Everything you need to know about Zomato Business Model and Revenue Sources | How does Zomato Make Money?

Zomato is an online-based search, discovery, and food delivery service provider for Indian restaurants. This food tech unicorn was created in 2008 by Deepinder Goyal and Pankaj Chaddah. Over the years, Zomato expanded itself into several overseas markets. It has reached a high pedestal and is well known across India.

It is currently functional and serves over 10,000 cities in 25 countries around the globe, including some of the world’s fastest developing countries like the United States, Australia, India, Brazil, Singapore, New Zealand, and Qatar, amongst the countries of the Middle East. It is one of the most used food-tech applications around the globe. In this article, we will be explaining how does the Food Aggregator Zomato Make Money, its Business Model, etc.

• What is Zomato?
• So How Does the Zomato application actually Work?
• Zomato Business Model
• Key Activities of Zomato
• How Does the Zomato App Make Money?

What is Zomato?

Zomato focuses on services like online meal ordering, loyalty programs, restaurant reservations, and consulting services. Zomato also works as a food-search engine that operates on a broader variety of restaurants and food, somewhat like the Google search engine.

The company has now become one of the world’s largest food aggregators, growing all the way up from being a household project. Along with connecting people in every context and aspect of food, it also collaborates with thousands of restaurants to try and make way for a sustainable ecosystem. The company has taken the food tech industry by storm and succeeded in sustaining its position being a top player in the market with the help of its unique as well as sustainable business and revenue model.

Along the years of its service, Zomato has built itself and gained confidence among the people, all thanks to the fantastic management of factors like affordability, easy accessibility, and a wide range. All these are the key factors that help gain the trust and confidence of the audience and take the business up a notch. Zomato also works hard to find innovative ways of serving its customers.

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So How Does the Zomato application actually Work?

Zomato is easily one of India’s fastest-growing and thriving startups, thanks to its remarkable growth since it started back in 2008. The secret ingredient behind this successful venture is a personal desire to be known by many of the world’s most prominent business owners and entrepreneurs. However, despite all the attractive discounts it showers on its users, its enormous profits are a mystery to all.

The application’s primary function is to suggest to its users the lovely and thriving restaurants nearby, receive orders and provide services like delivery. The platform is designed so that the user can read other users’ reviews and look at the ratings of the restaurant before they decide to place orders at the selected restaurant.

This often helps its users try new restaurants and cuisines in the comfort of their own houses. These features certainly can be why many startup owners are now interested in building apps like Zomato. It offers its users the comfort they seek, and it also helps businessmen take their restaurants to a new level. One of the most essential features of this app is that it is straightforward to operate.

Zomato Business Model

The secret behind Zomato’s huge success lies behind its robust business model. Zomato is an app whose business model covers food delivery services, user reviews, information provision, and Partner restaurant menus. Zomato is the pioneer as far as online food applications are considered. Listed down below are some of the critical elements that are part of the Zomato Business Model:

The Customer Segment

This segment consists of three main parts and they are as follows

Restaurants in the neighborhood:

The Zomato app functions in a way where it allows its restaurants to get viewed by their select target audience. E.g. Making restaurants that serve home-cooked meals visible as suggested options to the users who generally opt for healthier meal options.

Users: Zomato works towards helping their users find immediate and efficient choices of restaurants for any specific cuisine they desire in any vicinity of their choice. It is a one-stop destination for home delivery enthusiasts and users who would like to explore the various food selections available by dining in.

Content contributors: Zomato also has a team of content distributors that review food and places actively to suggest to their users to try out what’s new in town. They provide this information to their users in text and graphic form.

Zomato Provisions

Zomato acts like the link between its users and the restaurants it’s partnered up with. It has also created a particular pricing model for its delivery services. In addition, the Zomato Gold and Piggyback have helped improve the quality of Zomato’s services.

Zomato’s Alliances

PayPal has helped enhance the Zomato Business Model in its recent partnerships with some renowned leading names like Uber taxi and Visa, to name a few. Its partners have helped the company in hiring, establishing, work placements, market research, operational handling, political and legal matters, accounting, etc.

Value Propositions

Zomato is based on a QAAA model which promises and offers its users and partners accessibility, affordability, quality, and range. The functioning of this food tech giant is loved tremendously, so now let’s view the values that help make Zomato admirable and unique:

Improvement of food quality: Zomato is one such company that is entirely involved in maintaining a neutral platform regarding its relations with the partner restaurant and its users to ensure quality meals. Zomato via Hyper pure helps the food facilities maintain high cleanliness standards. This initiative provides the food facilities with fresh, clean, high-quality ingredients as the quality sign most known amongst their partner restaurants is ‘the most desired food hygiene “rating. This rating helps attract the most audience, especially during the ongoing pandemic.

