360° SWOT Analysis of Zomato with Company Overview & Highlights

We previously looked at the Business Model of Zomato, which helped us understand how the organisation functioned. This time, we’ll take a look at the SWOT Analysis of Zomato, its competitor.

Zomato is an Indian based multinational online website that is a restaurant search and discovery service. It is one of the leading and successful brands in the IT & Tech sector. They provide clients with a highly structured and user-friendly platform to form an opinion of their preferred restaurants.

Zomato’s brilliant marketing strategies have helped them position themselves top within the industry. Marketing develops with time and changes based on the demands and preferences of the modern population. The majority of successful campaigns run via digital media. If you want to learn more about today’s effective marketing, check out our  Free MasterClass on Digital Marketing 101 taught by Karan Shah, CEO and Founder of IIDE.

To better comprehend the cause following Zomato’s consistent growth and maintenance of a strong position, let’s go through the SWOT analysis of Zomato. But before we begin, let’s learn more about Zomato, its founding, financial status, services and competitors.

About Zomato

Zomato is a worldwide restaurant aggregator headquartered in India that was launched in 2008. Deepinder Goyal, who is also the acting CEO, started this meal delivery firm alongside Pankaj Chaddah and Gunjan Patidar. Infoedge is the parent firm of Zomato. 

Foodiebay was the company’s original name when it was launched in July 2008, but it was changed to Zomato in 2010. Since then, Zomato has been the main source of information on restaurants and cafés, including their meal menus, user ratings, and food delivery choices from its partner eateries.

Zomato’s motto is “discover excellent places to dine around you,” and it certainly delivers on that promise. Zomato stands out and is far ahead of its competition due to its content and quality. 

 

Current News of the Brand

• Zomato share price hits 52-week high. Experts see more upside.
• Zomato shares jumped 120% in 8 months, and ICICI Securities raised the target price to Rs 160.
• Shark Tank India 3: After OYO Rooms’ Ritesh Agarwal, Zomato founder Deepinder Goyal joins the show.
• Swiggy launches ‘Lite’ plan, bundling for One program to take on Zomato Gold.
• India’s food delivery segment seen growing 10% sequentially in the July-September period: UBS

Buyer Persona of Zomato

Now that we have assessed the background of Zomato, let’s delve right into the SWOT Analysis of Zomato.

SWOT Analysis of Zomato

SWOT Analysis is an abbreviation for Strengths, Weaknesses, Opportunities, and Threats. This study focuses on the internal and external elements that might affect every company. Internal variables include strengths and weaknesses, whereas external ones include opportunities and threats. 

It is a tool for strategic planning and decision-making. It is usually more helpful if the SWOT analysis of Zomato is done keeping in mind an objective like taking advantage of a new business opportunity or responding to new trends, etc.

1. Strengths of Zomato 

The first tool of SWOT is the Strengths. These are the factors that put the company at the top and promising within the industry. Following are the strengths of Zomato –

• First Service Providers: Zomato was one of the first companies to start up their services in India, resulting in a large customer base of over 90 million customers. Other directories and various types of restaurant evaluations may exist, but owing to the user-friendliness of the Zomato app, it is frequently the first option among customers.
• Evergreen nature of the Restaurant Industry: It is common knowledge that the restaurant industry is an evergreen industry. Of course, there might be some kind of slump or economic decline which might affect the industry but it will always be going to pick itself up. This is such a steady and mandatory industry that this is bound to stay for all times and is only going to grow in the future.
• User-friendly Interface: Zomato has already bagged several awards for its fantastic design and the user-friendliness of the app. It makes it easy and fast for the customers in their search for restaurants in your vicinity or at the locations you’re planning to visit.
• Well Connected: Zomato is pretty well connected with various restaurants and pubs and receives daily feedback from both customers and the restaurant personnel. This focussed approach had helped in building the brand image and its reputation.
• Strong funding: Since this brand has been established in several nations over the years, the firm has received excellent funding and backup from various organizations and hence has a lot of funds available for further improvement of the app.
• Profitable: Last year it was declared that Zomato is profitable in 24 countries it is operating in. Since Zomato is a start-up company and has strong funding, it is very commendable that this is turning out profitable because there are many cases where well-funded start-up companies are still under heavy losses despite being established for several years.
• Brilliant Marketing Strategy: Zomato despite being an online entity does its marketing both online as well as offline. The ads created by Zomato are so creative and realistic that it makes an instant connection with the customers. It has a strong presence and a massive following on various social media platforms and with its daily updates about its latest offers and discounts, it does its digital marketing superbly.
• Leading Food Delivery Service: Zomato has become a household name since its launch, the company along with its competitor Swiggy is dominating the Indian Delivery Service Market.

2. Weaknesses of Zomato 

• Security Issues: Over its tenure till now, the app has been hacked several times and the data of at least 17 million users have been put at risk. These kinds of security issues are like a living hell for a developing internet company like Zomato.
• Inefficient Expansion: Since it has been 10 years since this app started and it has established itself in 24 countries till now, it has been steady growth. But it could have been better given the huge funding it possesses. Zomato is allowing other services to establish themselves in this particular niche despite being already present in those countries first. This should not be allowed as they are paving the way for tougher competitions by themselves only.
• Increased Competition: Competition from search engines and other similar food discovery and delivering apps like Swiggy creates a lot of hindrance for the growth of the brand in any particular location.
• Recent Losses: Zomato, and its competitors in general, are viewed by investors as loss-making ventures with small margins. The company reported losses in the year 2022.

