Zomato’s Success Story and Revenue Insights

Zomato business model spins around providing meal ordering as well as delivery services. Besides this, the platform makes it easier for users to have quick access to information, menus of partner restaurants, and user reviews. It has transformed the food business industry by incorporating various restaurants and makes it convenient for food lovers to search for restaurants, check listening, provide feedback, and availability according to a variety of cuisines.

The food platform allows its service across 24 countries globally and offers insight analytics to various restaurants. The analytics help restaurants to improvise and improve their business. In 2008, Zomato started a restaurant listing directory; the meals delivery company has come a long way then ventured into multiple business segments. Let’s have a look at what is Zomato. How does the delivery platform work? Business and revenue model, and how the business giant makes a profit.

What is Zomato?

Zomato is an Indian meal ordering and delivery platform and multinational restaurant aggregator founded in 2008 by Pankaj Chaddah and Deepinder Goyal. The delivery provider menus, information, and user reviews of restaurant and meal delivery options from partner restaurants in selected cities. In 2019, the service offered its delivery service in 24 countries and 10,000 cities.

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Zomato Success Story, Investment & Acquisitions Details

In 2021,

Zomato IPO raised almost 9,375 crores; it was the most talked-about experience as the Indian startup went public. All this was just after COVID when many things became uncertain; this means Zomato was performing all the things correctly. And looking to its success, it becomes more crucial to have insight into Zomato revenue and business model.

Zomato focuses on online food ordering and delivery; the food-search engine has partnered with many restaurants and establishments to provide improved services to customers on their demand. Zomato is considered the world’s largest meal delivery aggregator, which connects hungry people with food. The online ordering and delivery platform collaborates with local restaurants to make a sustainable ecosystem possible.

Zomato Business Model: How the Delivery Platform Works?

Zomato’s operational model is very effective. The platform makes it easier for customers to use websites or apps to search, discover, and find different restaurants to order foods, book tables to dine out and perform other activities. The local restaurant receives the order and prepares the meal; later, the proprietor platform algorithm chooses the delivery provider and assigns delivery.

Delivery personnel aren’t employees but partners to the company; they have the right to accept or reject the order. Once the job is accepted, the provider delivers it to the mentioned location. Most customers can make payments at the time of delivery or through digital methods. Customers can check reviews, ensuring to help Zomato to enhance its services and make smart choices while placing orders.

Zomato delivery model is divided into three steps:

Customers use a delivery app like Zomato to order from existing food joints, and restaurants have partnered with it;
The company pings the nearest apt delivery partner to deliver the order to a customer;
Delivery partners deliver the order;
Delivery partners and Zomato get commissions.

The dine-out operating model, Zomato, differs from the usual delivery service, depending on the subscription-based Zomato pro offering. The premium subscription-based service provides its members additional discounts and advantages on delivery services and dining out.

Key Activities of Zomato to Have Insight into!

Before tapping into other business segments, the online delivery platform focuses on the online restaurant directory. It partners with eateries joining the platform to improve visibility and charges them a commission for prominently on the feed. They pay for the promotion and offer amplified conversions from Zomato users. The primary activities of Zomato are divided into seven categories, includes:

Restaurant Listings;
Food Delivery;
Live Events;
White Label Access;
Zomato kitchens;
Hyperpure;
Consultancy

The Zomato business model is undoubtedly a well-orchestrated plan that consists of different factors that smoother the functioning of the delivery platform. You can even start offering the same service and experience to customers with an app like Zomato. You can have a quick look at delivery platform to provide your ideal customers with top services – https://whitelabelfox.com/delivery-anything-app

Key Partners of Zomato: How the Digital Platform Attracts Investors

Zomato business model can be categorized as follows:

Local Restaurants

The online ordering and delivery platform partners with restaurants to increase online presence and visibility to draw the ideal customers and tap into potential customer bases.

Users

The digital platform acts as a panacea for its users by rendering them a platform where they can discover, explore different restaurants, eateries, and book a table, dine out or order food.

Delivery Personnel

The online ordering and delivery platform provides doorstep delivery services to customers—Zomato partners with delivery providers who complete the entire chain by providing part or full-time delivery services.

Reviewers

Customers can review cafes, other food places, restaurants and provide relevant details about cuisine and other details in graphical or texture format.

An app like Zomato has partnered with many businesses such as Paypal, Visa, and Uber Taxi. The online food ordering app had a tie-up with Uber taxi to provide customers with quick access to ride booking. It helps us eliminate the requirement of using two different apps, that brings together a combo solution to book ride and search nearby restaurants, everything from one place. The different alliances assist in getting set-up locations, market research, handling political and legal issues, hiring and other procedures, accounting, and so on.

