In 2024, you may at least once order from Zomato in the week. This success didn’t happen overnight; the Zomato team has been working hard for nearly a decade. Zomato is a popular on-demand food delivery app that helps you discover new restaurants and have food delivered right to your door. The platform also offers detailed information on nearby restaurants, including their menus, average prices, ratings, and reviews. Do you know how this popular restaurant discovery and food delivery platform operates behind the scenes? How is this popular in the 24 countries across the world? According to Statista, Zomato had an order volume of over 647 million in the financial year 2023. Moreover, Zomato has approximately 80 million monthly active users and operates in 24 countries and over 3,200 cities in 2023. To understand why and how Zomato generates so much revenue from food delivery by itself, let’s explore the business model and recent rapid growth. In this blog, we get into the specifics of how Zomato works, Zomato’s startup story, and how it generates revenue insights. Get ready and buckle up!

What is Zomato & How Does It Work?

Zomato is a popular and easy-to-use app for finding nearby restaurants, whether you want to dine in or order food online. It gives you reviews, menus, and ratings to help you choose the best spot. You can order food and enjoy it at home with just a few clicks. Zomato offers fast delivery, making it perfect for food lovers. Zomato uses its human network to deliver food. Zomato food delivery drivers receive orders using their cell phones, just like Uber drivers do. The company uses GPS to match supply and demand as quickly as possible. Moreover, Zomato is a food search engine that is similar to  Google and covers a large range of cuisines and restaurants. What started as a home initiative has grown into one of the biggest food aggregators in the world. Apart from facilitating food access for individuals across all settings, Zomato collaborates closely with restaurants to establish a sustainable ecology.

How Does Zomato Work?

Zomato has experienced fast growth since 2008, making it one of India’s top start-ups. Additionally, the company reported a net loss of ₹346.6 crore for the December quarter of 2022, despite significant growth in its monthly transacting customer base, which grew by 116% in 2022. Even seasoned business owners and entrepreneurs are intrigued by how it runs and generates significant profits despite providing alluring discounts. Zomato’s main job is to recommend nearby restaurants and take your orders. You can place orders at your chosen restaurant based on ratings and reviews from previous customers. It offers convenience to you and helps proprietors expand their small local food industry.

• You can browse different restaurants on the Zomato app or website and place food orders.
• Specific restaurant owners accept orders and prepare meals.
• Once the meal is prepared for delivery, it will be given to the delivery companies.
• Deliveries are made to the customer’s preferred location.
• You can make payments using available payment choices and evaluate them based on their experiences.

This ease of use encourages foodies to place online food orders. If you already work in the food industry and want to increase your reach, Zomato will provide a return on investment over time.

Zomato Foundation: What is the Success Story Behind the Idea

Zomato, established in 2008, has quickly expanded with successful startups worldwide. Deepinder Goyal and Pankaj Chaddah, graduates of Delhi IIT, launched Zomato in 2008. In the history of Zomato, before November 2010, Zomato was known as “Foodiebay”. They noticed their coworkers looking through menus from several eateries to place an order. Zomato became Delhi’s top dining directory in just nine months and quickly expanded to other cities due to its early success. By 2012, Zomato began its global journey, launching in countries like the UK, South Africa, Sri Lanka, New Zealand, and Brazil. To avoid any legal issues with its original name, ‘Foodiebay,’ which sounded similar to ‘eBay,’ the company rebranded in 2010 and officially became ‘Zomato.’ Zomato expanded its range of offerings in 2015 when it entered the food supply industry and launched Gold, an Indian membership service that gives users free food and drink. Zomato also introduced HyperPure, an initiative that works directly with farmers to improve the quality of food products delivered to restaurants, guaranteeing sustainability and freshness. Now, it operates in 24 nations and has more than a million restaurants. Zomato has a group of food soldiers visit each restaurant to ensure that their data is secured. You can write stories based on their eating experiences, express their thoughts, and offer reviews. Zomato is a user-friendly app to purchase food online and become more social. Zomato makes ordering food on your mobile device simple by delivering it to your location.

What is the Zomato Business & Revenue Model?

Zomato’s strategy is all about providing users with a seamless & all-in-one platform. From browsing restaurants, checking menus, and reading reviews to making reservations, it’s got everything covered. Zomato generates revenue through ads and restaurant subscription fees, positioning itself as one of the top online food ordering platforms across 24 countries. Restaurant owners join Zomato to boost their online visibility and reach more customers. Zomato’s business model clearly outlines how it operates behind the scenes, driving success for both the platform and its partners.

Zomato Business Model

Customer Segments

• Users: An online platform that helps users find nearby restaurants, perfect for those who want food delivered right to their door.
• Local Restaurants: If restaurant owners want to market their establishment and draw in the interest of their target demographic, they must utilize the Zomato platform.
• Providers of Delivery: They can create a respectable income stream by offering full- or part-time services.

Value Proposition

Zomato is a feature-rich online food ordering platform that lets users order from various eateries. If you are new to the food market and want a strong online presence, Zomato can also help promote your food business. Due to this, Zomato is built on the QAAA model, which states that it will provide its partners and customers with Quality, Accessibility, Affordability, and Variety. The value propositions that set Zomato apart and made it worthy of praise are as follows:

Improving Food Quality

Zomato is fully committed to providing a fair platform for restaurants. It helps them maintain high standards through Hyperpure, an initiative that delivers fresh, clean, and top-quality ingredients to partner restaurants. The Food Hygiene rating, a mark of quality, is highly valued by Zomato’s restaurant partners.

