How Zomato works: Zomato Business Model and Revenue Generation
Zomato is one of the most successful on-demand online food delivery platforms in India, that helps it’s customers explore different food places sitting in the comfort of their home and get it delivered at their doorstep. Discovered by Deepinder Goyal and Pankaj Chaddah in 2008, Zomato has now become a very well-known online food delivery platform all over the country and also has managed to create it’s presence in the international market.
With it’s different sustainable business and revenue model, the well-known company has managed to remain on the top of the market. Zomato also has the food search engine, working same as the Google search engine, but only with the variation of exploring various restaurants and food. In today’s time, the food aggregator has it’s main focus on online food deliveries, restaurants reservation and consultant services.
Success Story Behind the Idea of Zomato
Till November 2010, Zomato was known as ‘Foodiebay’, but when the founders Deepinder Goyal and Pankaj Chaddah saw the number of people ordering food from different restaurants, their idea of online food delivery took birth. In the year 2012, Zomato had spread it’s presence across the global market. Now present in the 22 countries including Australia and New Zealand with more than 1 million restaurants, Zomato receives 1.25 million orders daily. With it’s reliable and smooth service, Zomato enables customers to get a meal with just a click without any trouble.
With it’s use-friendly app, Zomato has provided it’s users with so much of assurance with keeping their data secured. Customers and users can share their opinions, complaints and ideas on the app. Also, with it’s unique feature to let the customer share their stories behind their food experience, Zomato has managed to win hearts.
How Does Zomato Work? Zomato Business Model
Zomato, with it’s rapid growth in the market since 2018, has now been one of the successful startups in India. To get into the insights of it’s business model, even the well-established buisnessmen and entrepreneurs are excited. So, to know about how Zomato manages to make so much of profits even after offering such exciting discounts, let’s get to know how it’s business model works.
Value Proposition
The main focus of this online food delivery platform is to suggest local and nearby restaurants to the users and receive orders from them. The customers can place their orders from their favorite restaurants based on the ratings and reviews that’s been shared by the other users. This is one of the main reasons why many other companies are looking forward to make the similar app like Zomato.
With it’s unique and sustainable business model, Zomato ensures quick doorstep delivery that works as a delight for the food lovers. On the other hand, restaurant owners also increase their services and online visibility by listing themselves on the app. Here, we can say that Zomato fills the gap between restaurants owners and consumers. Once the order is placed, users can track their orders and delivery timings on their phone with the help of Zomato’s spectacular services. With the advanced features like filter and search options, it has now become easier for the users to showcase their options and choices.
Zomato also provides Gold Membership to build customer loyalty and better services. With Zomato’s Gold service, customers can enjoy additional perks like amazing discounts on food and beverages, which has incredibly helped Zomato to generate $49 million in the year 2019.
Key Partners
· Uber Taxi
Zomato has tied up with Uber Taxi to provide customers with easy ride if they want to visit the restaurants to dine out. This makes it easier for the users as they wouldn’t have to use two apps: they can book a cab and book their seats in the restaurant altogether in one app.
Other Business Partners: Zomato has built up an alliance with other electronic payment companies like Visa and PayPal for the convenience of customers.
Zomato Revenue Model
Zomato has made it’s presence in the food market globally since the start. It has generated various means for it’s income and a few of them are listed below. These insights helps to understand how Zomato earns such a huge profit with it’s unique Business and Revenue Model.
· Zomato Ads
Ads are one of the most trusted and beneficial aspect for any business and Zomato has made the best use of it. It has become the best and trusted source of income for the food lovers app, as it offers advertising policy to restaurants to increase its profit. Advertisements generates more than 70% of Zomato’s revenue through different channels. The restaurant owners can put out their banners on the site to increase their visibility through it.
· Zomato Food Delivery Services
Zomato charges 20–25% commissions from the restaurants that work with it. This gives a huge benefit to it as the commission works on every order placed in each restaurant.
· Zomato Event Organizations
Zomato being Zomato, to make their presence noticeable, collaborates with certain restaurants to host multiple events such as New Year’s Eve, Christmas celebrations, Eid and many more events to boost their sale. This strategy works as people have to purchase tickets to attend such events.
· Zomato Subscription
With their unique ideas, Zomato has some advanced tools that helps them to identify customer’s behavior like what they are searching for, what is trending, which dish is in demand, etc. In exchange of such information, Zomato makes a deal with Restaurant owners and makes them pay a certain amount for such information. Based on this, restaurants can improvise their services for the customers.
Zomato’s business model and revenue streams are perfect for those who are still new in the market to get inspired. It saves users time and offers them great deals and services at each level from online-ordering to getting their food delivered.