How Does Zomato Make Money?

Zomato has undoubtedly become a big name in the meal ordering and delivery industry since its inception. In 2021 the brand had revenue of $394 million, while there has been a steady increase in hyperpure revenue from 2020 to 2021, as it was measured around $1.8 million & $14.7 million, respectively.

Image: (Source)

The diversified collection of activities that plays a crucial role in making its revenue are:

Advertisements
Subscriptions
Consultancy And Data Monetisation
Food Delivery Services
Live Events
Zomato Kitchens

Advertisements

Restaurants that wish to improve their visibility and online presence can collaborate with a restaurant advertising agency to effectively promote their business. These agencies specialize in advertising strategies tailored to the food industry, helping restaurants reach a wider audience. A good source of revenue for these agencies comes from restaurants that pay for targeted promotion and advertising services, ensuring they stand out in a competitive market.

Zomato Subscriptions

The subscription-based freemium model of Zomato, “Zomato Pro,” provides customers with different discounts and offers on food delivery and dining out services. Zomato Pro offers 1+1 on meals while 2+2 on drinks for Zomato Pro users; the subscription also helps customers get their deliveries faster than ever before. It provides a 3-month membership at 200 and an annual pro membership at 750 in India only.

Consultancy & Data Monetisation

Zomato can quickly analyze users’ behavior based on data repositories. It gives an insight into which food is trending, what kind of meal is in demand, what people are more likely to search and order, and so on. Restaurant owners have to pay Zomato to get the information and optimize and improve their services as per growing requirements.

Food Delivery Services

Meal delivery is an integral part of the link chain between restaurants, delivery partners, and customers. The customers pay fees to eateries, which in turn give commission to the delivery platform.

Live Events

The online ordering and delivery platforms like Zomato charges an entry fee for live events and carnivals organized in collaboration with different restaurants. The purchase of tickets becomes a source of revenue for the meal delivery platform.

Zomato Kitchens

Zomato offers a kitchen infrastructure service to eateries and local outlets that want to expand their business at different locations without spending more. It helps to get more restaurant partners and generate revenue at the same time.

What Does The Future Hold For Zomato?

Zomato’s compelling business model has helped the platform make its name the largest aggregator globally, and aspiring entrepreneurs have a lot to learn. Many food owners are also thinking of developing a platform similar to Zomato. It offers a combined solution to their ideal customers’ requirements and takes care of the entire process until the order reaches its doors.

If you are also looking for a Zomato clone and wonder how much it costs to develop an app like Zomato, then you need to understand that the development price might differ and depend on various aspects like features added, platform & technology used, and much more.

Zomato is always working on different business endeavors while improvising the existing applications and services it offers. Zomato has far more heights to attain and has a bright future. You can also grab better results by choosing to develop an excellent solution similar to Zomato. If you have any queries about the development process, features, and more, don’t hesitate to contact us at [email protected].

Frequently Ask Questions

Zomato is a leading Indian restaurant discovery and food delivery platform that connects customers with restaurants through its app and website. It offers a variety of services, including food delivery, restaurant reviews, and online table reservations. Zomato operates across numerous cities in India and internationally, catering to a wide range of dining preferences and delivering food to customers’ doorsteps.

Zomato acts as an intermediary between customers and restaurants. Here's how it works:

Restaurant Listings: Restaurants list their menu and details on Zomato’s platform, allowing customers to explore their options.
Order Placement: Customers browse through restaurant menus and place orders via Zomato's app or website.
Food Preparation: Once an order is placed, the restaurant prepares the food.
Delivery: Zomato’s delivery partners pick up the food and deliver it to the customer's doorstep.
Payment: Payments are made through the app using various methods, including credit/debit cards, online wallets, and cash on delivery.

Zomato operates through a multi-revenue model, incorporating several income streams:

Restaurant Listings & Advertising: Restaurants pay Zomato for visibility on the platform through premium listings and advertising options. This increases their chances of receiving more orders.
Commission from Food Delivery: Zomato charges a commission fee from restaurants on every order placed through the platform. The percentage can range from 15% to 30%.
Zomato Pro: Zomato offers a subscription service called Zomato Pro, providing users with exclusive discounts and offers at partnered restaurants.
Zomato Gold: This membership program allows users to get special deals on food and drinks at select restaurants.
Online Ordering for Restaurants: Zomato offers its own online ordering solution for restaurants to manage their orders directly through the app.
Data Analytics: Zomato provides valuable insights, data, and analytics to restaurants for a fee, helping them improve their operations and marketing strategies.

