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Zomato Business Model

Kachi Ogbonna

Zomato Business Model: 6 Major Ways Zomato Makes Money

Zomato business model – a critical look of how Zomato works
Zomato is a popular Indian food delivery and restaurant discovery platform that operates in multiple countries around the world. Since its inception in 2008, the company has grown rapidly and is now a household name in the food industry. While Zomato started as a restaurant discovery platform, it has since evolved into a comprehensive food services platform that offers a range of services to both customers and restaurants.

The company has expanded globally and is now present in over 24 countries including USA, India, Australia, Brazil, New Zealand, Singapore and the United States and in Middle East Qatar. In this blog post, we’ll take a closer look at the Zomato business model and the various ways it makes money.

Zomato Business Model – How it Works

Zomato is an online food ordering and restaurant discovery platform that allows users to browse and order food from a wide variety of restaurants. It is actually a food search engine that works the same way as google search engine but specifically to explore a wide range of food and restaurants. Here is a step-by-step breakdown of how Zomato works:

  1. Search for Restaurants: Users can search for restaurants on Zomato’s platform based on their location, cuisine, rating, and price. Zomato provides a list of relevant restaurants along with their menu, photos, and reviews.
  2. Place an Order: Once a user has found a restaurant they would like to order from, they can place an order for delivery or pick-up directly through the Zomato app or website. Users can also specify any special requests or dietary requirements.
  3. Payment: Zomato allows users to pay for their food orders online using various payment methods such as credit/debit cards, net banking, and mobile wallets.
  4. Tracking: Users can track the status of their food orders in real-time through the Zomato app or website. They can see when their order has been accepted, prepared, and dispatched. And that continues until it gets to their doorsteps where that option is used.
  5. Delivery or Pick-up: Once the food order is ready, users can either pick it up from the restaurant or have it delivered to their doorstep by Zomato’s delivery partners.
  6. Review and Feedback: After the food has been delivered, users can rate and review their experience on the Zomato app or website. This feedback helps other users make informed decisions and also helps Zomato improve its services.

In summary, Zomato works by providing a platform for users to discover new restaurants, place food orders, and track the status of their orders. Zomato’s delivery partners ensure timely delivery of food. And users can then leave feedback to help improve the platform.

Zomato Business Model – The Value Proposition

Zomato business model presents a very strong value proposition that is centered around providing a convenient and seamless food ordering and restaurant discovery experience to its users. Here are some of the key value propositions of Zomato:

  1. Wide Variety of Restaurants: Zomato offers a vast selection of restaurants, cuisines, and price points for users to choose from, ensuring that there is something for everyone.
  2. Convenience: Zomato’s platform allows users to browse menus, place food orders, and track their delivery status all in one place, making the process quick and convenient.
  3. User Reviews and Ratings: Zomato’s user reviews and ratings provide valuable insights into the quality of the food and service at each restaurant, helping users make informed decisions.
  4. Discounts and Offers: Zomato Pro and Zomato Gold provide users with exclusive discounts and offers on food orders, making dining out more affordable.
  5. Data Insights: Zomato collects and analyzes data from user behavior on their platform to provide valuable insights to restaurants, helping them improve their offerings and services.
  6. Seamless Delivery: Zomato’s delivery partners ensure that food orders are delivered promptly and with care, ensuring a positive customer experience.

This value proposition helps to make Zomato business model superb and the platform a go-to platform for food ordering and restaurant discovery.

Zomato Business Model – What Makes it Unique

Zomato has an average monthly users of 41.5 million people. That is a good number by all measures and no brand gets that kind of number without getting something right. There are a few key factors that make Zomato unique compared to other food ordering and delivery platforms:

  1. Wide range of services: Zomato not only allows users to order food from restaurants, but it also provides information on restaurants, cafes, bars, and other food establishments. Users can browse menus, view photos, read reviews, and make reservations through the platform.
  2. Global presence: Zomato operates in about 24 countries, including India, the United States, Canada, and Australia, making it one of the largest food ordering and delivery platforms in the world.
  3. Focus on user engagement: Zomato encourages users to engage with the platform through features such as writing reviews, creating user-generated content

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Zomato Business Model – How it Makes Money

Zomato in itself does not sell food as one its services yet the revenue is perhaps more than that of any restaurant around. The Zomato business model is a subscription and advertising-based model.

But there are a few other ways the Zomato business model brings money:

1. Commission on food orders

One of the primary ways Zomato makes money is by charging a commission on every food order placed through its platform. The company typically charges restaurants a commission fee of around 20-25% on each order, which is paid out of the restaurant’s revenue. This revenue model is actually popular among food delivery platforms. And it allows Zomato to earn a substantial amount of money from its restaurant partners.

2. Advertising

Another major way the Zomato business model brings money is through advertising. The company allows restaurants to advertise on its platform to reach a wider audience. Restaurants can pay to have their ads displayed prominently on the Zomato app and website. Of course this is with the hope that it can help drive more traffic to their businesses. Zomato also allows restaurants to create sponsored listings, which appear at the top of search results and are marked with a “sponsored” tag. This is similar to what you see on Google search also.

3. Zomato Pro

Zomato Pro is another way Zomato business model brings revenue to the company. It is a subscription-based service that offers discounts and perks to customers who pay a monthly fee. Customers who sign up for Zomato Pro can enjoy discounts on food orders, early access to restaurant deals, and other exclusive benefits. Zomato Pro is a popular service among frequent users of the platform, and it helps the company earn recurring revenue from its customer base.

4. Online ordering system

In addition to its food delivery platform, Zomato business model also offers an online ordering system that restaurants can use to accept orders directly from their customers. This system is designed to help restaurants save money on commission fees. Nonetheless, Zomato still earns a fee for providing that service. Zomato charges a fee of around 7-8% on each order processed through its online ordering system.

5. Restaurant software

Zomato also offers a range of restaurant software solutions to help restaurants manage their operations more efficiently. These solutions include POS systems, inventory management software, and table reservation software. Restaurants that use Zomato’s software pay a monthly fee, which allows Zomato to earn recurring revenue from its restaurant partners.

6. Zomato Gold

Zomato Gold is a premium subscription based service offered by Zomato. It started in 2018 and is a paid service that allows customers with Gold memberships get complimentary food and drinks at the time of ordering from partner bars or restaurants.

However, the Gold service is only applicable to dine in orders and not available for deliveries. And this can only be used once at each partner restaurant in a day.

Zomato Business Model – The Wrap

In conclusion, Zomato business model provides several revenue streams that allow it to earn money from both its customers and restaurant partners. From commission on food orders and advertising to Zomato Pro, online ordering system, and restaurant software, the company has developed a comprehensive business model that has helped it become one of the leading food delivery and restaurant discovery platforms in the world.

Zomato business model

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