while restaurant food intake has risen in the last few years, its overall penetration in India is still drastically low compared to its worldwide competitors.

zomato business plans

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Zomato Business Model | How does Zomato make money?

Company: Zomato Founder & CEO:  Steve Easterbrook Year founded: 2008 Headquarter:  Gurgaon, Haryana, India. Number of Employees (2019):  5000+ Type: Private Monthly Active Users (2019) : 70Million+ Valuation (Oct 2020): $2 Billion Annual Revenue (FY2020): $394 Million Loss |Net income (FY12020): -$293 Million

Products & Services:  Restaurant Directory | Online food guide | Food delivery Competitors: Yelp | Zagat | Open Table | Grub Hub | Swiggy | Uber eats | Qraved | Chope | Redfoodie | DoorDash | EatStreet | Restorando | MenuEgypt | Forkly | Delivery Hero

Table of Contents

Introduction to Zomato

Zomato has proven to be a phenomenal foodie platform, providing a convenient way to review restaurants, feedbacks, listings in (now) over 24 different countries. The platform is even capable of giving insightful analytics for the restaurant to help route their business to exponential growth.

Zomato is a restaurant-café search and discovery service platform, idealized in 2008 by Deepinder Goyal and Pankaj Chaddah . The brand was originally known as Foodiebay till November 2010.

The platform is ideal for both food lovers and restaurant owners. Users can also view pictures and menus for restaurants that do not have a website of their own.

Any restaurant owner who wishes to list a menu can, regardless if the restaurant has an online presence or not. The platform allows restaurant owners to increase their restaurant business visibility through listing advertisements and special promotional menus through the Zomato platform.

The Zomato platform is designed with smart search engine filters, meaning that it will search for only relevant restaurants as per to the searched relevant keyword.

Zomato acts as the key-bridge to providing relevant information on potential restaurants for users that searches with keywords or keyphrases relevant to the restaurant.

Zomato has grown rapidly from a small food review website to a multinational giant serving over 70 million people every month, both in the food and entertainment business. It is now gearing up for a public listing in the first half of 2021 and focused on raising over $146.5 million in a Series J financing round. In October 2020, it raised close to $52 million from Kora Investments and $5.1 million from Pacific Horizon Investment Trust, which had previously invested $5 million in March 2020. Zomato has already raised over $270 million in 2020 alone from major investors like Tiger Global, Temasek, and Ant Financial. [ 1 ]

The following is a compilation of Zomato Business Model Canvas .

Business Model Canvas: Zomato

1. customer segments.

Zomato has three customer segments:

Users – Zomato platform is explicitly designed for users to find and locate restaurants in a range of various cuisines. Zomato is perfectly geared for customers who prefer home delivery .

Local Businesses – The platform further stands significant for restaurants who want to promote the business or restaurant name to help reach the target audience . Zomato was built on market and trend research. Marriot International is one of the latest global hotel chains to join Zomato’s long list of customers. Zomato will work alongside Marriott on Wheels to enhance its corporate outdoor catering services and home delivery services in partnership with close to 30 hotels across all major cities in India. [ 2 ]

Reviewers (content contributors) – these are active reviewers, who add reviews and photos of local restaurants or businesses on Zomato platform. 

2. Value Propositions

Zomato is an exceptional platform for diners to review a wide range of different restaurants in their serving area. At the same time, it allows restaurant owners to differentiate themselves in the market place, even if they are the owners of more than one restaurant.

 Zomato further serves as a bridge between restaurant owners and hungry customers.

Screenshot showing Zomato’s mobile app and its features

Zomato provides a comprehensive pricing model for the food delivery services , providing insightful details to the overall cost, duration, etc. of the delivery order.

Additionally, Zomato provides membership and loyalty program to build loyal customer base. For example, Zomato Gold membership and Piggy Bank loyalty program ensure that customers get additional value for their money. In 2020, Zomato moved all Gold members to the newly unveiled Zomato Pro. Users on Zomato Pro get a variety of features and upgrades like instant food delivery services and a money-back guarantee from newly registered hotels, bars, and lounges. [ 3 ]

Super excited to introduce Zomato Piggybank – https://t.co/I4xs5NHHwd pic.twitter.com/h1Hrxhqy6t — Deepinder Goyal (@deepigoyal) July 10, 2018

3. Key Partners

  • Zomato has built an alliance with Uber Taxi for users to book a ride to the restaurant that they plan to dine at.
  • The clever innovation eliminates users from dealing with two different apps. Especially when customers are trying to review, pick, and find the best place to dine, all in a smooth, simple way.

London & Partners

Zomato has built an alliance with London & Partners to help expand their virtual foodie presence in the European regions. London & Partners were responsible for aiding Zomato with:

  • Finding an office location in London.
  • Assistance with the staff hiring process
  • Insightful advice on salaries
  • Management recruitment
  • Work placements
  • Market research
  • Advising on accountants and legal procedures, policy, and compliance.

Other business partners – These are electronic payment companies like Visa, PayPal .

Seasonal partners – Zomato partners with companies from time to time, particularly during the holidays. For instance, Zomato partnered with the Singapore Tourism Board to stage an elaborate digital event called Zomaland in June 2020. The virtual event enables the tourism organization to engage Indian consumers successfully while maintaining social distance. [ 4 ]

4. Key Activities

The business model is incomplete without analyzing the key activities of a company. Although Zomato’s primary purpose was to make restaurant hunting exceptionally easy and convenient, it also has various key activities which are listed as follows.

  • Manage Network effects : As aforementioned, Zomato provides local restaurant search service to the users, currently operating in 24 countries. It provides details and reviews of restaurants. The information includes data about the food items, contact info, and address of the restaurants.
  • Manage and Utilize Advertising : Zomato has an enormous user database which it uses for advertisement. The company makes the most of its solid presence and brand popularity by posting advertisements for various restaurants, generating a considerable amount of revenue.
  • Drive Customer Experience Initiatives : Zomato initiates a lot of activities to improve its customer’s experience and keep updating its features as per the trends. In April 2020, it expanded its online food aggregator platform to include contactless dinin g features that allow diners to scan a QR code on the table to check the menu, then place orders and make payments using the app. The feature reduces interaction and contact between staff and diners when they visit restaurants. [ 5 ]
  • Enhancing Brand Image : Zomato maintains its brand image by providing a sense of community for foodies and facilitating people the exact information about “What to Eat and Where to Eat.”
  • Expand and Diversify their service offer:
  • Online food delivery and subscription : Zomato was not a delivery service at the beginning, but eventually it launched it’s delivery and subscription feature as well. However, the section does not generate much revenue for the company as it faces fierce competition from Swiggy .
  • Consultancy to Restaurant Owners : Zomato has a massive database of users, revealing many significant facts about their behaviors, likes, and dislikes. Zomato offers data consultancy services to many eateries and new restaurants in town.  
  • Zomato Whitelabel: Zomato also provides service for restaurants to develop their own app through a platform known as plug and play.

5. Key Resources

Zomato has a massive database on restaurants, café, and similar business places across cities in 24 countries. Zomato aims to build new alliances and capture the global market.

High-Quality Database – Massive Database of restaurants and businesses

Employees – that are working diligently to extend its outreach, apart from the current 24 countries.

