Zomato Case Study. Company info – How Zomato Earn Money – Zomato Business Model [Key Partners, Cost Structure, Customer segmentation, Competitors].
Zomato Company info:
|Founder||Deepinder Goyal, Pankaj Chaddah|
|Headquarter||Gurgaon, Haryana, India|
|Valuation (2019)||$2 Billion|
|Number of Employees (2019)||5,000+|
What is Zomato?
Zomato is an online portal for an Indian restaurant and Food Delivery start-up. It is founded by Deepinder Goyal and Pankaj Chaddah in the year 2008 by the name of Foodiebay as a restaurant directory. In November 2010, Foodiebay was renamed as Zomato.
How Zomato Earn Money:
1. Food Delivery
Zomato charges a certain commission from the restaurants for online food delivery. The commission is charged by the Zomato as per the order. Commissions from restaurants also depend on if the delivery is fulfilled by the Zomato or the restaurant delivers the order on their own.
Though, this source of income is not as high as compared to other revenue sources.
Advertising is one of the main sources of earning for Zomato. Restaurants & cafes pay the Zomato to get more & more visibility of their events or offers on the Zomato app, which increases the chance of sell of food items for that very restaurant.
Around 50-60% revenue of Zomato comes from these advertisements and promotional ads.
3. Live Events
Zomato has started this revenue model two years back. In this model, Zomato organizes an event on any occasion with the partnership of various restaurants to establish various food courts along with organizing some live events. People who attend these events have to pay an entry fee and Zomato receives a certain percentage of these entry fees as commission. Apart from entry fees, they also get various sponsors to promote the products and services. Food organizer also looks for such opportunities where they can promote their product and so they find these events a perfect one for them.
4. Zomato Gold
Zomato Gold is a premium subscription offered by Zomato. It was launched in April 2018. to provide membership-based premium services. Zomato gold allows the holder of this subscription to gets complimentary food and drinks while ordering food from their partner restaurants and cafes.
5. Restaurant Subscription
The second most major revenue source for Zomato is Restaurant Subscription. In this, restaurants pay a certain fixed amount of money to the Zomato monthly for an analytical tool which helps the restaurant operators to know about the consumer preferences of food, what they want to eat, where do they prefer to eat, what food items they are looking for on their app and what food do they avoid. Zomato collects all this information from consumers using cookies and made an analytical tool especially for the same called “Zomato Order”. This tool is given to the restaurant operators for a fixed monthly fee.
6. Zomato Kitchens
Zomato Kitchens is a service offered by Zomato to provide a good kitchen Infrastructure for the selected restaurant. It helps to expand the restaurant business at more locations keeping the minimum fixed cost possible and without any hassle. An approximate investment of INR 35 Lakh or more along with minimum area size approx 2000-3000 sq. ft. is required to set up this.
7. Zomato White Label Access
Zomato launched a service with the name “Zomato White Label Access” under which they offer the service of App Development for the restaurants. In this, Zomato develops a customized food delivery app for the restaurants from where they can connect to their customers without having to keep the Zomato app.
8. Zomato Consultancy
Zomato already earned a huge database of consumers and also have a good analytical tool to know details about the consumers from their location to their preferences in food. So, if anyone willing to start a restaurant in any area where Zomato serves, they can consult Zomato to know every detail for the proper establishment of restaurants in exchange for a certain amount of charges fixed by Zomato.
Zomato Business Model:
- Delivery Persons
- Technology Setup/Improvements
- Delivery Cost
- Employees Salary
- Consumers who prefer eating at home (Online Food Delivery).
- Users looking for various cuisines across different restaurants.
- Restaurants who want to promote their business.
- Restaurants don’t offer home delivery.
- Reviewers (content contributors).
Zomato’s top competitors include:
- Uber Eats
- Just Eat
Also Read: How to Start a Startup [Complete Guide]