Quick Read
Explore the Zomato business model in this comprehensive case study. Understand how Zomato’s innovative approach to food delivery and restaurant discovery drives its success in the highly competitive food tech industry.
Learn From Asia’s #1
Digital Marketing Institute
AI-Based Curriculum
Dive in to the future with the latest AI tools
Placement at top brands and agencies
& more...
In our previous article, we discussed the Business Model of Netflix, a global streaming service platform that offers a vast library of movies, TV shows, and original content across various genres.
In today’s blog we will uncover the secrets behind the business model of Zomato, a revolutionary food chain app that has transformed the food industry by bridging the gap between hungry customers and amazing restaurants.
Their innovative platform integrates a vast selection of restaurants, allowing you to browse menus, leave reviews, check ratings, and discover hidden gems – all at your fingertips. This comprehensive value proposition extends beyond just discovery.
Zomato empowers users in 24 countries with insightful restaurant analyses, helping them make informed decisions and ultimately, enjoy a more satisfying dining experience.
But how does Zomato manage such a massive undertaking, and how do they generate revenue? Buckle up, because we’re about to delve into the fascinating world of Zomato’s business model, uncovering the secrets behind their success.
Let’s embark on this journey together and discover how Zomato continues to revolutionise the food scene, one delicious bite at a time.
About Zomato
Source: Google
Zomato, a name synonymous with discovering delicious eats, has its roots in 2008. Founded by Deepinder Goyal and Pankaj Chaddah, the company initially started as ‘Foodiebay’ before evolving into the Zomato we know today (2010).Their mission? To simplify restaurant discovery and delivery for users across the globe.
Zomato’s reach extends far beyond its Indian origins. They now operate in over 24 countries, including Sri Lanka, Qatar, Turkey, Brazil, and Indonesia. This impressive expansion reflects their commitment to catering to a global audience of food enthusiasts.
Financial success has also followed Zomato’s growth. The company proudly boasts profitability in all 24 countries it operates in. This achievement is even more remarkable considering their strategic move in February 2017 to offer a 0% commission option for partner restaurants.
Zomato’s potential was recognised early on, attracting recurring investments from Info Edge India, a company known for identifying promising online ventures. This recognition by industry leaders further solidifies Zomato’s position as a major player in the online food industry.
Now that we’ve explored Zomato’s history and success. The Zomato business model will reveal the strategies behind their impressive growth and how they continue to revolutionise the way we experience food.
Quick Side Note: Ever dreamed of shaping how millions see a brand? Digital marketing is where the magic happens. Imagine crafting captivating stories, understanding what makes people tick, and turning casual browsers into loyal customers. It’s like being a storyteller, data detective, and creative genius all rolled into one!
If this sparks your curiosity, consider exploring an online digital marketing course. This programme will equip you with the skills and knowledge to thrive in this dynamic field. Don’t let self-doubt hold you back – explore your potential and discover the exciting possibilities a digital marketing career can offer.
Or, if you’re curious about the inner workings of the digital marketing world? Take a free digital marketing masterclass and gain valuable insights firsthand. This masterclass is a perfect opportunity to demystify the field and discover if it aligns with your interests.
Business Model of Zomato
Source: Google
Zomato’s business model is very different from Swiggy and Foodpanda’s contemporaries. This application was the innovator of online food applications, therefore Zomato’s acceptance of ‘online restaurant searches’ was a major issue for the market. This business plan of Zomato is a well-orchestrated one which includes several factors for the seamless operation of the application. Below are some of Zomato’s important elements
Zomato Case Study: Brand’s Market Share & Market Analysis
Zomato holds a significant market share in the Indian food delivery market, estimated at around 45% as of 2023 (source: RedSeer). The business model of Zomato leverages its strong brand recognition, extensive restaurant network, and user-friendly interface to maintain market leadership. Market analysis indicates a growing demand for online food delivery and restaurant discovery services, driven by urbanisation and changing consumer lifestyles. Zomato’s strategic focus on expanding its delivery capabilities and improving customer experience ensures its competitive edge.
Zomato Case Study: Product Offerings
We cannot talk about the business plan of Zomato without mentioning its product offerings. It includes online food delivery, restaurant discovery, table reservations, and Zomato Pro membership for exclusive discounts and benefits. The platform also provides Zomato Market for grocery delivery and Hyperpure for restaurant supplies. Zomato’s diverse services cater to various customer needs, from dining out to ordering in, enhancing its appeal to a broad audience. The introduction of new features like Zomato Originals (video content) and contactless dining reflects its commitment to innovation and customer satisfaction.
Zomato Case Study: Target Audience
Source: Google
Zomato caters to a broad spectrum of urban dwellers seeking convenient food solutions, encompassing millennials, busy professionals, and families. Tech-savvy users flock to Zomato’s platform for online restaurant discovery and food delivery, while Zomato Pro offers exclusive perks for food enthusiasts.
