Zomato?
If we knew better, we’d say it’s the food delivery app that you tap into every other week.
When hungry, just Zomato.
Zomato has ascended all food delivery platforms to become India’s one of the most used online food delivery apps.
Zomato’s red and white colors have now become synonymous with convenience and user satisfaction.
By enabling people to search for restaurants, check out their menus, read reviews, and even book a table—Zomato has truly transformed the landscape of online food delivery businesses.
But what exactly is Zomato, and what is the Zomato business model?
How does it work in practice? How does it generate revenue?
We’re here to answer all those questions and more in this blog.
So, let’s take a closer look at this food tech unicorn’s business model and ways you can emulate it to create your very own Zomato-clone food delivery app.
How does Zomato Work?
Deepinder Goyal and Pankaj Chaddha, two curious minds from IIT Delhi, were tired of the daily lunchroom dilemma.
Their colleagues would spend ages flipping through paper menus, trying to decide what to eat.
They saw an opportunity to simplify this tedious process and make food ordering a breeze.
In 2008, they launched Foodiebay, a platform that digitized restaurant menus.
This innovative idea quickly gained popularity, as it allowed users to easily browse menus, read reviews, and even order food online.
The duo realized they were onto something big and rebranded their venture as Zomato.
With Zomato, they aimed to revolutionize the way people discover and experience food.
By providing comprehensive information about restaurants, including menus, ratings, and user reviews, Zomato quickly became the go-to app for food lovers.
Here’s a brief rundown of how the Zomato app works:
Search and Discover: App users can search for restaurants based on location, cuisine, or specific dish.
Browse Menus: Once users have found a restaurant, they can view its menu, including dishes, prices, photos, reviews, and ratings.
Place an Order: Next up is placing the order for the selected food items. Users simply select the items they want, add them to the cart, and proceed to checkout.
Checkout: Users can pay for their order using various payment methods, like credit cards, debit cards, or digital wallets.
Delivery: Zomato’s delivery partners pick up orders from the restaurant and deliver it to the user’s doorstep.
Zomato Business Model
The reason why Zomato has been able to position itself as a comprehensive food-tech platform is because it has leveraged a multifaceted business model.
As a result of this, it can seamlessly cater to a diverse range of stakeholders and open multiple streams of revenue to profit from.
Hence, in this section, we’ll pay close attention to Zomato’s distinct yet cohesive business models:
Restaurant Aggregator Business Model
When all’s said and done, Zomato’s core business model is that of a restaurant aggregator. Zomato utilizes its platform to function as a robust online restaurant marketplace.
It does so by connecting hungry customers to a vast network of hyper-local restaurants. By partnering with restaurant vendors, Zomato helps them reach a wider target audience.
To boost credibility, Zomato is often seen collaborating with renowned restaurants to expand its network and offer diverse culinary experiences.
It also leverages advanced analytics to provide valuable insights into restaurant sales, empowering them to optimize their operations and marketing strategies.
By listing restaurant menus and services on the app, Zomato facilitates business between restaurants and customers and takes a commission cut in return.
Delivery as a Business Model
Zomato’s robust delivery network has emerged as a significant revenue driver and a key differentiator in the online food delivery market.
With a fleet of full-time and freelance delivery partners, Zomato has mastered timely and efficient food deliveries.
In addition to constantly expanding its delivery partner network, Zomato has also introduced transparency into its delivery operations for maximum user convenience.
Advanced technology, including GPS tracking and real-time order monitoring, allows customers to track their orders in real-time for that coveted peace of mind.
Zomato also has dedicated customer support to address any issues or concerns related to food delivery.
Subscription-based Business Model (Zomato Gold)
Zomato Gold is a subscription-based model that offers exclusive perks to all its members.
This strategy has been pivotal in driving up customer loyalty, increasing user engagement, and generating additional revenue for the company.
Key Benefits of Zomato Gold:
Discounts and Offers: Members enjoy significant discounts on food and beverages at partner restaurants.
Priority Delivery: Zomato Gold members receive priority in the delivery queue, ensuring faster delivery times.
Complimentary Items: Members often receive complimentary items or add-ons with their orders.
Exclusive Access: Zomato Gold members may have exclusive access to new restaurants, limited-time offers, and special events.
By providing tangible benefits to its members, Zomato Gold has proven to be a successful strategy to enhance customer satisfaction, drive revenue, and solidify Zomato’s position as a leading online food delivery platform.
Food Supply Chain Business Model(HyperPure)
Zomato’s HyperPure is a genius, strategic initiative aimed at controlling the food supply chain itself. By gaining control of the food supply chain, Zomato has a chance to monitor the quality and freshness of ingredients—to further enhance the food delivery experience.
Through HyperPure, Zomato can implement strict quality control measures, from sourcing to delivery. It can also streamline logistics, last-mile deliveries, and inventory management. This has a significant impact on overheads and paves the way for greater profitability.
Lastly, this business model ensures fresh, high-quality ingredients and contributes to a better dining or delivery experience for Zomato‘s customers.
Advertising and Marketing-driven Business Model
Zomato’s restaurant aggregator business model has turned the Zomato platform into a powerful marketing tool for hyper-local restaurants.
