Case study of Zomato Start-up

About:

Zomato was founded by Deepinder Goyal and Pankaj Chaddah in 2008 and is the Indian restaurant aggregator and food supplies service. Zomato provides restaurants with information, menus, and user feedback, as well as food supply optioned from partner restaurants in specific cities.

STORY BEHIND THE Concept:

Zomato is an Indian group founded in Delhi NCR in 2008 by Deepinder Goyal and Pankaj Chaddah.

Zomato originally began as a ‘’Foodie Bay” but was renamed ‘’Zomato; in November 2010. Two IIT graduates, Deepinder Goyal and Pankaj Chaddah were formed to found Zomato. In July 2008, Zomato was created. In New Delhi, they were Bain & Co-workers. Deepinder once saw his colleagues who were continuously demanding food from different restaurants. That’s when Deepinder came up with the idea to turn these restaurant menus into a digital application.

ZOMATO Business Plan:

Zomato is an Indian food supply company offering the search application.

Which have restaurant detailed details?

It assists consumers globally in discovering rates, reviewing restaurants, and creating a network of trustworthy foodies.

• Restaurant Listings / Advertising: Zomato was merely a listing website and a restaurant directory in its first avatar. This brought in revenues from ads from restaurants that entered the network. Extending this further after the introduction of food delivery and restaurant reservations, Zomato now charges restaurant commissions to be prominently put on the list. Restaurants can pay for promoting their events or deals as well as their overall banner which brings increased visibility and conversions from users of Zomato.
• Food Delivery: For example, Zomato charges a commission to the restaurants on the basis of orders through its food delivery company. Although users pay a delivery fee, Zomato receives a commission for each delivery to restaurants which are then divided between the delivery partner and the client. Restaurant commissions differ depending on whether Zomato is shipping, or whether the restaurant is using its own riders. This is said to add to the overall profits of the company in a limited way due to the massive rivalry and the need for profound discounts etc.
• Subscription programs: With Zomato Gold for customers and guests, and restaurant subscription options, Zomato has opened up a steady revenue stream. While users are paying a subscription fee to access the Zomato Gold loyalty program which brings exclusive deals, restaurants are also paying a monthly fee to be part of Zomato’s bouquet. Restaurants also pay Zomato a monthly fee for miscellaneous services such as live monitoring, tamper-proof packaging branded with Zomato, and more.
• Live Events: Zomato joined last year’s branded live events market with Zomaland. Zomato charges an entry fee for users to visit Zomaland, where they can experience live musical performances and other activities, in addition to food. It had organized the entertainment carnival in Delhi, Pune, and Bengaluru in 2018, where over 100 K people appeared to be claimed by Zomato. Zomaland heads for Pune, Delhi, Bangalore, Hyderabad, Mumbai, Jaipur, Pune, Chandigarh, and Kolkata this year.
• White Label Access: Zomato also allows companies such as Zomato Whitelabel to create a personalized food delivery app to offer restaurants offers. It also works with consulting companies for cloud kitchens and restaurants. Zomato partners with select restaurant operators to help locate expansion sites at a low fixed cost, but with greater product choices. It gives those restaurant partners the necessary licenses and operational enabling.
• Zomato Kitchens: To facilitate the selection of restaurant operators to provide kitchen infrastructure services, Zomato partners with entrepreneurs to create and operate Zomato Kitchens under various labels. With an investment of INR 35 Lakh and more this helps entrepreneurs finance restaurants in the right place. Zomato says that it offers investors returns within the range of INR 2 Lakh to INR 4 Lakh per month, with 180 + affiliate kitchens already in service.

As it has increased in size and scope, Zomato has attempted to reduce dependency on cash-burn-reliant models and simplified the entry into enabling and other revenue streams produced by users. Zomato’s cash burn primarily involves keeping users against her competitor Swiggy. However, Zomato could soon be able to benefit from other parts of its business model, being in the line of fire for extreme discounting practices.

FUNDING by INVESTORS:

1.2010–2013: raised by $16.7 million from Info Edge India.

• Zomato’s five rounds of fundraising.
• August 2010: $1mn.
• September 2011: $ 3mn
• September2012: $2.3mn
• February 2013: $10mn
• November 2013: $37mn

2.November 2013: Raised by $37 million from Sequoia Capital and Info Edge India.

3.September 2015: Raised by $60 million from Temasek and Vy capital.

4.October 2018: Raised by $250 million from Alibaba.

5.later 2018: additional raised by $150 million from Ant Financial.

Marketing strategy:

• Festival market strategies
• Strong brand name
• Product Strategy
• Pricing strategy
• A telephone call and direct mail promotion
• Coupons and price offer
• Online delivery application

Challenges faced by Zomato:

• There is already a very strong competition on the market, which has defined customer criteria to succeed.
• Zomato brands stake its name if anything goes wrong that ends customers are affected by.
• Zomato must feel totally in the regular food market, operate with a very low 50/-ticket size without minimum order delivery order necessary. The biggest challenge is to keep up high margins because of costs associated with food production, processing, and supply.
• The biggest challenge they had faced was to find a way to cover all the cities to not miss a single, fine restaurant and to have a variety of fine restaurants on all menus.

The successive factor of Zomato:

• Strong advertising channel.
• Efficient personnel.
• The good rating system and social media.
• Experienced sources of funds.

Result:

Zomato becomes one of the successful food delivery apps in India. In the financial year ended March 31, 2019, Zomato reported a three-fold rise in sales of $206 million, while the topline’s remarkable growth was attributed to a splash of money for new customers than before.

“Zomato’s perfect” is a wonderful food order service online. Indians love this application and they can order our food in a few minutes. In their office door. Even they can pick their favorite restaurants and include food in their cart and order. Even the customers appreciate the Zomato food delivery apps start-up in India.

References:
Information was taken from Google, Wikipedia, and particularly from their startup website and app.

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