Zomato Platform

A community of content contributors or reviewers

Zomato brand reputation

Funding Partners – Zomato were able to raise millions through funding channels. Top investors include Ant Financial, Sequoia Capital, Temasek Holdings, Info Edge, and Vy Capital. In the recent past, other investors have joined Zomato, including Asia Growth Fund, Steadview Capital, Luxor Capital Partners, Lugard Road Capital, and ASP India LP. The investors are part of a  $525 million financing round, which is estimated to reach around $600 million. Currently, India’s company regulator values Zomato at $3.4 billion. Zomato is also set to raise more capital once it debuts for the 2021 IPO. It seeks to issue 34,873 class J7 CCPS shares to the investors at Rs 300,235 per share to raise Rs 1,047 crore ($141 million). [ 6 ]

Cloud and Zomato Kitchens – It provides kitchen infrastructure services by partnering with entrepreneurs to set up and operate Zomato Kitchens in selected restaurants under different labels. Entrepreneurs first have to find restaurants in the right location that they wish to fund, and then Zomato invests INR 35 Lakh or more. Zomato has already set up over 180 affiliate kitchens with its partners and eliminated exclusivity for cloud kitchens, which allows its restaurants to list on rival platforms such as Swiggy . [ 7 ]

6. Channels

Zomato offers its platform accessible through multiple access points:

Application (smartphone or tablet)

Zomato Official Website

Food Porn (Zomato has also created a site specifically for the food porn industry, providing an exclusive photo of exotic foods from around the world)

7. Customer Relations

Convenient Self Servicing : Zomato provides its customers independence to make the right choice, providing all the options and information which leads to comfortable self-servicing.

Up to Date Ratings and Reviews : Users enjoy Zomato’s transparency in their ratings and reviews, providing authentic information to users about the quality and service of restaurants. It started testing a new feature in October 2020 that allows consumers to post their reviews of restaurants , photos of their favorite foods, and a short story on the app for their friends and food bloggers to see directly from the app’s feed. [ 8 ]

Customer Engagement Activities : Zomato initiates customer engaging activities like offering coupons and tickets.

Active Communication Channel and Customer Support : Zomato has a reliable customer support service platform and maintains effective communication with its customers.

8. Zomato’s Cost

The total cost of Zomato’s FY18 was $80 M, which has increased to $500 M in FY 19 . An immense shift indicating how much the business has expanded.

The annual cost of $ 500M is utilized in the following operations.

  • Platform development

Zomato invests graciously on improving its online presence, brand value by enhancing its online portal, customer service, and enhanced marketing operations.

  • Branding and advertisement cost

Zomato launches a lot of various marketing campaign top maintain its popularity, which of course requires a great deal of investments. In 2019, it introduced the Zomato Premier League with a diversified kitty of TV ads and offers like predicting the winners in particular matches to get further discounts. ZPL’s gamification and offers appealed to the foodies watching cricket and attracted over 4 million participants within the first three weeks of the IPL in 2019. [ 9 ]

  • Credit card processing fees

Zomato pays for its credit card transactions operations as well.

  • Legal and accounting fees

Zomato pays other legal fines and payments for acquiring different licensees and taxes.

  • Office maintenance cost 

Zomato operates from 24 countries including Portugal, India, United Arab Emirates, Qatar, Turkey, Indonesia. The company bears office maintenance cost for all of its offices.

  • Employee’s salary

Zomato has over 5000 employees overall with different pay scales. 

9. Zomato’s Revenue

Zomato’s revenue similarly increased in FY19 compared to FY18.  In FY19 , Zomato’s revenue is $206 M – a total of three times more than the FY18 (which was $68 M )

How does Zomato make money?

Now let’s see how Zomato makes money based on a few high-level categories:

The delivery service, dine out membership, advertisements, promotional deals, exclusive offers that Zomato offers are the primary revenue generators for Zomato.

  • The commission from delivery transactions constitutes about 75 % of the total revenue for FY 19.
  • Zomato delivery services earned $38M in FY18, while in FY19, the revenue from the services increased, generating almost $155M , indicating 4 times more growth than the last year.

Dining Out  

  • Zomato has partnered with restaurants to provide complimentary food and drinks to its subscribed members. The membership is called as Zomato’s Gold membership program . The annual membership fee is Rs   1,199 , and the program has over 1 million active subscribers. All subscribers under the Gold program were upgraded on August 1, 2020, to its new subscription package called Zomato Pro that offers to dine out privileges and discounts on the best restaurants. As of July 2020, 50% more partner restaurants had already signed up on Zomato Pro than on Zomato Gold. [ 10 ]
  • The dining out section also saw an increment in sales with $30 M in FY18, while $49M in FY19.

Ticket Sales

  • Zomato also sells tickets for several of events and shows. Zomato earns a commission through these types of sales and deals. Zomaland is one of the most successful live events organized by Zomato, which attracted over 100,000 visitors when it debuted in 2018 across Delhi, Bengaluru, and Mumbai. In 2019, it expanded to over 10 cities and enticed major partners like the Singapore Tourism Board. In 2018 and 2019, Zomato increased its revenue by charging attendees entry fees but was forced to live stream virtual Zomaland@home carnival in June 2020 on its app and the Zomaland pages on Facebook, Instagram, TikTok, and Helo to avoid gatherings and interactions. [ 11 ]

Consultation Services

  • Zomato also offers consultation services and data analytics services for clients, prospects.

Sustainability:

  • In the past few years, Zomato has shifted its focus on being a transactional company instead of relying a hundred percent on its advertising revenue. The company is trying to balance its both features the delivery and the dine out which has generated a revenue of $2M in the sustainability department. In the early years, more than half of its revenues came from ad sales that grew from $38 million in 2017 to $46 million in 2018, representing 62% of its total revenues in FY18. Even though Zomato continues to charge commissions for listing and promoting restaurants on its app’s feed, it stopped considering ad sales as a standalone revenue stream. In 2020, Zomato considered reducing its commission charges by 5% after it received a request from the hotel association. [ 12 ]

Zomato’s Revenue FY19 Vs. FY18

Final Thought

Zomato happens to be one of the most successful platforms that was originally launched in India. Today it’s serving platforms and operations have extended to over 21+ countries and are determined to continue to grow its customer base.

Zomato is working on many new business endeavors. However, this doesn’t limit Zomato from further implementation and improvement to their existing platforms and software applications. 

 References & more information

  • Bhallah, T. (2020, Nov 6). Zomato to raise $146 mn as it preps for IPO in 2021 . Live Mint
  • PTI (2020, June 12). Marriott enters into a pact with Zomato to expand the home delivery service . Deccan Herald
  • Flick (2020, July 5). Zomato Pro: New Features like ‘Money-Back Guarantee’ & More . Flick-on-Click
  • Editor (2020, June 4). Singapore Tourism Board Partners with Zomato to bring a virtual weekend festival experience . Indian Newz
  • Tandon, S. (2020, April 18). Zomato plans contactless dining post-covid-19 . Live Mint
  • Rai, S. (2020, September 11). With food delivery bouncing back, Zomato plans IPO next year . The Print
  • Shrivastava, A. (2020, Feb 05). Zomato lets go of exclusivity for cloud kitchens . Economic Times
  • Harsh, U. (2020, Oct 20). Zomato pilots feature to post stories and reviews through the feed . Entrackr
  • Pragati, B. (2020, April 20). A guide to the winning Zomato marketing strategy . Talk Walker
  • Nandi, T. (2020, June 30). Zomato Gold is now Zomato Pro: Here are the extra benefits for customers . Live Mint
  • Dash, S. (2020, June 2). Zomato’s popular carnival Zomaland goes online as large gatherings remain banned due to Covid19 . Business Insider
  • FE Bureau (2020, October 14). Hotel association writes to Swiggy, Zomato, to cut commission charges on takeaway services . Financial Express

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Marketing91

Business Model of Zomato – How does Zomato make money?

June 9, 2023 | By Hitesh Bhasin | Filed Under: Business

The business model of Zomato revolves around providing food delivery services, information, user reviews and menus of partner restaurants.

Zomato’s business model has revolutionized the food business industries by incorporating various restaurants and making it convenient for people to find restaurants, provide feedback, check listings, and availability according to their choice of cuisine.

This food-platform is available across 24 countries in the world, providing insightful analytics to various restaurants. These analytics helps the restaurants to improvise and enhance their business.

In this post, we will be unraveling the key idiosyncrasies of the Zomato business model and understand how it manages all its operations and generates revenues. So, let us get started right away –

Table of Contents

Introduction to the Business Model of Zomato

Business Model of Zomato - 2

Zomato is an Indian food-based application that provides various services like restaurant search & discovery, online delivery, and a plethora of different cuisines to choose from depending on your price ranges.

