Revolutionizing Food-Tech: Zomato’s Path To Market Leadership

Founded by Deepinder Goyal and Pankaj Chaddah, Zomato began as a solution to the problem of long lines in workplace cafeterias, but it swiftly grew into a global powerhouse in the food technology industry. Zomato was founded in 2008 under the name Foodiebay. It was later renamed Zomato. It began as a simple platform for browsing restaurant menus online. It was an instant success, appealing to foodies looking to try new restaurants without the fuss.

Zomato's early popularity came from its thorough restaurant listings, user assessments, and menus. In 2015, Zomato entered the food delivery sphere. This was a major changer for Zomato since it increased its user base and put it in direct rivalry with well-known players such as Swiggy. Zomato effectively tailors its services to local tastes, such as varied cuisines, variable pricing, and fast delivery. This versatility was important in Zomato's growth beyond merely a culinary app.

By 2020, Zomato was delivering more than one million orders each day in India. The move to enter food delivery was a masterstroke, with the company's revenue jumping from ₹466 crore in FY18 to ₹2,604 crore by FY21.

Zomato's acquisition methods have played a significant role in its extraordinary expansion. In 2020, for $350 million, it acquired Uber Eats India, which increased its market share by 20% and added millions of new consumers. This acquisition enhanced Zomato's position in the Indian market while also eliminating a big competition.

The unicorn's capacities go much beyond food delivery and restaurant listing. In 2022, Zomato invested $568 million for the acquisition of Blinkit (previously Grofers). This marked Zomato's foray into the quick-commerce industry, which is expected to reach $5 billion in India by 2025. By including grocery delivery into its platform, Zomato established itself as more than simply a food delivery business; it became a one-stop for all customer requirements, marking a sense of supremacy in the market.

Furthermore, Zomato's recent acquisition of Paytm Insider is another brave move into an altogether new industry. It has added the event ticketing sector to its growing portfolio. Zomato is now entering the live event sector, offering customers the ability to easily locate and acquire tickets to concerts and sporting events. This deal expands Zomato's platform beyond food delivery to include fast grocery and event tickets.

Food delivery market is a highly competitive space. Swiggy's market share in the food delivery industry is 43% as of the financial year (FY) 2024, while Zomato's market share is 57%. Zomato has been able to increase its market share by making acquisitions and investments in food tech and online grocery.

Zomato recorded a net profit of ₹175 crore in Q4 FY24, up from a loss of ₹188 crore in Q4 FY23. Blinkit, its quick commerce sector, was also profitable on an adjusted EBITDA basis.

In Q4 FY24, Blinkit's income more than doubled to ₹769 crore from ₹363 crore in the previous year. This contributed ₹2,301 crore during the full fiscal year, up from ₹806 crore in FY23.

Following are Zomato’s key metrics for FY24

• GOV: INR 32,224 Cr with a 23% YoY growth

• Orders: 753 million with a 16% YoY growth

• Average monthly transacting customers: 18.4 million with an 8% YoY growth

• Average monthly active delivery partners: 400k with a 22% YoY growth

• Average monthly active food delivery restaurant partners: 247k with 18% YoY growth

• Active Zomato Gold members: 7.4million with a 3x increase in YoY growth.

  
  

  

Zomato stands out for more than simply its business approach and acquisitions. The corporation has an impressive social media presence, with over 1.5 million Twitter followers. Their social media presence, which is filled with entertaining banter and memes, is popular among younger audiences. This conversational and accessible style also elevates Zomato to the level of marketing brilliance. Zomato’s founder Deepinder Goyal who was previously a shark at Shark Tank, is also a mastermind when it comes to unique marketing approaches. Recently, he acted as a Zomato delivery partner to assess the working conditions for delivery staff. He assessed various issues faced by their delivery partners and effectively worked towards easing their work process. Such initiatives deeply resonate with the public and employees and further improves employee and consumer retention rates.

Without a doubt, the market for Zomato is packed with competitors. Zomato's ability to shine stems from its unique strategy. Its hyper-local initiatives, such as collaborations with thousands of cloud kitchens and local eateries, enable it to serve to a wide range of preferences across India. The Zomato Gold membership program, which provides members with unique pricing, has over 7.4 million subscribers, creating a consistent supply of revenue.

Zomato's IPO in July 2021 was another milestone. Zomato's shares, as the first Indian unicorn to go public, were in high demand, demonstrating investor confidence in the company's concept. The successful IPO not only raises significant funds for future growth, but it also cements Zomato's position as a food-tech industry leader:

The next move into the B2B market. With the advent of Hyperpure, Zomato aims to revolutionize the restaurant supply chain. Hyperpure was founded in 2016 with the goal of delivering high-quality, fresh products directly to restaurants. More than just a delivery service, it guaranteed that restaurants obtained high-quality produce, dairy, and meat from suppliers, all while maintaining quality standards. By simplifying the entire process, Hyperpure not only helps restaurants maintain consistency and improve their menus, but it also improves operational efficiency. This vertical is consistent with Zomato's aim to provide a holistic ecosystem that benefits both customers and restaurant partners. It also solidifies Zomato's position as a leader in the food tech sector.

Zomato’s story is complemented with a sense of social responsibility as well. In 2018, Zomato launched a non-profit initiative called Feeding India. This vertical is committed to combating hunger and food wastage across the country. It is successfully growing into a major operation to combat food insecurity.

This initiative, besides just being a CSR program, reflects Zomato’s holistic approach to business. The new vertical claims to have distributed over 200 million meals.

Zomato's transformation from an ordinary restaurant listing site to a food-tech giant is a testament to its extraordinary growth. At its foundation, Zomato uses a network of data-driven insights and technology to improve user experience. Zomato manages its huge logistical network by carefully utilizing predictive analytics and geographical data. Zomato has implemented machine learning models to improve its Estimated Time of Arrival (ETA) predictions for deliveries, optimizing delivery times and enhancing customer satisfaction. Their model-based approach focuses on geospatial features, speed, and compliance metrics. This sophisticated approach reduces delivery times and operational costs while boosting customer satisfaction. Furthermore, Zomato's investment in cloud kitchens and vertical integration via Hyperpure demonstrates a thorough awareness of the complexity of the food supply chain, focusing on both quality and efficiency. This significantly improves Zomato's market position.