How Does Zomato Make Money? The Zomato Business Model In A Nutshell

Zomato is a multinational restaurant aggregator and food delivery company headquartered in Gurugram, India, founded in 2008 by Deepinder Goyal, Gaurav Gupta, and Pankaj Chaddah as Foodiebay. The trio were passionate foodies and had an idea to provide digital access to thousands of restaurant menus across India. Depending on the country where it operates Zomato makes money in various ways: via restaurant listings and advertising, delivery fees, loyalty programs, special event ticket sales, and consulting services.

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Origin Story

Zomato is a multinational restaurant aggregator and food delivery company headquartered in Gurugram, India.

It was founded in 2008 by Deepinder Goyal, Gaurav Gupta, and Pankaj Chaddah as Foodiebay.

The trio were passionate foodies and had an idea to provide digital access to thousands of restaurant menus across India.

In the early days of the company, the founders would drive around Delhi to visit each restaurant, scan the menu, and put it online.

After a name change in 2010, the service quickly spread to major Indian cities including Chennai, Pune, Kolkata, Mumbai, and Bangalore.

In 2014, international expansion began with a presence established in Qatar, Sri Lanka, South Africa, and the UK to name a few.

Five years later, Zomato acquired Seattle-based Urbanspoon – giving it first access to the United States and Australian markets.

The platform now offers restaurant menus and user review information for selected partners in 10,000 cities across 24 countries.

Aside from delivery services, Zomato also offers live events, loyalty programs, and restaurant reservations.

Value Propositions for Zomato:

Comprehensive Restaurant Access: Zomato offers users digital access to a vast array of restaurant menus, providing a one-stop platform for exploring dining options in various cities and countries.
User Reviews and Ratings: Zomato provides user-generated reviews and ratings for restaurants, helping customers make informed dining decisions based on the experiences of others.
Food Delivery Convenience: Through its food delivery service, Zomato offers users the convenience of ordering food from a wide range of restaurants and having it delivered to their doorstep.
Exclusive Discounts: Zomato Pro, the loyalty program, offers members access to exclusive discounts at a variety of restaurants, enhancing the value of dining out or ordering in.
Event Access: Zomato sells tickets to special events and festivals, giving users access to unique dining experiences and entertainment options.
Restaurant Advertising: For restaurants, Zomato provides advertising and promotional opportunities, allowing them to increase their visibility, promote special events, and attract more customers.
Consulting Services: Zomato’s consulting services leverage its data to provide valuable insights to restaurant owners, helping them make informed decisions about location and competition.

Zomato revenue generation

Zomato has multiple, established revenue channels. The exact revenue is dependent on country-specific fees and its unique arrangements between restaurants and delivery partners.

Let’s take a look at each below.

Restaurant listings and advertising

Advertising was one of the first sources of revenue for Zomato and remains to be a significant contributor today. The company charges for sponsored listings, allowing restaurants to increase their visibility. Zomato also offers local advertising for restaurants in much the same way as Yelp and Google do.

Restaurants can also pay to have their special events or offers promoted on the platform.

Delivery fees

Zomato also offers food delivery. It collects a delivery fee from the user and also earns a commission from the restaurant processing the order. This commission is then split between the company and the courier.

Ultimately, delivery commissions vary according to whether Zomato is fulfilling the order itself or using a partner.

Loyalty programs

Zomato Pro is an all-encompassing membership program for users. The program gives restaurant lovers access to exclusive discounts at a variety of establishments, from fast food to fine dining.

Zomato Pro members also can jump the delivery queue at selected restaurants, reducing delivery wait times by 15-20%.

Access to Zomato Pro is maintained by a monthly subscription fee, again dependent on geographic location. In most cases, users can pay for 6 months or a full year in advance.

Special event ticket sales

Zomato also sells tickets to festivals and one-off events such as Valentine’s Day and New Year’s Eve.

These tickets are a cleverly disguised commission that Zomato collects from restaurant owners for sending patrons their way.

Each event is promoted on the Zomato platform, earning the company another source of advertising revenue.

Consulting services

With access to extensive amounts of restaurant and consumer behavior data, Zomato also offers a consulting service.

This includes advice regarding the demand level for new eateries in a specific area and pre-existing competition levels.

Revenue Model:

Commission on Orders: Zomato generates revenue by charging a commission on orders placed through its food delivery platform. The platform receives a percentage of the order value as a commission fee from its restaurant partners for facilitating food delivery services, which serves as a primary source of revenue for the company.
Advertising and Promotions: Zomato offers advertising and promotional services to restaurants and food businesses looking to increase their visibility and reach on the platform. Restaurants can pay to promote their listings, feature special offers, and sponsor content to attract more customers and drive sales, generating additional revenue for Zomato.
Subscription Services: Zomato offers subscription-based services, such as Zomato Pro, to users who are willing to pay for premium features and benefits. Zomato Pro subscribers gain access to exclusive discounts, priority delivery, and other perks at partner restaurants, generating subscription revenue for the platform.
Cloud Kitchen Operations: Zomato operates cloud kitchens, also known as Zomato Kitchens, where it prepares and delivers food under its own brand name. By operating cloud kitchens, Zomato can capture a larger share of the food delivery market and generate revenue from the sale of its own food products.