The popularity and applications of Zomato have increased manifold in the last few years, which makes people wonder about the actual Business model of Zomato.

In the next few sections, we will be going through the various verticals of the Business model of Zomato, but first, let us have a look upon its creation and some other associated historical aspects-

Creation and Essential history of Zomato

Creation and Essential history of Zomato

Before analyzing the Business model of Zomato, it is better to know a little about the background of Zomato. Zomato was created by two Indian IIT graduates Deepinder Goyal and Pankaj Chadda in 2008.

Initially known as FoodieBay, the idea of Zomato popped up when Deepinder found his roommates searching for leaflets of menus to order food. By incorporating the menus of various restaurants in one single application, the task of choosing a restaurant and ordering food can be tremendously eased.

This led to the creation of Zomato.

Zomato has tremendously developed from a simple home project to one of the most used online food-based platforms in the world. It accommodates a list of restaurants and cafés belonging to various price ranges and cuisines.

But the real factor that makes Zomato so successful lies in the robust and robust business model which is initially presented. Different services that are offered by Zomato business model are-

  • Restaurant Search & Discovery
  • Online Ordering
  • Table Reservations & Management
  • POS Systems
  • Subscription Services

Different Segments of the business model of Zomato 

Business Model of Zomato - 5

The Business model of Zomato is hugely different from its contemporaries Swiggy and Foodpanda . This application was the pioneer of online food-based applications, and hence, it was a more significant challenge for Zomato to make the market accept the concept of “online restaurant-searching.”

The Business model of Zomato is a well-orchestrated plan which consists of various aspects for the smooth functioning of the application. Following are some of the critical elements of Zomato-

1) Customer Segments

Zomato consists of three primary segments i.e., Users, local businesses, and reviewers.

  • Users- Zomato provides a platform for people to search and locate restaurants according to their budget, location, and preferred cuisine. It also provides an online-based efficient food delivery service.
  • Local businesses – Zomato also provides a platform for restaurants and local cafes to promote their business and to reach a target audience, thereby generating revenue for various outlets.
  • Reviewers- Reviewers or content contributors are the people who provide positive ratings and comments. These comments are mostly synonymous with the quality of food and services provided by the restaurants.

2) Zomato Provisions

Zomato provides information on the restaurants and cafes to the customers based on their location, their choice of cuisine as well as the specified budget.

It also builds a bridge and facilitates communication between the partnered restaurants and the customers.

Zomato also has an organized and well-orchestrated pricing model for the online delivery services that they provide.

Their quality of services has also been enhanced due to the inclusion of Zomato Gold and Piggy Bank.

3) Notable alliances of Zomato

In recent years, Zomato has also partnered with various companies like Uber Taxi, London & Partners as well as online or electronic payment companies such as Visa and PayPal .

These partnerships have also played a significant role in enhancing the Business model of Zomato .

Having partnered with London & Partners, there were various ways in which the company aided Zomato. Some of them are specified below-

  • Finding a location to set-up an office
  • Assisting in staff hiring and, management recruitment procedures
  • Work placements and market research
  • Providing useful advice on policies, legal systems, handling of accounts, etc.

Now, after going through different aspects of Zomato business model, the time has come to delve into its revenue generation strategies -

How does Zomato Make Money?

Business Model of Zomato - 4

Zomato’s revenue took a significant leap this year as its valuation increased from $68M in the financial year of 2018 (FY18) to $206 M in the Financial Year of 2019 (FY19).

Various aspects of Zomato act as a contributory factor in the current generation of revenue. Following are some of the major factors-

  • The commission earned due to delivery services constituted about 75%of the total revenue generated in the year 2019. This is equivalent to an estimated amount of $155M, almost four times more than $8M made last year.
  • The newly introduced system of Zomato Gold provided complimentary food and beverage service to customers with gold-membership. This service alone generated about $30M in 2018 and $49M in 2019.
  • The ticket sales for various events organized by restaurants in partnership with Zomato generate a certain amount of revenue in the form of commissions. At the same time, consultation provided by Zomato to various restaurants to improve their business also adds to the Business model of Zomato.
  • Unlike the past few years, Zomato is now trying to balance and form an equilibrium between all its sources of revenue generation by not prioritizing advertising revenue more than the other sources. This again has been a contributory factor in the efficient Business model of Zomato.

Zomato is known to bring in massive revenue due to its various business operations , but most people are still doubtful of the actual revenue-generating system of Zomato.

The Business model of Zomato consists of various sources through which the application generates revenue. The following are some of the operations undertaken by the app-

Sources that play key role in helping Zomato make Money

Business Model of Zomato - 6

1) Zomato Advertising

Zomato provides people, access to multiple restaurants and allows them to rate the quality of the business that these restaurants offer.

These ratings are often reliable and useful. Various restaurants can promote their businesses by posting banners and pictures on Zomato.

This advertising method proves to benefit not only for restaurants but also for the app itself.

2) Zomato Subscription

Restaurants pay a certain amount of money to Zomato in exchange for various analytic tools and services provided by Zomato.

The food-based app has a variety of analytic tools and databases of information about the consumer through the use of cookies.

3) Zomato Event Organization

Zomato also organizes various events and food-based festivals by collaborating and partnering with multiple restaurants across the world.

The attendees pay a specified amount for the ticket. Zomato receives a certain percentage of the money collected. Hence, this aspect also proves to be very helpful for the app to generate revenue.

4) Zomato Food Delivery Services

Other sources of revenue for Zomato include Online food delivery service.

Zomato charges a certain sum of money called commission from restaurants in exchange for food delivery services.

5) Zomato Gold

Started in April 2018, Zomato Gold offers premium services based on membership.

In the facility, customers with gold-membership receive complimentary food and beverages from partnered restaurants.

Statistical analysis of Zomato’s revenue sources

Statistical analysis of Zomato’s revenue sources

As mentioned earlier, the Business model of Zomato is highly efficient, involving numerous sources which play a crucial role in generating revenue.

Following are some of the helpful statistics in understanding the Business model of Zomato-

  • Restaurant Advertising and marketing constitutes about 72% of the total revenue.
  • Event advertising contributes approximately 4% of the revenue generated.
  • A total of 12% of the total revenue is generated by the ticket which is sold during events organized by Zomato.
  • Consulting services and online-food delivery services constitute about 3% and 2% respectively.
  • Zomato Gold and other developed services are generating 7% of the total revenue to the customers.

Wrapping it up!

Zomato has wholly changed the functioning of the food and restaurant industry by bringing in the concept of creating universal access for various restaurants and cafes.

Zomato makes available outlets based on the location, choice of cuisine, and the budget specified by the clients. It also provides online-delivery service to customers which makes the process of “ordering food” smooth and efficient.

Zomato also proves to help enhance the business models of various restaurants, bistros, and cafes by providing them consultation as well as the chance to promote their business by uploading pictures and posters on the Zomato application. Zomato also organizes various events and festivals in partnership with multiple restaurants to generate revenue not only for themselves but also for the restaurants involved.

The Business model of Zomato is well-organized and orchestrated, encompassing the various aspects which act as revenue sources for the company.

Restaurant advertising, event advertising, ticket-selling during organized events as well as specialized services like Zomato Gold and Piggybank are some of the significant revenue-generating sources of Zomato. The food-based application not only focuses on advertising but also provides equal importance to other sources which are the primary reason why Zomato earned five times the revenue earned this year in comparison to the previous financial year.

Intending to enhance the revenue-generating system as well as to develop the services provided, Zomato also partnered with various companies this year, creating helpful and beneficial alliances.

These include Uber Taxi, PayPal, and Visa. All these reasons make Zomato one of the most efficient applications of recent times.

So, how effective, profit-driven and inspiring do you consider the business model of Zomato? Share with us in the comments below.

