Zomato business model explained



Zomato makes available outlets on the basis of the venue, the option of the kitchen, and the budget defined by the clients. It also provides online delivery services to customers that make the food ordering process smooth and secure. In order to offer kitchen infrastructure services to selected restaurant operators, zomato partners with entrepreneurs to set up and run zomato kitchens under different labels. This helps entrepreneurs to fund restaurants in the right location with an investment of inr 35 lakh and more. Zomato says that it provides returns to investors within the range of inr 2 lakh to inr 4 lakh per month, with 180 + affiliate kitchens already up and running.


Zomato has produced numerous streams of income, and some are given here, helping you understand how zomatos makes enormous profits by using its business model and diversity. In q2 fy22, revenue from hyperpure grew by 49% qoq to inr 1.1 billion ($15 million). Hyperpure service is present in 8 cities and zomato supplied ingredients to over 12,000 restaurants every month on an average in q2 fy22. Restaurants that buy ingredients from hyperpure are recognized through a ‘hyperpure inside’ tag on zomato.


It has earned advertisement sales from restaurants that have entered the network. Broadening this further after the emergence of food delivery and restaurant reservations, zomato is now paying commissions from restaurants to feed prominently. Restaurants can pay for their promotions or events, as well as for their banner, which enhances the visibility and conversion of zomato users. Till 2015, zomato was availing the menu cards for the customer of restaurants, but they started the online food delivery business in 2015. Before zomato, each restaurant that offered food delivery service had to keep its own in-house delivery agents and provide them with bikes. These in-house delivery agents were idle most of the time, causing undesirable overhead costs.


Craving for your favourite cuisine and looking to get the food delivered at your doorstep too? By browsing the website or online app of food search engine zomato, we can easily place our food order by exploring various restaurants and their menu. Moreover, it also offers attractive deals and discounts to make our overall food experience more satisfying. Zomato is a well-known name in india in offering services of restaurant-cafe search and online food delivery.


But this question always revolves in everyone’s mind how does zomato earn money by just listing the restaurants on its online portal. Founded in 2008 this restaurant discovery app is basically first which came out with an idea like this. Zomato has fully changed the working of the food and restaurant industry by implementing the idea of providing universal access to different restaurants and cafes. The business model of zomato consists of various sources of revenue generated by the application.


This is a marketing strategy to entice the customer to buy more at a considerable rate. The fees once paid for the subscription are available for a certain time and then can be renewed as the time comes. Advertising on their website and app zomato’s advertising is to the point, when users search for specific keywords, ads of restaurants are shown for that specific keyword. Zomato has strengthened its presence in the food market at a global level since its inception. Zomato has generated lots of income sources, and certain are listed below, which helps you understand in detail how zomato earns huge profit through its business model and diversification.


Though the parameters are different, however snowman and zomato has similar acceptance in indian market in terms profitability and sales. Competition remains to be the biggest risk, as customer takes no time to shift to different platform where the discounts are higher. With all the above facts, zomato turns out to be new startups business coming up with the ipo. Zomato has a huge market size to tap and have potential to grow its revenue by more than 20% in the coming few years. However, profitability of the business still remains a big question.

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