3. Opportunities for Zomato

Opportunities is a useful analysis conducted within every business. This provides the organization with a few specific goals they need to focus on to stay a step ahead of their competitors. Let’s look at what Zomato can seize – 

• Scope of Expansion in the Future: Zomato needs to expand its reach to various other countries and it needs to establish its base faster. It is a major issue in the service sector that services can be very easily copied and implemented. Hence Zomato needs to establish and expand itself faster than others in order to stay ahead of the curve.
• More Acquisitions: There are many new players emerging in this field daily, both small and big. Zomato can initiate a partnership with several of its competitors and at the same time keep an eye on the latest technologies and trends happening around to stay ahead and grow further.
• Online Users: In the past few years, the number of smartphones and internet users has increased tremendously. And so companies like Zomato have a very lucrative opportunity to approach new users and convert them into their customers. Also due to the covid-19 pandemic, the platform’s growth has further enhanced. 

4. Threats to Zomato 

Last, under the segment of SWOT Analysis of Zomato, we have the Threat. These factors are important to consider as they protect the organization from dealing with potential losses and more.

• Fragile Business Model – We can not forget that Zomato is the first one in this niche to arrive in the Indian market. It sure has the early-mover advantage. There was enough scope for the firm to exploit its business model in the international market. But lately, the company’s business model has somewhat turned fragile. Any new tech company with enough knowledge and expertise in this field can now exploit the model.
• Policies by the Government – Various issues like identity theft, cybersecurity, data privacy issues, etc have made the general public aware and really cautious about their online activity. Due to these reasons, governments are bringing up new policies and regulations for these internet platforms to follow. These policies really hinder the steady flow of the business model of the companies.
• Tough Competition – As this is quite evident, the online food delivery market has very tough competition. These harsh conditions make life difficult for the company in order to grow and prosper.
• Security breaches – The company faced security breaches in the years 2015 and 2017. This issue can reoccur, thus the company must take strict measures in order to prevent it.

A SWOT Analysis provides every organization with a specific goal and hence helps businesses like Zomato avoid harmful risks and benefit from opportunities. This brings us to the conclusion of the SWOT Analysis of Zomato. We’ll wrap up the case study in the segment below. But before that, we would recommend you watch this video to gain an understanding of  Zomato’s marketing strategy.

Failed Campaigns of Zomato

While Zomato has achieved remarkable success in the digital food space, they’ve encountered challenges along the way. One such instance was the “Dine & Dash” controversy.

What was the issue?

Zomato faced a significant backlash when some users exploited the cashless delivery option, ordering food and refusing to pay upon delivery.

What backlash did the brand face?

This unethical practice not only led to financial losses but also tarnished Zomato’s reputation as a reliable food delivery platform. Angry restaurant partners and delivery personnel added to the brand’s woes.

What did the brand do in this situation?

Zomato swiftly addressed the issue by enhancing its security measures and educating users about the consequences of such behavior. They also collaborated with restaurants to mitigate the impact on their partners.

Did they take down the campaign or change it as a whole?

Zomato did not take down the campaign but incorporated stricter user verification protocols to prevent similar incidents in the future. They also launched a public awareness campaign against dine-and-dash practices. This incident showcased Zomato’s ability to learn from failures and adapt quickly in the digital age, reinforcing their commitment to ethical practices and the interests of their restaurant partners.

Top 5 Competitors of Zomato

• Swiggy: It is a major competitor in the online food delivery space, offering a wide range of restaurant options and speedy delivery services. They constantly innovate to enhance the customer experience.
• Uber Eats: It backed by the global ride-sharing giant Uber, competes fiercely with Zomato by providing convenient food delivery services. They leverage the Uber brand for recognition.
• Foodpanda: It is known for its diverse restaurant partnerships and regular discounts. They aim to capture a significant market share by catering to budget-conscious diners.
• Dineout: It focuses on providing diners with reservations and discounts at restaurants. Their unique selling proposition lies in facilitating restaurant bookings, making dining out a seamless experience.
• Yelp: It is a global player in restaurant reviews and recommendations, and competes indirectly with Zomato. They are known for their extensive database of restaurant reviews and ratings.

Conclusion

Zomato is one of the leading companies in the online food delivery market. It is imperative that Zomato should expand its platform and improve its reach to a greater audience base. They should invest more in new technologies and grab hold of them. Additionally, they should take a look at those security issues and make sure that they got resolved. And they should establish their base in other 3rd world countries to gain the most out of them.

Zomato is increasing its reach day by day. By now it is already in 25 countries with 1.5 million listed restaurants and this data will not stop here. They should begin establishing their base in other 3rd world countries to gain the most out of them.

Zomato is an online-based service platform, hence they make the best use of the digital platform. They utilize various digital marketing channels such as SEO, Emailing, and Content Marketing to promote their newer service and offers. 

To be a part of leading online service providers such as Zomato, gaining expert knowledge of the Digital Marketing industry is vital. IIDE provides training in a variety of digital skills and knowledge, including Short Term Certification Courses that can bring you up to speed in as little as five days. Check out  IIDE’s short-term certification courses, which include topics like social media marketing, media planning, and SEO.

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