Liked this post? Check out the complete series on Business Models

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About Hitesh Bhasin

Hitesh Bhasin is the CEO of Marketing91 and has over a decade of experience in the marketing field. He is an accomplished author of thousands of insightful articles, including in-depth analyses of brands and companies. Holding an MBA in Marketing, Hitesh manages several offline ventures, where he applies all the concepts of Marketing that he writes about.

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The Economic Times

The Economic Times daily newspaper is available online now.

Zomato looks to deliver on ecomm — in a blink(it).

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Zomato could find itself up against ecommerce marketplaces like Amazon and Flipkart as it explores adding brands across a gamut of new categories to its 10-minute delivery platform, Blinkit.

Zomato Looks to Deliver on Ecomm — in a Blink(it)

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Deepinder Goyal's plan for Zomato's Blinkit that may worry Amazon, Flipkart

Zomato has “at least twice attempted to acquire and merge ecommerce enablement firm shiprocket”, the report claimed..

Zomato's Blinkit could reportedly add more brands across new categories as it aims to compete with ecommerce marketplaces like Amazon and Flipkart. As the company aims to push into the fast-growing direct-to-consumer (D2C) area it could build its own supply chain to directly source branded products as well as manage stock, Economic Times reported. Zomato would deliver these through Blinkit as it has “had conversations with individual brand owners for various categories to stock up inventory. This is being seen as a potential long-term growth driver,” a source told the outlet.

Through Blinkit, Zomato aims to push into the fast-growing direct-to-consumer (D2C) area. (Reuters)

Does this mean Zomato would own inventory?

No. As per the report, Zomato does not plan to directly own inventory. It would instead manage the flow of products for D2C brands.

How Shiprocket features in Zomato's plans?

Zomato has “at least twice attempted to acquire and merge ecommerce enablement firm Shiprocket”, the report claimed. Shiprocket works with many D2C brands at present and Zomato bought a stake in it in 2021.

What has Zomato done till now?

While talks with Shiprocket continue, Zomato has “leased one warehouse each in New Delhi and Mumbai to support Blinkit’s ecommerce push,” the report claimed.

“New-age D2C brands in categories like home needs, small electronics, beauty and personal care are looking at quick commerce as a growing channel for sales. Blinkit has a strong footing there. Now, Zomato wants to set up a backend structure, where it would work directly with brands and help them sell on Blinkit. With this, the company gets greater control over its supply chain," an industry watcher told Economic Times.

Has Blinkit been offering some of these products already?

Blinkit has been selling occasional items such as flowers, earthen lamps and stuffed toys. It has also featured high-value goods such as top-end smartphones.

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StartupTalky

Zomato Marketing Strategies: How the Brand Emerged as a Leading Food Delivery Service Provider

Anik Banerjee

Anik Banerjee , Akshat Hawelia

“Foodiebay” or “Zomato” as we now call it, was a startup founded in Delhi, now headquartered in Gurgaon, in July 2008. A website, Foodiebay.com , which initially started as a food review website containing the menus from popular restaurants nearby and gradually turned into the best food delivery service in operation in India, has certainly had a dream run!

Did you know that the founders, Deepinder Goyal and Pankaj Chaddah, were working with Bain & Company in Delhi when they looked at the long queue of employees lined up to order their food and came up with the idea of Foodiebay, which later led to Zomato?

For more such facts like “How was Zomato Started?” and its success story, name, logo, tagline, marketing strategies, investors, revenue, acquisitions, and more, you can follow Zomato - Delivering Delicious Happiness to Your Doorsteps!

However, if you are curious to learn about the key marketing strategies of Zomato that propelled the brand to achieve the success that it now boasts of, then you have landed on the right page.

Marketing Strategy of Zomato

Seo strategy of zomato, social media strategy of zomato, push notifications, influencer marketing, paid advertising campaigns, email marketing strategy of zomato, visual advertising of zomato.

What’s Unique in Zomato’s Marketing? Segmentation-Targeting-Positioning (STP) of Zomato Prominent Marketing Campaigns of Zomato

Zomato surely has an effective marketing strategy to power the brand, which has reigned in the successful home.

If we look at the statistics of the traffic from different sources and channels, we can see that Zomato derives major chunks of traffic from its searches and directly, being 53.63% and 43.34%, respectively, when compared to referrals, social media, or other paid marketing campaigns and other sources.

The marketing strategy of Zomato is a mixed marketing strategy that has successfully kept the traffic coming, thereby driving sales. The brand has always focused on innovation and agility.

Though it was one of the first brands to start with the food delivery service , companies came pouring in, and Zomato needed to ensure that they outpaced them in the long run. This was done with the help of a unique mix of innovative ideas, offering products and services at affordable rates and acquiring other companies.

Besides, the company has always believed in hard work, which was always there right from the first. In fact, Deepinder Goyal , one of the co-founders, also mentioned in one of his interviews that if something does not go as planned, then the core team of Zomato is always ready to pick it up and go through the same afresh, making the necessary changes . This kind of dedication always pays off!

zomato business plans

SEO strategy has no other alternative, and Zomato uses it to the fullest extent, as we have already seen most of its traffic (53.63%) comes from searches made online. This proves that Zomato is fueled by a foolproof SEO strategy , along with working hard enough to keep the brand soaring in the Google organic SERP results.

Now, you are definitely interested in learning the SEO strategy of Zomato, aren't you?

Here are some of the key insights into the Zomato's SEO strategy:

Keyword Targeted

Zomato targets over 900K keywords for their SEO purposes. Targeting these many keywords and further optimizing them organically always has an upper hand in SEO, which is why it has obtained a dominant position in search results.

Zomato is equipped with a colossal directory of food and restaurants, and this is a boon in disguise for their SEO. From the names of the restaurants to the names of the dishes, places, and more, everything happens to be keywords that boost the SEO of the brand. Even phrases like “restaurants near me,” “bars to dine in,” etc., also serve as useful long-tail keywords for the brand.

Pages on website

Zomato has over 1.4 Million listed restaurants, and each has its own pages, which are maintained regularly. This shoots the total number of pages on Zomato to over several million, which has its own advantages for the SEO of the website. We all know that the more pages on a website, the more the authority of the website, and the higher the possibilities of gaining crucial ranks on the search engines.

Linking of the URLs

Zomato boosts its domain authority by getting backlinks from countless websites that include high authority websites, including websites from .gov and .edu domains. The website currently has high authority backlinks from over 12.48 Million domains.

zomato business plans

Internal Linking

As we all know, the common SEO strategy is to link specific URLs relevant to the keywords. This helps search engines recognize our web pages and show relevant search results for the users, which also passively betters the ranks of the keywords.

The same thing happens with Zomato but on a larger scale, where the brand targets an overwhelming number of keywords and key phrases to link in their URLs.

Zomato Marketing Strategy - Social Media

Zomato's target audience is usually between 18-35 years old, and therefore it is imperative for the brand to work hard in its social media marketing ; and Zomato puts in the extra effort on creating unique social media ads and other engaging posts to stay connected.

As most of our social media platforms remain full of memes, if not with anything else, Zomato has wielded the meme marketing strategy successfully to its benefit.

It posts funny content that amuses the audience and drives them to order food at the same time.

zomato business plans

Zomato's push notification marketing approach is centered on sending individualized and relevant messages to its subscribers at the appropriate moment. The corporation segments its users and sends them personalized communications based on various data elements, including their location, previous orders, and preferences. For example, the company might use humor, pop culture references, or even personalized emojis in its notifications.

Zomato's influencer marketing strategy involves collaborating with food bloggers, vloggers, and social media influencers to generate talk about its brand and offerings. The organization collaborates with a wide range of influencers, from macro-influencers with millions of followers to micro-influencers with smaller but more engaged followings. Zomato also collaborates with influencers to organize events and contests.

The company, for example, may collaborate with an influencer to host a food-tasting event or to provide a free lunch to a lucky follower.

Though paid advertising is a temporary marketing strategy that a brand might opt for, it contributes a major part to keeping the engagement up. Effective paid advertising, along with organic optimization, significantly improves the search results of a brand, and Zomato never fails to do just that! The advertising strategy of Zomato focuses on retaining its audience.