This comprehensive approach ensures broad market coverage and fosters user engagement. Zomato empowers value-conscious diners to search for restaurants based on budget, location, and cuisine.
Delivery devotees can order food directly through the platform, while restaurants leverage Zomato as a powerful digital marketing tool to reach a vast audience. Even data-driven businesses benefit from Zomato’s rich dataset of user reviews and preferences.
By understanding and catering to these diverse groups, Zomato’s business plan is to become a leader in online food discovery and delivery.
As you can see from Zomato’s success, understanding your target market is crucial in any business, especially in the digital marketing world. Knowing who your ideal customer is gives you a significant edge over your competitors.
Intrigued by the power of understanding your target market? Consider enrolling in a digital marketing course in India. These courses can equip you with the skills and knowledge to identify and reach your ideal audience, propelling your business towards success.
Zomato Business Model: Funding & Investors
Zomato’s business model thrives on a strong financial foundation. The company has raised over $2.1 billion in funding from notable investors such as Ant Financial, Info Edge, and Sequoia Capital. Their 2021 IPO, raising $1.3 billion, marked a significant milestone in this journey. Strategic investments in technology, market expansion, and acquisitions like Uber Eats India have solidified Zomato’s market position. This continuous inflow of capital fuels innovation and growth, allowing Zomato to stay ahead in the competitive food tech industry.
Zomato Business Model: Revenue Model
Source: Google
The Zomato revenue model primarily relies on commissions from restaurants for food delivery services. In 2022, Zomato reported revenue of $1.2 billion, driven by its growing user base and increased order volumes. The platform also generates revenue from advertising, subscription fees for Zomato Pro, and delivery charges. The revenue model of Zomato ensures financial stability and supports its continuous investment in technology and market expansion.
Since its inception, Zomato has increased its global position in the culinary business. Zomato has produced numerous streams of income, and some are given here, helping you understand how Zomatos makes enormous profits by using its business model and diversity.
Zomato Business Model: Marketing Strategy
The company’s marketing strategy leverages a multi-pronged approach which further delivers Zomato’s value proposition completely. The company utilises targeted advertising, promotional campaigns, and user-generated content to build brand awareness and loyalty. Innovative marketing campaigns and creative social media interactions further enhance customer engagement. Zomato’s data-driven marketing approach ensures personalised experiences and optimises customer acquisition and retention.
In the digital age, even industry giants like Zomato recognise the immense power of digital marketing. They’re not alone – companies as diverse as Red Bull and Nestle all leverage this essential tool. Despite their different industries, these companies share a common thread: a well-defined digital marketing strategy.
Curious to learn their secrets? Dive deep into the fascinating world of digital marketing case studies on the marketing strategies of Red Bull and the marketing strategies of Nestle. You won’t be disappointed – their innovative approaches are sure to inspire you!
Zomato Business Model: Value Proposition
Zomato’s success hinges on a compelling value proposition. They offer a one-stop shop for convenient and reliable food experiences. Zomato’s working model covers an extensive network of restaurants, lightning-fast delivery, and a user-friendly interface create a seamless experience for customers. Zomato Pro further enhances this proposition by providing exclusive perks and discounts, solidifying a strong and satisfied user base.
Through this, Zomato’s value proposition is underpinned by a robust business model. Zomato’s QAAV model (Quality, Accessibility, Affordability, and Variety) ensures a win-win situation for both, customers and restaurants.
Here’s how it works:
Quality: Zomato prioritises maintaining an impartial platform and partners with restaurants that meet high hygiene standards. Their ‘Hyperpure’ initiative ensures fresh, high-quality ingredients.
Accessibility: Zomato’s constant expansion into new cities and towns increases accessibility for users. They’ve also broadened their services to include table reservations, corporate catering, and city-wide delivery options.
Affordability: Zomato understands the importance of budget-conscious consumers. Zomato Pro and strategic partnerships offer various ways for users to save without compromising quality.
Variety: Zomato breaks down geographical barriers, allowing users to explore a vast array of cuisines from local favorites to international delights. They provide valuable information and reviews to assist users in making informed choices.
By focusing on these core principles, the business model of Zomato has been able to establish itself as a leader in the online food discovery and delivery landscape. Their commitment to a strong value proposition and a well-defined business model ensures continued growth and success.
Business Model Of Zomato: How Does Zomato Make Money?
Some of the ways Zomato money earns money are listed below
1. Zomato Advertising
Source: Google
Zomato charges restaurants a fee to showcase the restaurant on its site. The higher the hierarchy and the number of times it shows on the top results, the more money the restaurant pays Zomato. Zomato also suggests restaurant-specific ads to show on the site such as banner ads and small pop-ups.
