Zomato Business Model – How Zomato Became India’s Best Online Food Delivery Service – 13 Years

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Zomato Business Model changed the concept of foodies people in terms of ease of access, it removed the waiting period consumed by people outside of the restaurants to come to their turn.

I repeat none of the businesses is great, the legendary business idea makes the business great, similarly, zomato, which has become a brand now, made the online food delivery business great.

Zomato is one of the largest online food delivery companies today, but do you know that zomato was not started as a food delivery business, it was started as the restaurant menu cards online provider and then the founders added a supplement to the online food delivery business model.

As the base of business, Zomato focuses on ease of customers, and they always keep the approach to provide the values to the customer which they would never get from anywhere else.

The center focus of zomato is to become a bridge between the restaurants and the customers and become a missing key to accomplish the chain.

What is Zomato?

I assume I don’t need to introduce Zomato, hence it is the online food delivery service provider where it does not have its own restaurant, despite it delivering the food parcels to the people, isn’t it amazing?

The delivery partners of zomato collect the ordered food parcel from the restaurants and deliver them to the customer who had ordered it to the restaurant.

Before 10 years, if you would make a proposal to somebody, he would definitely decline, but today, if you are ready to invest in establishing the online food delivery business, many people will be ready to manage.

Because Zomato has proved that every business is great until you do not apply the great idea to execute it.

Zomato is a rebranded name, the original name of Zomat was Foodiebay which was started by two guys Deepinder Goyal and Pankaj Chaddah in 2008.

Zomato is not acquiring only the Indian Market, it is consuming the International Market as well by providing online food delivery services in 10,000 cities in 25 countries.

It covers the international market with countries India, USA, New Zealand, Brazil, Australia, Singapore, and Middle East Qatar.

Founders of Zomato And History Of Founding Zomato

Founders of Zomato Business Model

Two guys Deepinder Goyal and Pankaj Chaddah started the online food delivery service with the idea of collecting the food parcels from the restaurants and delivering them to the customer.

They started the online food delivery company with the name of “Foodiebay” but the last suffix was getting matched with another brand name “eBay” and they rebranded their company with Zomato in 2012.

Both founders of Zomato passed out of IIT, and the idea of establishing the business of online food delivery was clicked while having the meal in a restaurant.

Whenever they went for lunch, dinner, or treats, they were demanding for the menu care consistently to order the item.

With the occurrence of this incident often, Dependar Goyal clicked one idea to convert the paper menu card into a digital card to make it easily accessible.

They started to execute this business model, and within just 9 months, they grew very fast and started to expand the business apart from Delhi, and in a few months, the business got started to be spread all over India.

Zomato initiated to enhance its business model in the out countries like Qatar, South Africa, Brazil, New Zealand, the UK in 2012.

Till 2015, Zomato was availing the menu cards for the customer of restaurants, but they started the online food delivery business in 2015.

What is The Zomato Business Model?

Business Model of Zomato

Zomato was passing the menu cards of different restaurants to the people who wanted to see the menu of their desired restaurants in the beginning time module.

They jumped one step ahead in 2015 and started to deliver the food to the customers.

The business model of zomato is quite different from the other business models, and it’s really quite interesting.

Zomato launched its own mobile application for 3 attributes, one is for the customers, the second is for the restaurant owners and the third is for zomato delivery partners(i.e. the person who delivers the food from the restaurant to the customer).

Zomato has created a chain by collecting the different attributes named customers, food delivery object (itself), and the food supplier.

There was a big gap between the customer and food supplier, it was quite difficult to come with each other without a proper navigator.

Zomato became that navigator who navigated both for both aspects and grew the great business model.

Providing The Ease of Order to The People

Zomato is working on the easy mode of ordering people, i.e. it provides the ease of food to the customers at their doorstep.

By application of Zomato, people can access the food items, menu cards, and offers offered from nearby restaurants, hotels, and food supplying centers.

They can order the desired food from their desired restaurants at the rate displayed in the mobile application.

Zomato is providing ease of payment as well with the option of prepay and postpay, by the prepay service, customers can pay the money online by using an online payment application, and by the post-pay service, customers can pay the bill while taking the delivery of food parcels.

Zomato is not charging extra for the delivery, hence it is paying the amount to the delivery partner for performing the food delivery to the customers.

Delivery Partner’s Role

The delivery partners who collect the food parcels from the restaurants and deliver them to the customer’s doorstep are the bridge between customers and restaurants.

As long as the customers order any food to any restaurant, it is received by the zomato and it notifies the delivery partner about the order.

Delivery partner has the option to accept or decline the order, if he accepts, he gets all the details about the order.