The food delivery giant runs Google ads to target specific customers, which are displayed along with its organic results, and together, they help the brand target a wide range of keywords, which was impossible otherwise. Zomato Marketing Campaigns are generally paid advertisements that help them to engage with their audience.

zomato business plans

We are all connected via our emails and thus, email marketing strategy forms an important part of the marketing of a company. Zomato knows how to utilize this effective tool optimally.

Many brands use email marketing strategies to their benefit, but only a few can emerge with as witty and compelling email marketing strategies as Zomato does. To maintain its brand loyalty, Zomato combines compelling one-liners for the subjects and a fitting call to action to conclude them.

In one of its email marketing campaigns, Zomato themed its email on Mirzapur season 2, one of the most popular Amazon Prime Video series, to ride the hype that the series enjoys.

“ Munna Bhaiya invited you to a weekend ,” mentioned Zomato once.

At the start of another weekend, Zomato exclaimed, “ Enjoy a weekend to guddu to be true. ”

Furthermore, on another occasion, Zomato further used its email marketing strategy to create a resume for the all-favorite biryani. Here, the brand typically used phrases related to the food, like “ curryculum Vitae of Biryani, ” and replaced “ hire now ” with “ order now ” to form tempting email templates that ensured a roaring success!

Zomato’s visual advertising is as appealing as its other marketing strategies. The brand, in fact, come up with some of the best visual adverts ever since it came into prominence. Regardless of whether it is their video advertisements or billboards , Zomato always comes up with impressive content ideas to score well.

Zomato Marketing Strategy -  Billboards

What’s Unique in Zomato’s Marketing?

Zomato has been a leader in a food delivery service. Achievements they can easily boast of, but all of these boil down to the unique marketing strategies that Zomato has developed. Here are some of Zomato's marketing strategies that made it big:

Hitting overseas sooner than later

Though Zomato was set up first in India, in Delhi , it didn’t hesitate to take the risk of trying abroad. The company, which was founded in 2008, had already set up shops in 2012 in Dubai , the Philippines, Qatar , the UK, and other countries.

Making Major Acquisitions

As we have already mentioned, Zomato had a strong belief in acquiring companies along with innovating their own self, i.e., their products and services. In this process, they successfully acquired a list of companies like Urbanspoon, Uber Eats, TongueStun, Fitso, Mekanist, MapleGraph, Cibando, Nextable, Blinkit, and more such companies that were showing quite potential.

Though these acquisitions cost the company a fortune at the same time, they helped add the necessary momentum to the brand time and again.

zomato business plans

Diversified Offerings

Diversified Offerings of Zomato - Zomato Gold, Zomato Instant, Zomato Pro, Hyperpure

Along with offering a satisfactory food delivery service , Zomato brainstorms other additions the company offers its users now and again.

Zomato Gold was launched in November 2017 and serves as a premium service that provides matchless offers and discounts for users against a monthly subscription fee.

Furthermore, Zomato also started Hyperpure as an initiative that promises hygienic and high-quality supplies to restaurants in August 2018, which further expanded the list of the company’s offerings and for good!

The company also started Zomato Pro , a subscription service that offers unlimited free delivery on orders over a certain amount, as well as other benefits such as early access to new restaurants and exclusive discounts.

Unique Take on Twitter

Good communication always acts as a ladder that helps a business climb to success, and it is something that serves as an asset for every brand. Effective communication not only helps in sustaining a business but is also deemed an incredibly powerful tool to boost overall engagement. In Zomato’s case, it did just that!

Along with being engaging, Zomato’s voice on its social media handles turned out to be quite eccentric, which helped set the brand apart from its rivals.

For example, it was only in December 2020 that the brand started a marketing campaign on Twitter, which asked Twitteratis to come up with the most creative restaurant name that they could think of. This unique campaign started to bring in comments and replies like anything. Being active on this platform is Zomato's major marketing strategy.

Along with other marketing strategies and acquisitions, it is campaigns like this that powered Zomato. Twitter had even declared Zomato as the Best Brand Voice in 2020 .

Zomato Social Media Marketing - Twitter

Another classic example of Zomato’s unique voice on Twitter and other social media platforms is when the brand posted the groundbreaking Tweet that said:

“Guys, kabhi kabhi ghar ka khana bhi kha lena chaiye”

Traditional marketers would quickly stand against such a stance, but Zomato used reverse psychology to its benefit, which garnered a loud and unique response from all. The timing that the brand chose for the tweet was bang on because it was during ICC World Cup 2019, when it was customary for most of us to order food from restaurants.

This began to bring in waves of replies, comments, and tweets in return. Furthermore, Zomato’s tweet also brought in other brands, who joined in to support their unique post with their own creative taglines.

zomato business plans

Segmentation-Targeting-Positioning (STP) of Zomato

Segmentation :.

If we visit the demographic segmentation strategy of Zomato, we can discover that the brand targets the ages 18-35 . Along with ordering food online, people also visit Zomato when they want to dine out or research the restaurants nearby. Zomato has also discovered a larger target segment in the working professionals because most of them want to dine out frequently or order food delivered to their doorstep.

Furthermore, Zomato also brings in experiential events via multi-city food and entertainment carnivals to spread positive and merry vibes around food. Zomaland is a food and entertainment carnival that gathers some of the best restaurants, musicians, DJs, comedians, interactive installations, and carnival games under one roof. It's like an offline version of Zomato Collections, where it curates and puts together the greatest eateries in the city.

Besides, the brand also has further plans of launching new products and business lines associated with food both in the segments of food delivery and dining out.

Zomato's Digital Marketing Strategy

To sum up, Zomato's target audience is usually people aged between 18-35 years who love to dine out or have food delivered to their homes. It is the youth that the brand targets who often indulge in experiencing different food items with their friends and colleagues.

Zomato also caters to customers who refer to the ratings and reviews and then decide whether a place or a particular dish is good.

Positioning:

Over the years, Zomato has positioned itself quite well as a platform that brings restaurants, suppliers, users, food suppliers, and logistics partners together. It aims to create a world where the food producers and suppliers are bonded well with their consumers and work with mutual cooperation.

Zomato has earned a towering reputation not only among its target audiences but with others as well, where authentic reviews and recommendations from Zomato users are a must before deciding on a particular food item from a particular restaurant. It has truly become a go-to app for Indian youths.

Besides, with the launch of Zomato Gold , dining out has turned more pocket-friendly for its customers than it was ever before.

Overall, the STP analysis of Zomato is well-defined and targeted. The company has a clear understanding of its target customers and what they are looking for in a food delivery service. Zomato's positioning is also strong and consistent with its target market.

zomato business plans

Prominent Marketing Campaigns of Zomato

Zomato has also led a bunch of awesome marketing campaigns along with its impressive marketing strategies. Here’s a look at the brand’s most popular marketing campaigns and their famous advertising strategies:

Zomato Premier League

Zomato Marketing Campaigns - Zomato Premier League

Zomato has caught the Indians' nerve for cricket very early in their game and has crafted tellable IPL marketing strategies, which include TV ads and irresistible offers throughout the years.

Zomato has introduced the Zomato Premier League, which is an exemplary attempt of the brand at gamification. Here, the brand has exhibited a huge list of deals and discounts that are offered by the participating restaurants for their customers. Moreover, the users also stand a chance to predict the winners of the matches and avail of further discounts that will be unlocked whenever they are right in their predictions.

The brand promoted this initiative with TV spots and on social media. ZPL witnessed a huge success even last year, which saw participation from over 4 million users!

Zomato Gold Membership Programme

The company launched Zomato Gold as a paid loyalty program for the users of Zomato, who can subscribe to the scheme with a monthly subscription that would help them avail themselves of irresistible discounts and complementary dishes.

This initiative turned out to be extremely profitable for the customers of Zomato. Though Zomato Gold attracted numerous controversies from the restaurant partners, which led to the spreading of a lot of negative vibes, it has contributed over 30% of the gross order value in the food delivery business.