By partnering with Zomato, restaurant vendors have an opportunity to land more customers, increase online visibility, and boost overall sales.
In addition to having their restaurant listed on the Zomato app, restaurant vendors can also pay more to have their listing appear at the top of the search results. This further increases their chances of receiving more orders through the app.
Zomato also offers banner ads, targeted advertisements, and social media advertising to help restaurants reach their target demographic.
To further enhance their marketing efforts, restaurants partnered with Zomato can tap into data-driven insights and optimize their strategies to skyrocket sales.
It’s safe to say that Zomato’s multifaceted business model is doing wonders as today over 1.4 million users have subscribed to Zomato.
Further, Zomato actively collaborates with popular third-party service providers like Uber Taxi, Visa, and Pay to strengthen its business model.
The service providers have helped Zomato in multiple ways, including but not limited to everyday operations, food delivery, and financial workflows.
Zomato Revenue Model: How Does Zomato Make Money?
Zomato has generated multiple income sources as listed in detail in this section.
We are uncovering this to further solidify your understanding of how Zomato earns huge profits through its diverse business models:
Food Delivery Commissions
Commissions are a core revenue driver for Zomato. Zomato charges a percentage-based fee ranging from 20 to 25% from restaurant vendors for each order placed through its interface.
In some regions, the commission rate may vary from 5-7%.
These commissions accounted for approximately 75% of Zomato’s total revenue in the fiscal year 2019. It amounted to $155 million, four times their previous earnings.
Hence, it is truly the primary aspect of revenue generation for Zomato.
Zomato Subscription Services like Zomato Gold
Zomato Gold subscribers pay a monthly or annual fee for exclusive perks like money-off discounts, priority delivery, and complimentary items. The Zomato Gold memberships generate recurring revenue for the company as well as a steady stream of revenue.
Zomato Advertisements
Advertisements are one of the trusted and main sources of income for Zomato as it offers advertising opportunities to restaurants that want to maximize their profits and customer base.
It generates more than 70% of its revenue through this channel. It allows restaurant owners to put their banners on their sites to increase visibility.
In collaboration with certain restaurants, Zomato hosts multiple events such as Christmas Eve, New Year’s Eve, or any other event to boost sales.
Data Insights and Analytics
Zomato collects and analyzes user data to provide valuable insights to restaurants. Later, partner restaurants can use these insights to optimize their menus, pricing, and marketing strategies.
This generates a potential revenue stream for Zomato, as it may monetize data insights through prem0128ium data services or consulting offerings.
How Zomato Attracts Its Target Audience?
We are well aware of the fact that Zomato has millions of users placing food orders through its app.
But do you know how Zomato does it? Keep reading to find out.
Zomato’s success with its target audience can be attributed to its effective marketing strategies and user-centric approach.
Here’s a breakdown of how they attract and retain their ideal customers:
Extensive Restaurant Network
Zomato’s expansive network of restaurant partners provides customers with a diverse range of dining options.
By constantly onboarding new restaurants, Zomato ensures a wide variety of cuisines and dietary preferences are catered to.
Whether you’re craving vegetarian, vegan, non-vegetarian, or any other culinary delight, Zomato has something to offer for everyone. As a result, Zomato can seamlessly cater to a large target audience in the online food delivery market.
Attractive Discounts & Offers
Zomato regularly offers discounts, coupons, and promotional deals to entice new customers to encourage existing ones to order more through the app. It also collaborates with restaurants for exclusive deals and offers. By offering food delivery services at a lower price point, Zomato has been able to conquer a major chunk of the market.
Loyalty Programs
Zomato’s loyalty programs incentivize repeat business through points, discounts, and exclusive offers.
Zomato has launched loyalty programs, where Zomato users earn incentives in exchange for the points earned.
Such initiatives encourage customers to use Zomato frequently—resulting in repeat orders and brand loyalty.
Personalized User Recommendations
Zomato’s advanced algorithm analyzes user behavior to suggest personalized restaurant recommendations. Additionally, users can also customize their preferences, ensuring a more relevant experience.
This eventually improves the user experience and raises platform engagement. By recommending appropriate eateries and cuisines, Zomato has been able to retain customers with ease.
Social Media Presence
Zomato has a very powerful social media presence. It also regularly partners with food bloggers and influencers to boost brand visibility and attract new users.
They also take advantage of social platforms to share advertising efforts, highlight restaurant experiences, and interact with customers.
Zomato’s social media strategy is also responsible for bringing in new clients and keeping hold of current ones.
Seamless User Interface
Zomato’s user-facing app is very intuitive and is designed to make ordering simple. The app’s navigation is smooth and eliminates all friction when it comes to completing orders or payments. This intuitive design of the Zomato app is responsible for its popularity among users. There’s a reason why Zomato has become the go-to food delivery app today.
If you want to use these strategies to grow your own on-demand food delivery business, then you must connect with Deonde.
Deonde can help you create an app just like Zomato. With intuitive app design, promotional discounts, push notifications, and a user-activity database to tap into—you too will be able to attract and retain customers, just like Zomato.