Restaurants can pay to have their events promoted and various other features. This structure is a crucial part of the business model of Zomato, allowing the platform to generate significant revenue by offering various promotional options to restaurants seeking increased visibility and customer engagement.
This advertising and promotional strategy is a significant part of the Zomato revenue model, ensuring that restaurants gain visibility while Zomato generates substantial income.
2. Zomato Delivery Charges
Zomato charges a nominal fee to bring the food from the restaurant to your doorstep. The delivery fee is further distributed among the restaurant owner and the brand. The company then in turn pays the delivery person a certain fee as his/her salary. GST levied on foodstuffs by the restaurant holder is 18% as mandated by the government.This structure is a key part of the business model of Zomato, ensuring efficient operations and fair compensation within the service chain.
3. Zomato Subscription Charges
Source: Google
Zomato charges certain fees as subscription charges toToers. This is a marketing strategy to entice the customer to buy more at a considerable rate. For the same, Zomato charges fees. The fees once paid for the subscription are available for a certain time and then can be renewed as the time comes. This is called Zomato Gold and Zomato Pro.
4. Zomato White Label Access
Source: Google
Zomato also enables services such as Zomato Whitelabel, under which they offer restaurants the ability to develop customised food delivery apps. It also works with cloud kitchens and restaurants for consultancy services. As part of the business model of Zomato, the company collaborates with select restaurant operators to help identify locations for expansions at a minimal fixed cost but with increased options for the user. It provides the requisite licenses and operational enablement for such restaurant partners.
5. Zomato Kitchens
Source: Google
Zomato partners with entrepreneurs to establish and manage Zomato Kitchens under several labels to provide kitchen infrastructure services for selected restaurant operators. This helps companies invest INR 35 Lakh and more to finance restaurants in the right locations. Zomato says that it provides investors with a monthly return in the region of INR 2 Lakh to INR 4 Lakh with 180+ kitchens already in operation. This approach is a significant component of the business model of Zomato, ensuring efficient service and consistent returns for investors.
6. Zomato Live Events
Source: Google
Zomaland is one of India’s largest food carnivals, offering a variety of culinary delights, fun games, and an amazing artist lineup to ensure your weekend is filled with food, fun, and frolic! You can access this event by purchasing entry tickets through the Zomato app or Paytm Insider. Zomaland is an event where you can enjoy artistic works, fun activities, and a wide range of food varieties.
The event took place in Pune, Delhi, Bangalore, Hyderabad, Mumbai, Jaipur, Chandigarh, and Kolkata in 2019. Due to the pandemic, it is currently scheduled online. This initiative highlights zomato’s value proposition, showcasing how Zomato enriches customer experience through unique and engaging events
Business Model Of Zomato: Strategic Alliances & Partnerships
Zomato has formed strategic alliances with various stakeholders, including restaurants, delivery partners, and technology providers. Partnerships with local eateries ensure a diverse menu selection, while collaborations with logistics companies improve delivery capabilities. Zomato’s alliances with payment gateways and financial services enhance transaction convenience. These strategic partnerships are integral to the business model of Zomato, supporting its operational efficiency and market expansion.
London & Partners
To extend its virtual food presence in European countries Zomato has established a collaboration with London & Partners. In charge of supporting Zomato with London & Partners
- Search for a London office location.
- Support for the recruitment process
- Intelligent wage advice
- Recruitment of management
- Positioning of work
- Research into the market
- Consultancy, policy, and compliance with accounting and legal procedures.
Uber Taxi
For Uber Taxi users, Zomato has allied to arrange a mode of transport to their restaurant. The smart invention eliminates the ability to cope with two different applications. Especially when clients strive to review, select and find the ideal dining spot, all clearly and straightforwardly.
Business Model Of Zomato: Technological Innovations
Source: Google
Zomato invests significantly in technology to enhance its platform capabilities. By utiliasing AI and machine learning, the company offers personalised recommendations, predicts orders, and optimises delivery routes. Innovations such as Zomato Gold (now Zomato Pro) and Hyperpure highlight Zomato’s dedication to leveraging technology for the benefit of customers and restaurants. This technological focus is a key aspect of the business model of Zomato, ensuring continuous improvement and maintaining a competitive edge in the food tech industry.
Technology is undoubtedly shaping the future, and Artificial Intelligence (AI) is poised to become present everywhere. Understanding AI and its applications will be a valuable asset in your professional journey. No need to stress about where to begin! Enrol in this free ChatGPT masterclass to clear your doubrs and prepare for the future.
While AI is exciting, let’s not forget another game-changer: digital marketing. This field offers immense potential for those interested in carving a path in the digital landscape. If you’re curious to learn more, consider exploring the Post-Graduate Program in Digital Marketing. This program can equip you with the skills and knowledge to thrive in the ever-evolving digital realm.