On-time or free

Zomato Marketing Campaigns - Zomato On-time or Free

Zomato launched the “On-Time or Free” campaign in December 2019, which was modeled on Domino’s Pizza. However, here in Zomato, the users can avail of this lucrative offer on all of its deliveries and not just on pizza, as it was with Domino’s.

You can also avail of this simply by tapping on the “On-Time or Free” button on the Zomato app, which will get you a refund if Zomato is unable to deliver food on time.

Zomato used the usual route of TV creatives, online advertising, and social media platforms to spread the word about this marketing campaign.

Mother’s Day Campaign of Zomato

Zomato ideated the Mother’s Day campaign in 2019, which didn’t fail to strike a chord with all audiences. Through this campaign, Zomato made it easier for the kids to order their mother’s favorite food using the app. This campaign gives Zomato a terrific opportunity to target the kids living in their homes and those who live away, allowing them to gift their mom using the Zomato app.

Zomato vs Zomato Campaign

Zomato Marketing Campaigns - Zomato vs Zomato

The campaign began in April 2023 and includes a series of advertisements that play on how individuals pronounce the company name. The campaign also features a series of social media commercials in which people from many walks of life argue about pronouncing Zomato correctly. This advertising strategy of Zomato is amusing and cheerful, and the public has responded positively.

Zomato vs Zomato is a brilliant and inventive approach to promoting the brand. This Zomato's marketing strategy has gained a lot of success. It also reflects India's rich culture and the many ways in which individuals speak and pronounce words.

Humans of Zomato Campaign

The Humans of Zomato campaign is a video series that tells the stories of Zomato's delivery partners. The campaign began in June 2022 and is now in its second season. The Humans of Zomato campaign's videos are all brief and touching. They highlight Zomato's delivery partners' problems and accomplishments and provide viewers with a behind-the-scenes look at the food delivery sector.

Some of the Humans of Zomato promotional videos show delivery partners who have overcome personal struggles to attain success. In one video, a delivery partner is a single mother who works two jobs to support her family. Another video shows a delivery partner who is differently abled and has never let his impairment prevent him from reaching his goals.

Who is the founder of Zomato?

Deepinder Goyal is the founder and CEO of Zomato.

What is the marketing strategy of Zomato?

Zomato's marketing strategy focuses on reaching its target market through various channels, including online advertising, social media, and partnerships with restaurants and other businesses.

How much commission does Zomato charge from restaurants?

Zomato charges over 20-25% on order value from their restaurant partners.

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  • Zomato may have new Blinkit 'plans' to challenge Amazon, Flipkart

Zomato may have new Blinkit 'plans' to challenge Amazon, Flipkart

Zomato may have new Blinkit 'plans' to challenge Amazon, Flipkart

How Zomato is trying to scale up BlinkIt's operations

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Zomato’s Business Model Analysis ~ Business Plan, Revenue Model, SWOT Analysis

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Zomato is an Indian restaurant search, discovery and an online food delivery service which currently operates in 10,000 cities in 25 countries including USA, India, Singapore and Brazil. It has connected with 1.2 million restaurants and has more than 80 million customers, 30 million photos and 10 million reviews on its platform. On 14 July 2021, Zomato officially went public and issued an IPO which was oversubscribed 38.2 5x. Today, it is valued at $5 billion dollars. Following is Zomato’s business model-

zomato business plans

Back in 2008, Deepender Goyal and Pankaj Chadha started a website called FoodieBay.com. At that time, it was used to scan restaurant menus and reviews, which does now too, but it has expanded to so much more than that. In 2010, it changed its name to Zomato to avoid any legal issues with its last four letters coinciding with eBay. In 2015, the company got into the food delivery business and launched various other products such as Zomato Gold and Hyperpure. So far it has received the funding of 223.8 million $ or 1500 crore rupees and its biggest investor is InfoEdge Ltd. which has a share of 54%.

zomato business plans

REVENUE/BUSINESSES

  • Advertising – Zomato charges commissions from restaurants to be placed prominently on the feed. These restaurants get services such as ad banners, additional exposure as well as improve discoverability. Advertising has become one of the major sources of revenue and key to Zomato’s business model.
  • Book – Via ZomatoBook, a person can book tables along with specifics such as which exact table. This helps restaurants to know beforehand how many people to expect, and to keep staff and inventory accordingly. Hence, restaurants pay for this service as well.
  • Food delivery – Zomato is most well-known for its online food ordering. It charges commission from the restaurants on the basis of orders, which is generally 15 to 20%. However, food delivery contributes in a very small way to the company’s total income due to huge competition from Swiggy and the need to keep discounts to maintain customers.
  • Base – Zomato offers a cloud-based POS system which helps small restaurants in their operations, which are managed on a single platform. This is ideal for restaurants which don’t have the budget to create their own software and system, as Zomato provides it to them at a cheaper cost.
  • WhiteLabel – Zomato provides services such as white label under which they offer to develop a customised food delivery app for the restaurant. It also works with restaurants and cloud kitchens for consultancy services using the data it collects. These apps are low-cost and come with features such as push notifications, requisite licences and operational enablement for such restaurant partners.
  • Trace – Zomato allows customers to trace and track their food delivery package and get the details of the food delivery partner.

zomato business plans

IS IT PROFITABLE?

Up until last year, Zomato was losing a lot of money in terms of per unit delivery, but since it decided to file for an IPO, this unit economics has become positive. In 2020, Zomato was losing Rs.30.5 with every single order. This year it has become Rs.22.9 profit per order. Zomato earns revenues such as commissions from restaurants as well as advertising money. On the flip side, its costs include paying its delivery partners, running discounts and other variable costs.

Zomato’s commissions have increased from Rs.43.6 to Rs.62.8 per order this year. The problem here is that if more and more restaurants are being charged higher commissions, they are becoming increasingly dissatisfied with their partnership with Zomato. Its customer delivery charge has also gone up from Rs.15.3 per order last year to Rs.26.8 this year. If the delivery charges go up, customers will be ordering lesser food. Zomato’s costs have come down from Rs.21.7 last year to Rs.7.3, which means that on average Zomato has the decreased its discount. In India, discount is a huge driver, especially for food items and reducing these discounts, might reduce its customers. Zomato has also reduced the fee that it pays to delivery partners which has left them dissatisfied.

zomato business plans

Zomato’s main advantage is that it has all the data of thousands of restaurants and millions of consumers who have used Zomato to order food. Zomato knows exactly what dishes are in Hugh demand and in which areas. Additionally, Zomato also knows what is the optimal price for particular dish. Hence, they know what is the best time to sell a particular dish. For example, Zomato knows that in Kolkata, Biryani priced at Rs.150 will become a bestseller from November to December. This way, Zomato is sitting on a data gold mine and they can use it very easily to launch their own food chain, eventually undercutting the existing food chains and make millions in profits.

zomato business plans

CLOUD KITCHEN – THE FUTURE

A cloud kitchen is in efficient restaurant which only gives out takeaway orders but has no dining space. It’s basically just a kitchen that takes online orders and gives it out for delivery. Why is this concept of a cloud kitchen a revolution in the making? This is because of its cost benefits over conventional restaurant. If you take a conventional 50 seater restaurant, it would require 6 lakhs of rental cost, 20 lakhs in rental deposit, 8 to 10 lakhs for licences, 8 to 15 lakhs for equipment, working capital which would include inventory, salary and electricity which would come up to about 20 lakhs. On the other hand, a cloud kitchen would reduce the need for space significantly and it would only cost about 50000-1 lakh for rent. Overall, expenses would go down by around 50% as compared to a conventional restaurant.