How Zomato Disrupted the Food Delivery Industry
Zomato is well-liked for the way it works.
This is because it’s built on the QAAV model. This means that Zomato promises and delivers on the following parameters: Quality, Accessibility, Affordability, and Variety.
This QAAV model is the cornerstone of Zomato’s success in the food delivery business landscape. For your understanding, we’ve broken this down:
Improving Food Quality
Zomato’s HyperPure initiative is dedicated to ensuring the quality and freshness of ingredients supplied to partner restaurants.
By providing high-quality supplies, HyperPure helps maintain consistent food quality and hygiene standards.
Additionally, Zomato’s Food Hygiene Ratings System is a valuable tool for consumers to identify restaurants with high hygiene standards.
This transparency fosters trust and encourages customers to choose restaurants that prioritize food safety.
Increasing Customer Accessibility
Zomato continues to expand its delivery network, reaching more cities and neighborhoods. This increased accessibility allows customers to enjoy a wider range of cuisines and delivery options irrespective of their geographic locations.
Ensuring Affordability
Zomato offers a wide range of restaurants, catering to different budgets. From budget-friendly eateries to high-end fine dining, there’s something for everyone.
The Zomato Gold membership program is also an effort to make food delivery services more affordable to users. Gold membership provides exclusive discounts and benefits to members, making dining experiences more affordable.
Offering Variety
Zomato is committed to helping customers explore a world of flavors. By providing a comprehensive platform, Zomato allows users to discover new cuisines, restaurants, and unique dining experiences. Through detailed restaurant profiles, menus, and user reviews, Zomato empowers users to make informed choices and satisfy their cravings.
How to Build a Food Delivery App like Zomato?
Deonde offers a ready-made solution for entrepreneurs looking to build a food delivery app similar to Zomato.
This SaaS-based Zomato clone provides a comprehensive platform that can be customized to match specific on-demand food delivery business requirements.
Key Features Offered by Deonde’s Zomato Clone:
Intuitive User Interface: A user-friendly interface for both customers and delivery partners.
Real-time Tracking: Track orders in real-time to ensure timely deliveries.
Multiple Payment Options: Support for various payment methods to cater to diverse customer preferences.
Robust Admin Panel: Manage orders, delivery partners, and restaurant partners efficiently.
Advanced Analytics: Gain valuable insights into business performance.
Push Notifications: Keep users engaged with personalized notifications.
Menu Management: This allows restaurants to create and edit intuitive menus. Menus should be coupled with high-res original images. Updated, easy-to-read menus give restaurants a better edge over the competition.
Order and Delivery Management: This enables restaurant vendors to review historical orders, successful deliveries, and payments with Customer Order Management for Restaurants.
In a nutshell, here’s why you should get started with Deonde’s Zomato Clone app:
Faster Time-to-Market: Quickly launch your food delivery app without starting from scratch.
Cost-Effective Solution: Avoid the high costs of building an app from the ground up.
Scalability: Easily scale your business as your user base grows.
Customization: Tailor the app to your specific brand and business model.
Ongoing Support: Benefit from technical support and maintenance services.
By leveraging Deonde’s Zomato clone, entrepreneurs can enter the competitive food delivery market and provide a seamless user experience for half the cost and effort.
Conclusion
There is no denying the fact that Zomato has successfully established itself as a leading player in the on-demand food delivery industry by offering a comprehensive platform that caters to diverse customer needs.
Through its innovative features, strong brand presence, and strategic partnerships, Zomato has revolutionized the way people discover, order, and experience food.
As the company continues to develop and adapt to changing consumer preferences, it is poised to maintain its dominance in the market and shape the future of the food industry.
Now, with Deonde’s Zomato clone, you too can build your on-demand food delivery app in a week and disrupt the online food delivery industry. Start your food venture your way, Experience the power of Deonde, and start a free trial today.
FAQs
1. What is Zomato and What Services Does It Offer?
A: Zomato is an online, on-demand food delivery platform that allows customers to search for hyper-local restaurants, browse menus, checkout, make payments, and place food orders for home delivery.
2. What Makes Zomato Different from Other Food Delivery Services?
A: Zomato runs on a multi-faceted business model and can cater to a variety of target consumer segments. Its restaurant aggregator model, subscription-based model, advertising model, delivery partner network, and data-driven business model have made it a one-stop shop for all things related to dining out or food ordering.
3. How do Restaurants Benefit from Zomato?
A: By having their menus listed on the Zomato interface, restaurants can increase their online brand visibility and attract more customers. Zomato also supplicates restaurants with a vendor portal to further aid their workflows and marketing efforts.
4. What is Zomato Gold, and How Does it Contribute to the Revenue?
A: Zomato Gold is a subscription-based program that offers exclusive deals, discounts, and complimentary items at partner restaurants to subscribers. Users pay a subscription fee to access these benefits.
5. What is Zomato’s Approach to Partnerships with Restaurants?
A: Zomato acts as an aggregator platform, partnering with restaurants, cafes, and eateries to list their menus, prices, location details, and customer reviews. Users can browse these listings, place orders for delivery or pickup, and make payments through the Zomato app or website.
