A CASE STUDY ON ‘ZOMATO’

Surprisingly, Zomato is nothing but a word which rhymes with Tomato. Zomato is an online platform started as a restaurant aggregator that provides information, digital menus, user-reviews of restaurants. In 2008, It was created just like any other startup with a motive to help people discover restaurants in a particular area. Initially, it was started underneath the name ‘Foofiebay’ to begin with. Later in 2010, it was re-branded as ‘Zomato’ for two primary reasons. Firstly, it would restrict the brand to only food and restaurants, so venturing into other adjacencies (like nightlife) would become difficult, and secondly, ‘foodiebay’ has ‘eBay’ as part of its name which would create doubt in its legality.

A CASE STUDY ON ‘ZOMATO’

Surprisingly, Zomato is nothing but a word which rhymes with Tomato. Zomato is an online platform started as a restaurant aggregator that provides information, digital menus, user-reviews of restaurants. In 2008, It was created just like any other startup with a motive to help people discover restaurants in a particular area. Initially, it was started underneath the name ‘Foofiebay’ to begin with. Later in 2010, it was re-branded as ‘Zomato’ for two primary reasons. Firstly, it would restrict the brand to only food and restaurants, so venturing into other adjacencies (like nightlife) would become difficult, and secondly, ‘foodiebay’ has ‘eBay’ as part of its name which would create doubt in its legality.

Later, the expansion of Zomato facilitated food delivery services to the customers at their doorstep, which was earlier taken care of by restaurants only. It entered the online food ordering space in the year 2015. In ten years, it has emerged as India’s largest online restaurant discovery service, with more than 1 million restaurant listings across 10,000 cities in 24 countries. Recently, amid the pandemic (COVID-19) outbreak, Zomato initiated grocery delivery across the country as well.

 

STRATEGIES AT ZOMATO

  1. Cost leadership

Zomato charges 7 % on each order size of the restaurants, whereas other rival companies like Foodpanda, Tinyown, etc. charge 15-20%, therefore restaurants can keep their prices low and provide quality food to the customers. This strategy gives customers an experience of value for money and a genuine reason to come back.

 

  1. Capital investment

Year

Investment Raised

From

Stake

2010-2013

US$ 16.7 Million

Info Edge India

57.9%

November 2013

US$ 37 Million (additional)

Sequoia Capital and Info Edge India

 

November 2014

US$ 60 Million

Info Edge India, Vy Capital, and Sequoia Capital

 

April 2015

US$ 50 Million

Info Edge India, Vy Capital, and Sequoia Capital

 

September 2015

US$ 60 Million

Temasek (Singapore government-owned investment co.) along with Vy Capital

 

October 2018

US$ 210 Million

Alibaba’s payment affiliate ‘Ant Financial’

10%

September 2020

US$ 62 Million

Temasek

 

October 2020

US$ 52 Million

Kora (US-based Investment firm)

 

 

  1. Business model

Zomato follows a very simple Business model. When it decides to start afresh in the new city, the assigned people from such city collects data about the restaurants and clubs, then the centralized Team based out of NCR processes and cross-checks the data and confirms its validity. The confirmed date is then put up on the website. However, Zomato has a separate team for advertising, they sell the website to restaurant owners and attracts them to advertise with Zomato. It is important to note that 95% of the revenue is earned from the local restaurant’s advertisements, while the rest is attributed to event ticketing and restaurant booking.

 

  1. Marketing Strategy

The marketing techniques of Zomato is Direct SMS and Direct Mailers. Through Direct SMS it managed to target six Lakh customers initially. Zomato believes it increased its market reach with this technique by blasting 6 SMS per day for one whole month. Next in Direct Mail, Zomato reached corporates and professional employees as their primary target, it sent newsletters and pamphlets specific to their business.

 Right now, Zomato promotes itself as a Food network on different social media platforms. It follows the simple strategy to always be there for its customers and sends only the best content. It mainly uses Twitter for interactions and conversations, and Facebook for pushing the content and for reaching the maximum people possible.

 

  1. Target Audience

Zomato’s target was divided into two sorts, firstly, the individuals who intend to arrange their nourishment home, and secondly, the individuals who like to feast on. It offers nourishment conveyance to the individuals to need it conveyed at their workplace or anywhere, and offers other individuals who like to feast out with its Zomato Gold Program.

 

  1. Future Aim

Zomato’s Net has reached near to 55% and has demonstrated a rapid growth with is a very decent number. It's 20% of the income is gained from online nourishment requesting business. Zomato hopes to grow in 13 more nations outside India with its image as a worldwide brand.

 

  1. Challenges

  • Most of the youths utilize Zomato to plan for evaluating another café. Zomato appraisals are fruitful because they never uncover how they compute it. What's more, they continue controlling it at their will. You can worry, you can gripe yet can't upset it.

  • They began Zomato requesting at some point back, which can be of unrivaled assistance if you have conveyance decisions. They tend to remove a strong cut from it which you can attempt to consult with them. This could encourage acquiring more requests basically in light of an enormous userbase, and the cashback that they award.

  • A fierce challenge from brands like Swiggy, Food Panda, Uber eats, and so on.

 

 

  1. Achievements

  • Zomato as a global restaurant discovery application has recently revealed that its online sustenance requesting administration has reached more than 2 million requests in the long stretch of March 2017.

  • Zomato's online sustenance requesting administration started in 2015 and just around two years, the organization has come up to process 2 million requests in a single month. From 12,000 cafés to 18,000 eateries are presently cooperating with Zomato for online nourishment conveyance. There has been an upgrade in their client maintenance which has improved the client experiences and administration as well.

 

  1. Change in Logo in recent years

 

CONCLUSION

Zomato has helped many cafés to pitch their business underneath their space to expand their everyday business in the long run. Many conveyance people who work part-time or full-day occupation have been immensely benefitted from this idea. In many ways, Zomato has helped India in expanding its Gross Domestic Product (GDP) as well.

 

 

BY -

Sharmili Singh