Zomato Case Study: Corporate Social Responsibility (CSR)
The company’s CSR initiatives prioritize sustainability, community support, and food security. Through this business model of Zomato, the company aims to minimise food wastage with initiatives like Feeding India, which distributes excess food to those in need. Additionally, Zomato promotes eco-friendly packaging and delivery practices to support sustainability. Community engagement efforts, such as providing meals during crises, underscore Zomato’s dedication to social responsibility, seamlessly integrating these values into its operational strategy.
Zomato Business Model: Key Activities of Zomato
- Zomato has an advertising-based user database reservoir. The company distributes ads for various good-income eateries.
- Zomato is aimed at ensuring that the information flows authentically for its users to solve two main questions: what they can eat and where to dine.
- Zomato was also launched in the foodstuffs industry and afterwards introduced a subscription option for food discovery solutions.
- Zomato has a large user database repository and employs various analytical algorithms to find essential data. This is the food for partner restaurants and restaurants’ customer service.
- Zomato also helps restaurants construct their robust app with a framework known as plug-and-play.
Business Model Of Zomato: Top Competitors Analysis
- Swiggy: A major competitor in the Indian market, Swiggy offers similar food delivery services and has a strong presence in urban areas.
- Uber Eats: Acquired by Zomato in India, but still a significant player globally, offering food delivery in multiple countries.
- Foodpanda: Operates in various markets, known for its extensive restaurant network and quick delivery services.
- Domino’s Pizza: Competes in the food delivery segment, particularly for pizza, with a strong brand presence and efficient delivery system.
- Deliveroo: A leading food delivery service in Europe and other regions, known for its premium service and wide restaurant selection.
Let’s be honest – Competition is everywhere even in the the digital marketing world. The digital marketing landscape is brimming with possibilities, but with so many options, choosing the right course can feel overwhelming. Don’t worry, we’re here to help. Explore options in various locations, like digital marketing courses in Delhi, digital marketing courses in Faridabad, and digital marketing courses in Patna, to find a program that aligns with your learning style and career goals.
And if you don’t know where to begin, our complete library of digital marketing blogs offers valuable insights and guidance. These resources will help you navigate the available options and identify the perfect course to propel you forward, regardless of your location.
With this, we come to the end of the Business Model of Zomato. In the below section, we shall conclude this case study.
Learn From Asia’s #1
Digital Marketing Institute
AI-Based Curriculum
Dive in to the future with the latest AI tools
Placement at top brands and agencies
& more...
Conclusion
By introducing the notion of providing access to different restaurants and cafes, Zomato has entirely revolutionised the functioning of the food and restaurant business. Zomato offers outlets according to the area, selection of kitchens, and customer budgets. It also provides consumers with an online supply service that ensures a seamless and effective ‘ordering’ process.
Zomato also contributes by giving them advice as well as the ability to advertise its business by hooking images and posters in Zomato’s application, to improve the business model of various eateries, bistros, and cafés.
In conjunction with several restaurants, Zomato organises various events and festivals to create not only revenues for itself but also for the businesses participating. The Business Plan of Zomato is properly planned and coordinated, covering several parts of the enterprise as sources of revenue.
FAQs About Business Model of Zomato
Q1. What is Zomato's business model?
Zomato's business model includes online food delivery, restaurant discovery, and table reservations, generating revenue from commissions, subscriptions, and advertising.
Q2. How does Zomato make money?
Zomato makes money primarily through commissions on food delivery, advertising, subscription fees for Zomato Pro, and delivery charges.
Q3. What are Zomato’s main products?
Zomato’s main products include online food delivery, restaurant discovery, table reservations, and Zomato Pro membership.
Q4. Who are Zomato’s competitors?
Zomato’s top competitors include Swiggy, Uber Eats, Foodpanda, Domino’s Pizza, and Deliveroo.
Q5. How does Zomato use technology?
Zomato uses AI, machine learning, and data analytics for personalised recommendations, order prediction, and delivery optimisation.
Q6. What is Zomato Pro?
Zomato Pro is a membership programme offering exclusive discounts, benefits, and priority reservations at partner restaurants.
Q7. How does Zomato target its audience?
Zomato targets urban dwellers, including millennials, working professionals, and families, through diverse services and personalised marketing.
Q8. What is Zomato’s market share in food delivery?
Zomato holds approximately 45% of the Indian food delivery market share.
Q9. What are Zomato’s CSR initiatives?
Zomato’s CSR initiatives include Feeding India, promoting sustainability, and community engagement programmes during crises.
Q10. What is the Zomato revenue model?
The Zomato revenue model includes commissions from restaurants, advertising revenue, subscription fees, and delivery charges.
This business model of Zomato is surely an eye catching one. No doubt Zomato is the recent favorite of all those who love ordering food delivered at their doorstep.
Zomato surely knows how to capture market.they understand the need for food delivery at doorstep.