  • Customer’s Detail – Name, Mobile Number, and Location
  • Restaurant Name – Name, Contact Number, and Location
  • Order Items with Rate
  • Route of Restaurant’s Address
  • Route of Customer’s Address
  • Estimated time to reach at both places
  • Delivery payable amount according to the distance

After accepting the order, he reaches the restaurants, where he might have to wait for the food parcel, or he might not have to.

If he has to wait, he is not supposed to wait for endless time as the waiting time is already mentioned in the details of the order.

If the food preparation time exceeds the waiting time mentioned in the order details, a delivery partner can report to the zomato authority, and in some cases, an order can be canceled as well by zomato.

As long as food gets ready within the time limit, the delivery partner checks the order received and delivers it to the customer.

After delivering the parcel to the customer, he has to mark the order as delivered at the location of delivery, he can not do so by moving far from that location.

Restaurants or Food Supplier Responsibility

Same as the customers and food delivery partners, the food suppliers also have the zomato mobile application in which they can see the orders placed by the customers for their restaurants.

He also has the access to accept or decline the order received by the customer, if he accepts the order, he has to prepare and pack the food and hand it over to the delivery partner who is supposed to deliver the customer.

The food supplier has no concern or direct connection with the customer, he can not ask for payment to customers, zomato is responsible for all aspects in terms of service apart from the taste and quality of food.

In rewards of service, zomato charges the food supplier some percentage of the total selling price of each food, i.e. around 18%, which is not static, changes with time.

How Can Food Suppliers Register With Zomato?

The Process of registering the food business is quite simple, where he has to visit the zomato site, and needs to submit some basic details.

  • Restaurant Name
  • City
  • Credentials
  • Contact Number
  • Opening Status
  • Outlet Owner’s Details

Then he will be suggested the process to register with zomato, and application submission, the executive will come to the restaurant for verification.

A restaurant owner needs to keep some legal documents with him during the verification process.

  • Shop License
  • FSSAI License
  • GST Number
  • PAN Details

If any food supplier passes any false data to zomato, his application gets declined because zomato performs the cross-checking process before approving.

Zomato Revenue Model

Like Uber is facilitating millions of taxis over the world to people, but it does not have its own even a single taxi, similarly, zomato is delivering food to thousands of people over a day, it does not have its own single restaurant or food supplying center.

Zomato is not involved in just the online food delivery food business, it is also running the advertising business.

As Google is the search engine where a user can find any information, Zomato is the search engine where a person can find any information about any restaurant as items, prices, services, offers, location, menu card, etc…

It advertises for the restaurants and generates revenue and the second business model of zomato is online food delivery where it delivers the food to the customer collecting from the food supplier.

Subscription Data

Analytical data works as the Nectar for every business, and zomato holds that Nectar which it sells to restaurants and generates revenue.

As a result of constantly interacting with the people, zomato can collect all the analytical data of people’s behavior, like what they want to eat, where they want to eat, what is the choice of people in food, which food is more demandable in which area, how many customers are looking the food in low price and all other data.

Zomato holds a huge database of these matters, and at the second end, restaurant owners also are eager to have it, as a result, both are happy, zomato is by selling and restaurants are by buying.

Total Revenue Sources of Zomato

Apart from these three sources of revenue, there are three more revenue sources of zomato from where it produces a noticeable revenue.

  • Live Events
  • White Label Access
  • Zomato Kitchens

These all are the various ways and sources of revenue of zomato from where it comes, hence, the major origins of revenue are food delivery business and subscription data.

Many people are aware of the other business models of zomato from where they are generating the revenue.

Benefits of All – Zomato, Customers, and Food Suppliers

Zomato’s business model benefits all the attributes connected by the chain, zomato itself, customers, and the restaurant owners.

Customers do not have to move a single step out of their home in the covid duration, at the other end it saves their fuel, energy, time and they can also avoid the unwanted waiting activity.

Food suppliers are the happiest attributes with the business model of zomato because, before this business model, they were able to target only the nearby and walk-in customers.

After invoking the zomato business model, they are able to cover the outsider customer apart from their nearby territory as well.

Competitors of Zomato

When you start a new business model, you have competitors, but no one competes with you. As long as your business model grows up, the number of competitors increases, and the rise of new competitors occurs day by day.

Similarly, when zomato was a new business model, no one was taking them seriously, but with the success of the zomato business model, the rise of competitors got started.

There are many broad and domestic competitors of Zomato, but Swiggy and FoodPanda are the major competitors of Zomato.

Final Words

Zomato Business is not a new business but it developed a new business model in the direction of 0 to 1 direction, instead of 1 to N direction.

If we look around us, everyone can find and execute one new business model according to the problem of people.

Saturation exists for the business and customers only, business ideas and business models are beyond saturation.