Cloud kitchens is a new concept in India, but there are a few successful cloud kitchens which use Zomato services. So, Zomato knows exactly which cloud kitchen is doing well and why. So, Zomato can open up its own cloud kitchen and list its products at the top with an aggressive pricing model to undercut its other cloud kitchens. This will maximise their profits and optimise their cost. Thus, it could be a perfect addition to Zomato’s business model.

zomato business plans

In conclusion, Zomato’s business model is solid, it identified a spectacular pain point in the business ecosystem, and used it wisely to connect and bridge the gap between customers and restaurants by providing efficient technology application. Yes, it is true that it has cost Zomato a lot to acquire customers, but once that is done, and customers are hooked on to this service, Zomato might have a bright future.

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The Economic Times

Zomato plans for Blinkit to deliver more via ecommerce

Z omato could find itself up against ecommerce marketplaces like Amazon and Flipkart as it explores adding brands across a gamut of new categories to its 10-minute delivery platform, Blinkit. This major push into the fast-growing direct-to-consumer (D2C) space would entail the Gurgaon-based firm building its own supply chain to directly source branded products and manage stock, multiple people aware of the plans told ET. It would deliver these through Blinkit.

Zomato, which is scaling up its quick commerce operations, has “had conversations with individual brand owners for various categories to stock up inventory. This is being seen as a potential long-term growth driver,” one of the persons said.

This wouldn’t involve the company directly owning inventory, but instead managing the flow of products for D2C brands, like marketplaces do.

Zomato declined to comment on ET’s queries.

As part of the strategy, the Deepinder Goyal-led firm has at least twice attempted to acquire and merge ecommerce enablement firm Shiprocket, said another person briefed on the discussions. Shiprocket, which works with many D2C brands, did not agree to it.

More Supply Chain Control

Zomato bought a stake in Shiprocket during the latter’s $185-million round in 2021, and, according to Tracxn, currently holds 6.6% in the logistics provider.

Queries sent to Shiprocket remained unanswered as of press time.

As discussion between the two continues, Zomato has leased one warehouse each in New Delhi and Mumbai to support Blinkit’s ecommerce push.

In addition to food delivery– its largest segment – and quick commerce, Zomato operates in the business-to-business grocery supply space with Hyperpure, and the going-out segment with an event ticketing vertical called Zomaland, as well as a dining out vertical.

Also read | Zomato steps up restaurant signups as slowdown bites

Quicker Ecommerce

Lately, with growth at its core business slowing, analysts have begun seeing Blinkit as Zomato’s next big growth story.

“New-age D2C brands in categories like home needs, small electronics, beauty and personal care are looking at quick commerce as a growing channel for sales,” said an industry watcher. “Blinkit has a strong footing there. Now, Zomato wants to set up a backend structure, where it would work directly with brands and help them sell on Blinkit. With this, the company gets greater control over its supply chain.”

India’s two largest food delivery firms, Zomato and Swiggy, have been looking to diversify. Last year, Swiggy rolled out its ecommerce marketplace Minis , which focuses on local delivery of brands across sectors with zero marketplace fees.

People said Zomato hopes to use hyperlocal warehouses and faster delivery timelines to its advantage and, through Blinkit, take on incumbents such as Walmart-owned Flipkart and Amazon.

For Blinkit, adding newer categories, especially in the D2C space, is an exercise to grow its average order value (AOV) – a metric that has played a big role in the company’s rising revenues as it minimises losses. In the December quarter, Blinkit’s AOV was Rs 635, up from Rs 553 a year earlier, and Rs 607 in the September quarter.

Also read | Blinkit’s revenue from ads sees over threefold surge in Q3

Margins would have been stronger, but for the thin slices on which most grocery businesses operate.

“For a large part, entry into newer categories has been responsible…for the increase in Blinkit’s AOV…but the company hasn’t given out details on its product mix,” said a Mumbai-based consumer sector analyst. “Typically, grocery products are less accretive on margins, so it's likely that profitability is also improving on account of higher (share in the) mix (of) products such as consumer electronics, beauty and personal care, etc.”

Flipkart has announced same-day deliveries in 20 cities for several products. Ecommerce firms are not competing in groceries but constantly shorten delivery timelines amid intensifying rivalry from quick commerce firms for select products.

Also read | Subdued consumer spends weigh on food-delivery growth: Zomato

The analyst cited above also pointed out Blinkit’s strategy of capitalising on events and occasions such as popular cricket matches, festivals, new year’s eve and holidays. “Through these occasions, Blinkit is marketed as a larger platform for D2C products and brands…the items move quickly through inventory and turn in higher margins in rupee value terms than groceries and FMCG,” he said.

Blinkit has been offering occasional items with lower ticket sizes such as flowers, earthen lamps and stuffed toys, in addition to high-value goods such as top-end smartphones.

For more news like this visit The Economic Times .

Zomato plans for Blinkit to deliver more via ecommerce

zomato business plans

First things first. Why do you need a business plan?

The restaurant industry is still known to be an unorganized one. Which is exactly why a business plan needs to be in place. It also is important to have a business plan so you can show your investors where their money is being put and even to get that bank loan you’ve been waiting on. A business plan is the blueprint for your restaurant where you chalk out the restaurant’s goals – short and long term ones, what your vision is for the restaurant and how you plan to make it a success. There are plenty of modules, guides and even softwares that can help you make these plans. But before any of that, you need clarity on what you’re going to do.

zomato business plans

You need to define your business for yourself and for the investors.

What kind of restaurant will yours be? Cafe, fine dining, casual dining, QSR, or any other.

What cuisines will you serve? Based on location, demographic and your own business interest, understand what cuisines will work for your restaurant.

What will be the USP? A unique theme or cuisine, events, or anything else.

A cafe serving American cuisine with a circulating library within the cafe and live music on Friday evenings. Here, the library and live music can be your USPs and something that customers will be drawn to.

Key factors to succeed

zomato business plans

In all businesses, there are a few key factors that ensure the success or failure of it. It’s not different with the restaurant business as well.

Location – List of ideal locations and why you want to open a restaurant there.

Demographic – The kinds of people you’re targeting – age group, floating population or locals.

Staff – Are you hiring experienced staff or new ones to be trained? What are your staff retention plans?

Food costs – How are you going to control food costs? Have you spoken to multiple suppliers before finalizing on the ones that would work out for your business?

zomato business plans

Investors need to know your strategy to success. We mentioned key factors earlier, but without a strategy, they are only just points on paper. From operations to staff, you need to have a clear strategy that you intend to follow.

Operations – Number of people required in various shifts, whether you’re going to be open all day or just for lunch and dinner services, supplier management, etc.

Home delivery – Do you have enough staff to run delivery operations? You can sure improve on profit margins, but can you handle the volume? Will it work in the locations ideal to run the restaurant in? Will you use a third party for delivery or in house staff? Will you go online or stay off it?

Costs – How are you pricing your menu – starting low and bump it after 6 months, or keep it stable for a year and raise it according to market later?

Financial analysis

zomato business plans

A business plan cannot be complete without a mention of financials. Even if it isn’t elaborate, you need to cover the important points. Cash flow, profit and loss statements, risk analysis, pricing, cost control, operational costs, sales forecast, quarterly and annual growth rate, etc. It’s not easy to work on financials if you don’t have experienced people working with you to guide you in the right direction. There is a lot to consider at the beginning so you don’t suffer later in the business.

Future plan and vision

zomato business plans

Even a restaurant, however unorganized the industry may be, should have a vision and a plan to achieve set goals.

Expansion – Do you plan to open other outlets in other locations of the city? Financially, will you be in a position to do so in the time set to achieve this goal? Do you want to expand the brand or open different kinds restaurants?

Diversification – Do you intend to add cuisines? Or events? How else do you plan to keep your restaurant relevant?

A good business plan should basically talk about what your restaurant will be like on paper and how you intend to run it bearing in mind the financials and other practical aspects. You must have an executive summary for your business plan where you condense everything into just two or three pages. A lengthy powerpoint presentation is outdated and tiresome to compile as well as read. Keep it simple and as clear as you can.