Zomato generates revenue through several key channels:

Commissions from Restaurants: A percentage of the total bill is charged as a commission on every order placed through the platform.
Advertising & Promotions: Restaurants can pay to promote their listings, allowing them to gain higher visibility on the app and attract more customers.
Zomato Pro: Zomato offers a premium membership that grants users exclusive offers and discounts at select restaurants, generating additional revenue through subscriptions.
Zomato Gold: The Gold membership program provides benefits like free drinks, meals, and discounts at partner restaurants, which generate revenue from both customers and restaurants.
Delivery Charges: Zomato charges a delivery fee from customers, depending on the distance between the restaurant and the delivery location.
Restaurant Solutions: Zomato provides a restaurant management software for ordering, billing, and analytics, charging restaurants for using these tools.

Zomato charges restaurants a commission fee for every order placed through its platform. This commission can range from 15% to 30%, depending on the agreement between Zomato and the restaurant. The commission percentage is based on factors such as:

Restaurant Type: High-end restaurants may negotiate a lower commission due to their established customer base.
Location: Restaurants in larger cities may face higher commission fees due to higher demand and competition.
Order Volume: Restaurants with a higher volume of orders may receive better commission rates as a result of their business performance.

Zomato Pro is a subscription-based service that offers members exclusive discounts and offers at select partner restaurants. For a fixed monthly or annual fee, users can access benefits such as:

Discounts: Up to 40% off on food and drinks at partnered restaurants.
Exclusive Offers: Priority reservations, special deals, and exclusive access to certain restaurants. Zomato Pro aims to increase customer retention by incentivizing frequent use of the platform and encouraging users to explore more restaurant options.

Despite its success, Zomato faces several challenges:

Profitability: Zomato has struggled with profitability, as it incurs high operational costs for technology, marketing, and logistics.

Competition: Zomato faces intense competition from other food delivery giants like Swiggy, Uber Eats, and local players.

Restaurant Dependence: Zomato's revenue is heavily reliant on restaurants, which means any fluctuation in restaurant partnerships, pricing, or commission rates can impact the business.

Delivery Logistics: Managing a fleet of delivery partners and ensuring timely delivery across wide areas is a logistical challenge.

Zomato quickly adapted during the COVID-19 pandemic by implementing several measures:

Contactless Delivery: Zomato introduced contactless delivery to ensure the safety of customers and delivery partners.
Promoting Hygiene: Zomato implemented stringent hygiene protocols for delivery staff and restaurants to maintain safety standards.
Support for Restaurants: Zomato extended financial assistance and marketing support to restaurants, helping them stay operational during the pandemic's restrictions.
Expanded Delivery Services: Zomato focused on delivering essential items like groceries and medicines through its platform, reaching a broader audience.

Zomato has expanded its operations internationally, entering markets such as the UAE, Lebanon, Sri Lanka, and Indonesia. The company follows a localized approach in each region to cater to local food preferences, cultural differences, and operational challenges. Zomato’s strategy includes:

Acquiring Local Competitors: Zomato has acquired smaller food delivery platforms like Uber Eats India to consolidate its presence in foreign markets.
Local Partnerships: Zomato partners with local restaurants and delivery services to adapt to the local market and ensure smooth operations.
Customized Offerings: Zomato tailors its services, including menus, payment methods, and marketing, to meet the specific needs of international customers.

Zomato has significant growth potential in both the Indian and international markets. Some areas of future growth include:

Expanding to Tier-2 and Tier-3 Cities: Zomato plans to reach more small and medium-sized cities, where online food delivery is gaining popularity.
Diversification of Services: Zomato is exploring new service offerings such as Zomato Kitchen (cloud kitchens) and Zomato Pay (payment solutions) to generate additional revenue streams.
Technological Innovation: Zomato is investing in technology, including artificial intelligence and machine learning, to improve its delivery logistics, customer experience, and restaurant operations.
Partnerships and Acquisitions: Zomato may continue to expand through partnerships and acquisitions, strengthening its market position.

Deep Faldu – CTO
Author

As the Chief Technology Officer, Deep Faldu spearheads innovation at White Label Fox, ensuring seamless, scalable, and high-performance app solutions. His technical expertise, problem-solving skills, and commitment to excellence help businesses thrive in the competitive digital landscape. He continuously explores new technologies to enhance product efficiency and user experience.