Zomato Case Study - Delicious Delivery!
India’s first and one of the leading multinational restaurant aggregators and food delivery companies.
In just over a decade, the dream of 2 IIT graduates to provide people easy access to restaurant food turned into a global corporation currently worth over $5 billion.
In 2008, when Deepinder Goyal and Deepak Chaddah were working in their Delhi office, they noticed that many people were waiting in long queues just to get a glimpse of the menu. That’s when the idea of Foodiebay was born. They started uploading the soft copies of the menu on their website. Following this, everyone in their office started
using it, which saved them a lot of time. As a result, traffic to their website increased and soon they expanded their website to make it available to everyone in the city.
Soon the services were extended to cities like Mumbai and Kolkata.
They raised their angel investment and rebranded to Zomato in 2010. The founders wanted the name to be easy to remember and make people think of food. Zomato’s got a zing to it and is originally a play on the word ‘tomato’. They also wanted to avoid any confusion with “ebay”
Given Foodiebay’s huge user base and growth rates, the founders decided to modify it and internationalize it in 2012, first in the UAE and subsequently to Sri Lanka, Qatar,
UK, Philippines and South Africa. In 2013, Turkey, Brazil and New Zealand were added to the ever-growing list of expansions.
Zomato’s main source of revenue today is the advertising channel that the portal offers to display, followed by the commissions it charges restaurants.
Zomato has had its fair share of setbacks.
● The first was the biggest hurdle. Finding a way to cover all restaurants in all areas in all major cities so that consumers who depend on it do not miss out on the finest restaurants in the area.
● A cyberattack in 2017, which threatened the sensitive database of 17 million user records but fortunately the hacker was only trying to prove the vulnerabilities in their system, which the company was quick to fix with his help.
● The #logout campaign in 2019, which surfaced when restaurants listed on the portal denounced it for eating into their profit margins by charging unreasonably high fees for Zomato Gold memberships and Infinity Dining, a Zomato feature that provided heavy discounts.
Zomato later discontinued the Infinity Dining service and changed Zomato Gold’s rules, and faced massive protests from partner restaurants.
Despite all this, Zomato saw a 177% growth in restaurant partners and added another 73K restaurants, bringing the total number of restaurants to almost 119K currently.
Today, Zomato is a team of 5000+ employees representing 32 nationalities, and in July 2021, it delivered its 1 billionth order. In its 12 years of existence, Zomato has acquired nearly 14 companies, most recently UberEats – India for $206M.
On July 14, 2021, Zomato held its highly anticipated IPO. It was a huge success, making it India’s largest since March 2020, and was massively oversubscribed.
More than just a food delivery platform, Zomato is a technology platform that connects customers, restaurant partners and delivery partners to meet a variety of needs.
● Customers use the platform to discover restaurants, read and write reviews, view and upload photos, order food, reserve a table and pay while dining at a restaurant.
● On the other hand, zomato provides restaurant partners with industry-specific marketing tools to attract customers to grow their business while providing a reliable and efficient last-mile delivery service.
● They also operate a one-stop sourcing solution, Hyperpure, that provides restaurant partners with high-quality ingredients and kitchen products.
● They also offer transparent and flexible earning opportunities to the delivery partners.
Zomato is now on an ambitious quest to evolve from a food tech company to a farm-to-table company.