Zomato case study
This Zomato case study will give you wonderful business insights. You will rarely find a person who has not heard about Zomato if you want to order food online then Zomato is the first name that will pop up in your mind. Zomato is India’s one of the most famous startups, and this case study is solely dedicated to the hero of the Indian startup ecosystem i.e. Zomato. It is one of the trailblazers in the startup world of India which inspired many other people to start their own ventures by using technology.
Recently they brought IPO(Initial Public Offering) on the Indian Stock Market and got a wonderful response from investors, and its market cap crosses 1 lakh crore on its first day of trading.
Zomato is growing exponentially and aggressively since its inception but What is the reason behind its growth? How did they manage to scale a food delivery business despite having numerous obstacles? You will find all of these answers after reading this case study.
Zomato is a restaurant aggregator and food delivery company based out of India. It operates its business in more than 20 countries and around 556 cities & towns in India. Zomato was founded by two IIT alumni’s Deepindra Goyal and Pankaj Chaddah in 2008.
Earlier it was named “Foodiebay” but later it was renamed “Zomato” in 2010. It was started as a website that provided restaurant discovery service, menus, reviews, and other information to the people but later it pivoted its business to a food delivery company and now it operates as a full-fledged food tech company.
Presently it is headquartered in Gurgaon, Haryana. Zomato has achieved tremendous growth in its journey gaining unicorn status in 2015 and till that time its valuation has increased exponentially.
Zomato’s Business Model (Zomato Case Study)
There are various channels and mediums through which Zomato earns their massive revenue, along with food delivery service they have diversified their business to many services like restaurant advertising, restaurant listing, subscription programs, live events, Zomato’s kitchens, white-label access, and many other different sources.
Here’s a list of a brief explanation of Zomato’s business model
1. Restaurant Listing and Advertising
Restaurant Advertising and Listing accounts for a major chunk of revenue for Zomato. Many people get shocked when they came to know that Zomato is an advertising company too for restaurants. The restaurant can advertise its offering by buying a banner ad on Zomato’s App or website in order to increase its visibility and conversion rates. Zomato’s charges a specific amount for banner ads from the restaurant and thus it contributes to a major source of its revenue.
2. Subscription Programs
Another major source of revenue for Zomato is the subscription program. Like every other technology and internet company Zomato also has a vast amount of data of its users like what the user is searching for? What does he/she like to eat? and much other important information. Restaurants pay a subscription fee to access this data and analytical tools which help them to know the consumer preference and interests.
3. Food delivery
The main business of Zomato’s is of food delivery service, it charges commission from restaurants on the order value and now it has started charging delivery charges to the customers for ordering food from its app. The money generated through delivery is split between the delivery partner and the company. This service adds a significant amount to their overall revenue but it is still comparatively low because of the heavy discounts it offered to customers.
4. Zomato’s Kitchen
Another source of revenue for Zomato is infrastructure services. In this service, Zomato provides kitchen infrastructure services to restaurants operators by forming partnerships with them to open and operate Zomato’s kitchens under different labels. It helps the restaurant owner to invest their money in setting up the restaurant at the perfect location under the guidance of Zomato. For this service, Zomato charges money from the entrepreneur opening restaurant.
5. Live Events
Zomato ventured into the business of organizing live events with “Zomaland”. They earn money by selling tickets for this event, you have to pay entry fees to enter the Zomaland. You can enjoy and experience several other things like a live musical performance and other entertaining activities along with food. In 2018 they had organized an entertainment food carnival in Delhi, Bangalore, Pune attended by more than one lakh people.
6. White label access
Zomato introduced a service named Zomato Whitelabel in which it provides services of developing customized food delivery apps for restaurants. Under this service, Zomato also provides consultancy services for setting up new restaurants and cloud kitchens. This is another service from which Zomato earns revenue.
Zomato’s Marketing Strategy (Zomato Case Study)
Zomato’s Digital Marketing strategy (Zomato Case Study)
Zomato is a pro player in using social media for its marketing purposes. It is known for its witty social media posts which it creates for connecting to young audiences since the majority of its target customers are youth.
Zomato is the king of moment marketing, they never leave any chance of engaging with the people by posting on trendy topics.
Here are some awesome social media posts created and posted by Zomato
Zomato’s offline Marketing Strategy (Zomato Case Study)
Not only Zomato’s digital marketing amazes people but they are very good at surprising people with their astonishing billboards advertisement which they placed in various cities in India to connect with the older audiences.
Here are some glimpses of their offline advertising strategy
Zomato’s Funding and Investors
Till today, Zomato has raised a total of 2.1 billion dollars in funding over 21 rounds.
Zomato’s is funded by 25 investors and its major investors include Infoedge, Tiger Global Management, Fidelity Management &Research Company, Luxor Capital Group, Mirae Asset Venture investment, etc.
Zomato has acquired around 14 companies to date and major organizations which it acquires are Uber Eats-India, Runnr, Sparse Labs, Next Table Inc, Urbanspoon, etc. Recently they acquired FITSO for rs.1 billion in 2021.
Conclusion of this Zomato Case Study
After reading these case study we can easily summarize that Zomato is one of the fast-growing internet companies in India or can be stated as one of the largest food-tech companies. With the listing on the stock exchange and acquisition of other companies, it is growing very aggressively. In the fiscal year 2019-20, they earned a revenue of $350 million which is a very huge achievement for a 12-year-old company.
Most of the credit for Zomato’s success goes to its strategies of various business models and marketing efforts, Zomato’s witty and tremendous digital marketing, as well as offline marketing, allowed them to constantly engage with the audience and allowing them to stand out from its competitors.
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