From family dinners to hungry bachelors, Zomato has found its way into becoming a household name. A company that started as a small-scale solution for viewing menus has now burgeoned into a multi-billion-dollar company. In this blog we explore the ups and downs in Zomato’s journey to becoming India’s first food-tech unicorn.

Beginning and aim

Founded by Deepinder Goyal and Pankaj Chaddah, alumni of IIT Delhi, Foodiebay, was born in 2008 as a solution for people who had to wait considerable amount of time merely to have a peek at restaurant menus. Over the next decade, Zomato saw exponential growth and changed the food business sector forever. Today, Zomato aims to be a one stop solution to all food needs of people.

Business Model

Zomato’s success can be attributed to its ever-evolving Business Model. It integrates different domains and allows customers to select restaurants, leave reviews and check listings and accessibility according to their personalized preferences
Customer segments entails three different components: Local restaurants, reviews, and users. Zomato has also created a well-designed valuation model for its food delivery services. Finally, new partnerships with several big names like Visa, Uber Taxi, and Paypal have improved the business model of Zomato.

Revenue streams

Zomato charges restaurants a fee to showcase the restaurant on its site. The higher the hierarchy and the number of times it shows on the top results the more money the restaurant pays Zomato.
Zomato charges a nominal fee to bring the food from the restaurant to your doorstep. The delivery fee is further distributed among the restaurant owner and Zomato. Zomato then in turn pays the delivery boy a certain fee as his/her salary.
Zomato Gold/ Zomato Pro serve as subscription-based membership to entice the customer to buy more at a considerable rate.

Marketing

The brand is aware of its audiences, likes, and dislikes. As a result, it supports material that people love to share, discuss, and reconsider. The intuitive social media team capitalizes on viral memes and trends to garner attention. Some of which include the smiling delivery guy. They also rely on Youtube and PPC ads.

Challenges

Zomato tried to branch out into international markets via acquiring restaurant services in various countries. A few of these services shut down pretty soon. In the next immediate year, Zomato faced massive losses and had to lay off a lot of employees. This led them to pull the plug on it’s operations in 9 countries.
The Zomato gold/Infinty controversy was probably the biggest hit Zomato took to its reputation. On the face of, it was a wonderful offer was both customers and restaurants. It could increase footfall at restaurants while providing superb deals for subscribers. But customers ordering the highly discounted meals along with the massive commissions taken by Zomato ate into the margins of the restaurants. This led to many restaurants ‘BOYCOTTING’ Zomato.
Zomato faces competition from other delivery services such as Swiggy and EatSure , as well as Delivery services of large chains such McDonalds and Dominos.

Conclusion

The Light at the End of the Tunnel is that Zomato is rapidly rising again, with them raising funds for expansion via IPO. Also with Deepinder Goyal at the helm of the company and his vast experience at getting the company out of major setbacks, Zomato is sure to continue on its upward trend.

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