Improvement of customer accessibility: Since the very beginning, Zomato’s supplies have expanded its reach all over the globe, and at the rate at which they are growing, they have now expanded their services. For example, they have started offering Table reservations, catering to businesses, and feeding India.

Ensuring the affordability factor: The efficiency of Zomato making a wide range of exciting choices is best seen in the success of Zomato Gold. One of the reasons behind their high popularity is that they ate constantly striving to deliver their users the best of the best and leave no stone unturned while doing so. Another such ingredient in their pot of success is that they guarantee affordability without compromising their profit.

Support in The Range: One of Zomato’s key goals is to provide users with new tastes and experiences that transcend geographical borders, all in uncovering bands. They work towards providing their users with top-notch information in the most readable and straightforward language, which can help them make informed choices.

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Key Activities of Zomato

Management of its Network: Zomato acts as the link between its partner restaurants and users, management of this circuit of the network is one of its key activities.

Management of advertising: The Zomato app has created a user database reservoir that it uses while advertising to its audience. Advertising for restaurants is also another way through which the company generates good income.

Improvement in Customer Experience: Zomato leaves no stone unturned for its users, so it works hard toward further improving customer experience. They carry out a variety of activities and make sure their features align with the emerging trends of society.

Maintaining its Brand Image: Zomato aims to ensure an authentic flow of information as the provider of all information regarding the food, which will help its users answer the two main questions that are always set to confuse most individuals: where to eat and what to eat.

Subscription and Online food delivery: Zomato first launched its food discovery solutions, but now it has expanded and flourished in the food supply segment of the industry as well. It has also introduced subscription features for frequent users, which can avail the exciting offers and discounts.

The Partner Consultant Feature: As mentioned earlier, the company has a vast user database reservoir, and it uses different tools to discover important information. This is food for customer service to its partner restaurants.

The Zomato Whitelabel: Zomato also helps restaurants by providing them with a platform. It is known as plug and play allows the restaurants to develop robust apps of their own

How Does the Zomato App Make Money?

Here is the list of sources from which Zomato gets its revenue. We have explained each one of them specifically with clear information. They are as follows

Advertising

Zomato, at its beginning, was only an online directory of restaurants, but over time they now have partnered up with restaurants to promote their services and products. It charges the restaurants commissions, which are prominently visible on the feed.

The restaurants pay the app to promote their events or promote their general banner, which helps them get noticed by the users of Zomato due to better visibility. This is how the company generates revenue from retailers of the platform.

Food Delivery

Zomato charges a commission to its partnered restaurants based on the orders they get through this food supply company, after which it also receives a cut for every delivery that a user requests. The delivery commission from every restaurant is subsequently divided between the business and the supplier.

The commissions received by the restaurant differ on factors. If it was delivered by Zomato or by its own drivers as well. However, these commissions add up and contribute to a small portion of the company’s overall revenue. It is because of the significant competition and need for discounts, etc.

The Zomato Gold and other Subscription Services

Zomato Gold has paved the way and set up a steady stream of revenue. It is generated by the users and subscriptions for restaurants. The users pay a monthly fee for the bouquet of Zomato bids and the subscription fees. It is required to access the exclusive Zomato Gold loyalty program.

Other than the revenue generated by Zomato Gold. The restaurants also pay Zomato for different services like tamper-resistant packaging, live tracking, and many more such features.

Booking and Ticketing

Back in 2018, Zomato entered the branded live events market by introducing Zealand.

At this event, Zomato charged an entrance fee. After which the people attending the event could witness live concerts by top-tier artists and events like standup comedy along with food. It was hosted in Delhi, Pune, and Bengaluru with more than 100,000 participants.

The White Label Access

Zomato offers its partnered restaurants special services. It allows them to create their own custom-made food delivery app, which is known as the Zomato Whitelabel. It also works for various consultancy services with cloud kitchens and restaurants.

It focuses on working with select restaurant operators to find expansion sites at fixed minimum budgets while increasing user options. It helps the partnered restaurants get their operational allowance and necessary licenses.

The Zomato Kitchens

Zomato works hand in hand with multiple businesses to help build and then operate Zomato Kitchens. It is produced under different labels to offer spectacular kitchen infrastructure services for select restaurant operators.

It has supported many entrepreneurs by financing them with more than INR 35 lakh for restaurants set in suitable locations. Zomato has further claimed that it has provided investors with the rate of INR 2lakh to INR 4 lakh per month. It already has more than 180 kitchens up and running smoothly.

Conclusion

The Zomato revenue model and its workflow are ideal for new minds looking for early access to the industry. It saves time for users and has made ordering online and home delivery comfortable throughout the entire process. As a result, Zomato has helped introduce a new chapter in terms of online businesses. Hopefully, this article helped clear your queries about how the Zomato app makes its Money and its revenue model functions.