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  1. Business Model of Zomato

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  2. An Informed Guide to Zomato's Business Model

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  3. How Does Zomato Make Money? The Zomato Business Model In A Nutshell

    zomato business plans

  4. Top 8 Advantages to become partner with Zomato. #Zomato #ZomatoPartner

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  5. How does Zomato make money

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  6. Zomato Business Model: This is How Zomato is Making Millions

    zomato business plans

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COMMENTS

  1. Zomato plans D2C expansion of Blinkit to compete ...

    Zomato, known primarily for its food delivery services, is gearing up for a significant expansion into the fast-growing direct-to-consumer (D2C) space through its 10-minute delivery platform, Blinkit, according to a report by the Economic Times (ET).This move places Zomato in direct competition with established e-commerce giants like Amazon and Flipkart, signalling a strategic shift in the ...

  2. Zomato Business Model

    The Zomato business model represents innovation and transformation in the food technology industry. The company is an Indian multinational restaurant aggregator and food delivery company.

  3. Zomato plans for Blinkit to deliver more via ecommerce

    Zomato could find itself up against ecommerce marketplaces like Amazon and Flipkart as it explores adding brands across a gamut of new categories to its 10-minute delivery platform, Blinkit.This major push into the fast-growing direct-to-consumer space would entail the Gurgaon-based firm building its own supply chain to directly source branded products and manage stock, multiple people aware ...

  4. In-Depth Business Model of Zomato

    Zomato's business strategy is a well-orchestrated plan that includes several factors for the seamless operation of the application. Below are some of Zomato's important elements 1. Zomato Value Proposition The company model Zomato offers its clients a selection of values. The aim of Zomato Zomato's work is appreciated.

  5. Decoding the business model of Zomato and its revenue streams

    Founders Insights Uncover Zomato's business model and revenue streams, navigating their critical strategies in the dynamic food delivery landscape.

  6. How does Zomato make money

    Broadly, we can say that there are three customer segments in Zomato's business model: Local restaurants: Zomato helps restaurants enhance visibility to their target audience, provides opportunities for targeted advertisements, customer service & engagement, as well as track their performance using its analytical tools.

  7. Zomato's future plan

    August 30, 2022 21:30 IST Get Rediff News in your Inbox: Online food delivery platform Zomato has decided to narrow its focus on three key areas of food ordering and delivery; supplies to...

  8. 3 factors that can make Zomato profitable in the next few years

    Zomato offered a solution by being the bridge between the needs of the consumer and offering scalability/distribution to manufacturers (restaurants). As we all understand, the gross margins (ex-RM cost) are very high (around 65%-75%) in the food business, but the fixed overhead cost for the restaurant owners also remains heavy.

  9. Understanding the Zomato Business Model: A Complete Guide

    7 minute read How Zomato Works, Zomato Business and Revenue Model Explained Ashish Sudra March 21, 2023 Chances are, you have used Zomato at least once. But do you know how this popular restaurant discovery and food delivery platform works behind the scenes?

  10. Zomato Business Model

    By devadmin August 27, 2021 No Comments Zomato was launched in 2010, from the rebranding of Foodiebay, a food directory website. Like any other startup in india, food tech unicorn Zomato too had its ups and downs. In 2015, during the massive layoffs and losses, there were big question marks on the company's survival in the market.

  11. How Zomato plans to achieve a balance in profitability and growth?

    Zomato 's latest quarterly results showed its consolidated net loss narrowed to Rs 250.8 crore in the three months ended September 2022 from Rs 434.9 crore in the September 2021 quarter ...

  12. A Detailed Zomato Case Study-2023

    According to Ubersuggest data, Zomato ranks for around 7,544,348 keywords on June 2023. Its organic traffic is 77,874,441 users every month. The company lists the top keywords in its niche and designs a webpage for those. This indicates to the search engine that these pages are apt for the user's search query.

  13. Zomato Business Model

    Business Model Canvas: Zomato 1. Customer Segments 2. Value Propositions 3. Key Partners 4. Key Activities 5. Key Resources 6. Channels 7. Customer Relations 8. Zomato's Cost 9. Zomato's Revenue How does Zomato make money? Final Thought Related posts: Introduction to Zomato

  14. Business Model of Zomato

    The Business model of Zomato is a well-orchestrated plan which consists of various aspects for the smooth functioning of the application. Following are some of the critical elements of Zomato- 1) Customer Segments Zomato consists of three primary segments i.e., Users, local businesses, and reviewers.

  15. Add a restaurant

    Zomato enables you to get 60% more revenue, 10x new customers and boost your brand visibility by providing insights to improve your business. 1000+ cities in India 3 lakh+ restaurant listings 5.0 crore+ monthly orders Already have your restaurant listed? Search here and claim the ownership of your restaurant Frequently asked questions

  16. Zomato Looks to Deliver on Ecomm

    As discussion between the two continue, Zomato has leased one warehouse each in New Delhi and Mumbai to support Blinkit's ecommerce push. In addition to food delivery- its largest segment - and quick commerce, Zomato operates in the business-to-business grocery supply space with Hyperpure, and the going-out segment with an event ticketing vertical called Zomaland, as well as a dining out ...

  17. Zomato's Growth Story of Delivering Happiness at the Doorsteps!

    Its business plan is based on commissions. Zomato Pro membership: Through the Zomato Pro membership program (previously Zomato Gold), ... Zomato plans to use its wide network of restaurant partners to its advantage as it enters the catering industry. Zomato wants to get into the large-order service industry, as indicated by this strategic plan ...

  18. Zomato for Business

    Do you have any questions about Zomato for Business? Find the answers to the most common queries on how to claim your listing, manage your restaurant, use the app, and more. Visit our FAQ page and learn how to grow your business with Zomato.

  19. Deepinder Goyal's plan for Zomato's Blinkit that may worry Amazon

    Zomato has "at least twice attempted to acquire and merge ecommerce enablement firm Shiprocket", the report claimed. Shiprocket works with many D2C brands at present and Zomato bought a stake ...

  20. Marketing Strategy of Zomato

    Besides, the brand also has further plans of launching new products and business lines associated with food both in the segments of food delivery and dining out. ... it has contributed over 30% of the gross order value in the food delivery business. On-time or free Zomato Marketing Campaigns - Zomato On-time or Free ...

  21. Zomato may have new Blinkit 'plans' to challenge Amazon, Flipkart

    Zomato is reportedly planning to add brands across new categories to its 10-minute delivery platform, Blinkit, in a major push against e-commerce marketplaces like Amazon and Flipkart. This move ...

  22. Zomato's Business Model Analysis

    In 2020, Zomato was losing Rs.30.5 with every single order. This year it has become Rs.22.9 profit per order. Zomato earns revenues such as commissions from restaurants as well as advertising money. On the flip side, its costs include paying its delivery partners, running discounts and other variable costs.

  23. Zomato

    Restaurant Partner Login | Partner with Zomato | Join Our Network of Restaurants - Zomato for Business | Contact Us +91 97-38-38-38-38

  24. Zomato plans for Blinkit to deliver more via ecommerce

    Zomato bought a stake in Shiprocket during the latter's $185-million round in 2021, and, according to Tracxn, currently holds 6.6% in the logistics provider. Queries sent to Shiprocket remained ...

  25. Amazon, Flipkart Pose Challenge To Zomato's Blinkit Expansion Plans: Report

    Zomato has rented warehouses in New Delhi and Mumbai to bolster Blinkit's e-commerce expansion. Apart from its primary food delivery and quick commerce segments, Zomato also ventures into B2B grocery supply through Hyperpure and operates in the event ticketing segment with Zomaland.

  26. Zomato plans expansion of Blinkit to compete directly ...

    Zomato plans expansion of Blinkit to compete directly with Amazon & Flipkart Zee Business Video Team | Updated: February 19, 2024 18:21 pm

  27. Why Your Restaurant Needs A Business Plan

    A business plan is the blueprint for your restaurant where you chalk out the restaurant's goals - short and long term ones, what your vision is for the restaurant and how you plan to make it a success. There are plenty of modules, guides and even softwares that can help you make these plans.