Co-Founders: Deepinder Goyal and Pankaj Chaddah (both IIT Delhi) in 2008
Industry: Food Tech
Type of Business: It is both B2B (Advertising) and B2C (Listing of restaurants and Online food delivery)
Description:
Zomato is an online food ordering and restaurant guide, where you can search for nearby restaurants and cafes or order food online and get it delivered to your doorstep. You can also get accurate information about the menu, ratings, bestsellers, etc., It allows users to give reviews, ratings, opinions, and upload/view photos which makes it more social and user-friendly. It works on a commission business model.
Zomato's mission is to ensure that “Nobody has a bad meal”
Revenue Streams:
Zomato has multiple revenue streams:
1. Food delivery - Zomato charges a commission to the restaurants on the basis of online food orders. It receives a commission cut, for each order placed (Commission cut percentage varies from region to region), around 25-28% usually.
2. Restaurant Listings - Initially, Zomato was just a listing platform and a restaurant directory. The listings of restaurants generate advertising revenues whenever a restaurant joins the platform (when wanted to get listed on Zomato). Also, if a restaurant wants to get placed prominently on the zomato, it has to pay a commission to the platform. Restaurants can pay to have their events or offers promoted, which improves visibility to the customer and stand a chance for a higher conversion rate to maximize profit and increase the customer base.
3. Subscriptions - Zomato Pro and Pro plus (previously Zomato Gold) are the subscription programmes for consumers and users, While users pay a subscription fee to access the Zomato pro membership which gives exclusive privileges and discounts (like Buy 2, Get a dish/drink free) at the best restaurants across dine out and delivery offers. Pro members will also get priority delivery on Zomato, which means any order placed by a Pro member will jump to the front of the real-time queue when we look for a Zomato Valet to deliver your order. Zomato also claimed that if a subscriber doesn’t save 2x the subscription fee of Zomato Pro within the subscription period, Zomato will auto-refund the subscription fee at the end of the year. Restaurants also pay a monthly fee to be part of Zomato’s bouquet of offers. It also has subscriptions for restaurants to get featured on Zomato Pro restaurants. Also, Zomato has a huge amount of data that knows what and where a customer wants to eat, and what the consumer is searching for and knows all this information through the cookies. Zomato shares this data with the restaurant partners using which they flash their discount offers on food.
4. Live events - In collaboration with certain restaurants, Zomato hosts multiple events on specific occasions like Christmas Eve, New Year’s Eve, etc., Also it has its own exclusive event, Zomaland, a food and entertainment carnival. Zomato charges users an entry fee to attend Zomaland, where besides food, they can witness live musical performances., Standup comedy and other acts. It organised the carnival in cities like Delhi, Pune, and Bengaluru.
5. Zomato Kitchens - This is a kitchen infrastructure service offered by Zomato, where they will work with certain restaurant owners who want to expand their services to other locations at a nominal cost. It means entrepreneurs can easily establish their restaurant at the right location with minimum fixed and operating costs.
USP:
It has an exhaustive range of menus and regularly updated information, thereby, bridging the gap between consumers and restaurants through the digital platform. It ensures to provide every piece of information that a user is looking for in a restaurant.
Target:
Zomato targets people who are between 18 to 35 years of age.
Back Story:
It was initially founded by the name "Foodiebay", but later changed it to "Zomato" in 2010 as they were unsure if they would "just stick to food" and also to avoid a potential naming conflict with eBay. They started off initially by uploading the soft copies of the menu cards on the website. Eventually, they entered into online food delivery.
Major Acquisitions:
Zomato has acquired 12 startups globally. A few of them are Menumania, Urbanspoon, Uber Eats (India operations). It will be acquiring Blinkit (previously Grofers) soon.
Competitors: Swiggy
Trivia:
In May 2020, Zomato also began delivering alcohol in West Bengal, Jharkhand and Odisha after obtaining the permission of the governments in these states.
10-minute Delivery:
Zomato recently announced that it aims to deliver food in 10 minutes. The company, which also once touted using deliveries by drones, announced that it will begin delivering food in 10 minutes in its home city of Gurugram in what appears to be a first by any food delivery firm across the globe. The company is calling this new service Zomato Instant. It insists that it won’t pressure or penalize its delivery partners to ensure delivery in 10 minutes. In fact, it says the optimisation doesn't happen on the road, instead, they take the help of dark stores. However, this is being re-evaluated as the platform hasn’t been able to meet the time target for all orders during its pilot in Gurugram.
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