Enhancing Customer Accessibility

Zomato delivery has grown since its launch and is now available in an increasing number of cities. Their service offerings are expanding rapidly. They now cater to businesses, take reservations for tables, and feed India.

Delivering Affordable Solutions

Zomato Gold’s popularity proves Zomato’s effectiveness in offering a wide range of interesting options. Zomato never gives up and does everything it can to provide the greatest. They maintain affordability without sacrificing their financial success.

Aid in the Assortment

Zomato is committed to helping its users discover new and exciting experiences beyond national boundaries. They assist their clients in making an informed decision by providing the greatest information in the most readable way possible.

Key Partners

Zomato started as just a listing site and a directory of restaurants. This allowed restaurants that signed up for the platform to get paid for advertising. Zomato has started charging restaurant commissions for its prominent placement in the feed following the rollout of food delivery and restaurant reservations. Restaurants can boost visibility and conversions among Zomato users by paying to advertise special offers or events under their main banner. Key partners of Zomato include the following:

• Restaurant Owners
• Retail Grocery Stores
• Delivery Providers

Key Activities

Zomato charges restaurants a commission for each order through its food delivery service. This commission is shared between Zomato and the delivery partner, while users also pay a delivery fee. Depending on whether Zomato completes the delivery or the restaurant uses its riders, restaurant commissions vary. This is said to only account for a small percentage of the company’s overall revenue due to strong competition and the need for substantial discounts. Thus, additional crucial tasks consist of:

• Relationships with eateries and shops.
• Choosing and supervising delivery contractors.
• Collecting user information to enable seamless payments & delivery.

Zomato’s Revenue Model

Zomato has expanded its global presence in the food industry since it first began. Its revenue model explains how Zomato makes money. To help you understand Zomato’s high profit, consider its business model and diversity. Here are some sources of its revenue model:

Restaurant Advertising

In the beginning, Zomato was only a restaurant ranking and locator. Currently, though, Zomato collaborates with businesses to advertise their offerings. The commissions for restaurants are charged by Zomato and displayed prominently on the feed. More than 70% of its revenue comes from this source. Advertisements enable restaurant owners to post their banners on their websites to boost their visibility. In order to improve user visibility on Zomato, restaurants also pay the platform to advertise their events or their general banner. Advertising from the platform’s retailers brings in money in this way.

Zomato Subscription

Zomato Gold provided a consistent restaurant income flow through memberships and user fees. Restaurants pay a monthly charge to receive the bouquet of Zomato bids, while consumers pay subscription fees for using the exclusive Zomato Gold loyalty scheme. Additionally, restaurants must pay a monthly charge for a number of services like live tracking and packaging bearing the Zomato brand, which is difficult to tamper with.

Zomato Food Delivery Services

Nearly 75 % of Zomato’s earnings for the 2019 financial year were derived from commissions on food deliveries. Restaurants must employ Zomato’s affiliated riders to deliver their meals; there is currently no other option. Zomato has created its ecosystem for online meal ordering. Furthermore, Zomato produced $155 million in income in 2020—roughly four times as much as the previous year.

Zomato Kitchen

Zomato supports the idea of cloud kitchens by providing infrastructure services to select restaurant partners. They help food entrepreneurs start restaurants in good locations with an investment of Rs 35 Lakhs, offering returns of 2 to 4 Lakhs to investors. Zomato has 180 affiliate kitchens and is always looking for passionate entrepreneurs to open more Zomato kitchens.

Live Events

Zomato has entered the live events space, organizing food festivals and cooking workshops. These events give Zomato a great way to connect with its users and promote its brand. Another such event is Zomaland, one of India’s largest food carnivals. Here, one may discover innovative and delicious cuisine, have a good time, and view amazing artwork. You must use the Zomato app or PayTm Insider to make a minimal payment to access this event.

Final Words

In conclusion, Zomato is a user-friendly platform offering a variety of services. It is committed to offering a secure and trustworthy service to its users through its safety precautions and customer assistance. You were able to create the largest food-ordering network as Zomato’s effective business and revenue model. Zomato has been dominating this sector for many years and is still expanding. If you are looking for a mobile app development company in the USA to develop an application like Zomato, we are always available to assist you.

Frequently Asked Questions

Q. What are Zomato’s Main Strategies?

Ans: Zomato uses various marketing strategies. These include SEO, social media, paid ads, email marketing, and visual ads.

Q. Why is Zomato Better Than Swiggy?

Ans: Zomato and Swiggy are online food delivery platforms offering an exceptional and similar range of services. They allow us to order food online from a wide selection of restaurants and have it delivered to our doorstep. Zomato is in a superior position in terms of marketing, innovation, market share, and acquisition. It now offers restaurant discovery, reviews, online ordering, table reservations, and grocery delivery. On the other hand, Swiggy has primarily focused on food delivery services.

Q. What Is The Concept of Zomato?

Ans: Zomato is a food tech company. It helps people find restaurants, delivers food, and takes online orders. This platform has info on restaurants. It helps you decide where to eat. Zomato offers online ordering, table reservations, and food delivery via its partners. Zomato has also expanded into other areas, such as online payments and event management.

Q. Why is Zomato’s Marketing So Good?

Ans: Zomato’s marketing is considered good for several reasons. The company has a strong brand and a good reputation. It built them by consistently delivering high-quality services and experiences to its customers. This has resulted in a loyal customer base that actively promotes the brand through word-of-mouth marketing. Zomato has also used social media to connect with its target audience. It creates engaging content that resonates with them. The company has a strong presence on social media, like Facebook, Twitter, and Instagram. It regularly shares updates about its services, promotions, and events.