Distribution Channels for Zomato:

Mobile Apps: Zomato offers mobile applications for both iOS and Android devices, providing users with easy access to restaurant listings, reviews, food delivery, and event ticketing services.
Website: Zomato’s website serves as a central platform where users can explore restaurant listings, read reviews, place food orders, and purchase event tickets.
Food Delivery Couriers: Zomato partners with delivery couriers who physically deliver food orders from restaurants to customers, facilitating the food delivery service.
Restaurant Partnerships: Zomato collaborates with restaurants to create and maintain listings, manage orders, and offer promotional opportunities such as advertising and event promotion.
Zomato Pro Membership: Users subscribe to Zomato Pro through the platform, gaining access to exclusive discounts and benefits.
Event Promotion: Zomato promotes special events and festivals on its platform, attracting users to purchase tickets for these events.
Consulting Services: Zomato’s consulting services are offered directly to restaurant owners and businesses, providing them with valuable insights and recommendations.
Geographic Expansion: Zomato expands its services to new cities and countries, establishing a broader geographic presence and reaching more users and restaurant partners.

Key takeaways

Zomato is a multinational restaurant aggregator and food delivery service headquartered in India. It was created by three founders who had a passionate desire to provide better access to thousands of restaurant menus.
Zomato makes the majority of revenue through advertising – one of the original revenue streams on the platform. To some extent, it has been supplemented by a delivery service where Zomato collects a fee and a commission.
Zomato also charges for a loyalty program called Zomato Pro. Members can gain access to exclusive discounts and receive their food more quickly from participating restaurants. The company also offers a consultation service, helping new restaurants choose a suitable area to establish themselves.

Key Highlights:

Origin Story:
- Founded in 2008 as Foodiebay by Deepinder Goyal, Gaurav Gupta, and Pankaj Chaddah.
- Started as a platform to provide digital access to restaurant menus across India.
- Expanded rapidly to major Indian cities and internationally after a name change to Zomato in 2010.
- Acquired Urbanspoon in 2015, entering the US and Australian markets.
Value Propositions:
- Comprehensive Restaurant Access
- User Reviews and Ratings
- Food Delivery Convenience
- Exclusive Discounts
- Event Access
- Restaurant Advertising
- Consulting Services
Revenue Generation:
- Restaurant Listings and Advertising
- Delivery Fees
- Loyalty Programs
- Special Event Ticket Sales
- Consulting Services
Revenue Model:
- Commission on Orders
- Advertising and Promotions
- Subscription Services
- Cloud Kitchen Operations
Distribution Channels:
- Mobile Apps
- Website
- Food Delivery Couriers
- Restaurant Partnerships
- Zomato Pro Membership
- Event Promotion
- Consulting Services
- Geographic Expansion
Key Takeaways:
- Zomato originated as a platform to provide digital access to restaurant menus.
- Revenue streams include advertising, delivery fees, loyalty programs, event ticket sales, and consulting services.
- Zomato’s revenue model is diversified, including commissions, advertising, subscriptions, and cloud kitchen operations.
- Distribution channels encompass mobile apps, websites, partnerships, and geographic expansion.

Element	Description
Value Proposition	Zomato offers the following value propositions for its customers: – Food Discovery: Discovering a wide variety of restaurants and cuisines. – Convenience: Easy and convenient food ordering and delivery. – User Reviews and Ratings: Access to user-generated restaurant reviews and ratings. – Discounts and Offers: Attractive discounts and special offers. – Global Reach: Availability in multiple countries and cities. – Customization: Personalized food recommendations and search filters. – Delivery Tracking: Real-time tracking of food deliveries. – Payment Options: Multiple payment options for flexibility.
Core Products/Services	Core products and services provided by Zomato include: – Restaurant Listings: Listings of restaurants, cafes, and eateries. – Food Delivery: Food delivery services from partnered restaurants. – Table Reservations: Table booking and reservation services. – User Reviews and Ratings: User-generated restaurant reviews and ratings. – Zomato Gold: A premium subscription program with dining and delivery benefits. – Online Ordering: Online food ordering and delivery platform. – Advertising and Promotions: Advertising opportunities for restaurants. – FoodTech and Data Services: Food technology solutions and data analytics.
Customer Segments	Zomato targets various customer segments: – Food Enthusiasts: Individuals passionate about food exploration. – Busy Professionals: Professionals seeking convenient food solutions. – Restaurants and Eateries: Businesses looking to partner with Zomato. – Food Delivery Services: Individuals and families ordering food for delivery. – Travelers: Tourists and travelers exploring local cuisines. – Event Planners: Event organizers booking restaurants for gatherings. – Food Bloggers and Critics: Individuals in the food industry. – Global Audience: Users across multiple countries and cities.
Revenue Streams	Zomato generates revenue through several revenue streams: – Commission Fees: Earnings from commission fees charged to partner restaurants. – Delivery Charges: Charges for food delivery services. – Advertising and Promotions: Revenue from restaurant advertising and promotions. – Zomato Gold Subscription: Subscription fees from Zomato Gold members. – Online Payment Fees: Charges for online payment transactions. – Table Reservation Fees: Fees for table reservations. – Data Analytics Services: Earnings from food technology and data analytics services. – Premium Listings: Premium listing fees for restaurants.
Distribution Strategy	The distribution strategy for Zomato focuses on accessibility and global reach: – Mobile Apps and Website: Providing user-friendly mobile apps and a website for food discovery and ordering. – Restaurant Partnerships: Partnering with a wide network of restaurants and eateries. – Delivery Fleet: Employing a delivery fleet for efficient food delivery. – Online Payment Integration: Integrating multiple online payment options. – Global Expansion: Expanding services to multiple countries and cities. – Zomato Gold Program: Promoting the Zomato Gold premium subscription program. – User Engagement: Engaging with users through reviews, ratings, and recommendations. – Restaurant Promotions: Offering advertising and promotional opportunities to restaurants.