Zomato Business model: How this online food delivery platform earns profit, let’s know here

Zomato, an online food delivery platform that is also a large-cap company, often comes up with new earning ideas and announcements. Recently, the food delivery firm announced the “shake it to make it” feature that allows users to avail of daily dining discounts of up to 50 per cent. Last month, Zomato launched the country’s first large order fleet, designed to serve orders for a gathering of up to 50 people for group events like parties. It also raised its platform fee by 25 per cent to Rs 5 per order. After that, the company’s shares also witnessed a jump.

Around the same time, Zomato received a tax demand and penalty order of Rs 11.82 crore related to GST on export services provided to its subsidiaries located outside India from July 2017 to March 2021.

Also Read: Online food delivery platform Zomato introduces ‘large order fleet’ for serving groups of up to 50 people

Zomato is currently available in 45 countries and receives around 2 lakh orders every day. Zomato competes with ‘Swiggy’, another big food delivery platform in the country. The company was listed on BSE and NSE on July 23, 2021.

Meanwhile, the global brokerage Goldman Sachs said in its April report that Zomato’s quick commerce and Blinkit’s implied valuation are higher than Zomato’s food delivery.

The shares of Zomato closed at Rs 191.65 each, down 2.09 per cent on BSE on Tuesday, May 7. At 11.24 AM today, May 8, shares of Zomato were trading at Rs 193.95 each, up 1.20 per cent on BSE.

Now, the question arises: what is the business model of Zomato, and how does the company earn profit? Here’s an explanation of its ways to earn money.

1. Restaurant listings

Zomato earns its largest chunk of profit from restaurant listings on its app. The company charges around Rs 1,000 for listing a restaurant. This is a one-time fee, which the restaurant has to pay, whether it receives orders or not.

2. Advertisings

Started with just listing business, Zomato later bought the advertising model. Through its app, Zomato advertises restaurants and charges fees from them. It has different advertising packages.

3. Live events

Last year, Zomato launched Zomaland, a branded live event platform. Zomato charges an admission fee for consumers to visit Zomaland, where they may see live musical performances and other events in addition to food. 

4. Subscription programmes

Zomato also offers ‘Zomato Gold’ to customers and users, as well as subscription solutions for businesses. While consumers pay a membership fee to get access to the Zomato Gold loyalty programme, which includes exclusive deals, restaurants pay a monthly charge to participate in Zomato’s offer portfolio. Restaurants additionally pay a monthly charge to Zomato for other services like as live tracking, Zomato-branded tamper-proof packaging, and more.

5. White Label access

Zomato also provides services such as Zomato White Label, which allows restaurants the opportunity to design a customised meal delivery app. Additionally, it provides consulting services to cloud kitchens and restaurants. 

6. Zomato kitchens

To provide kitchen infrastructure services to chosen restaurant owners, Zomato collaborates with entrepreneurs to establish and run Zomato Kitchens under various labels.

7. Blinkit

Quick commerce platform Blinkit is also a part of Zomato. Through this, the delivery fee, platform fee, or any other charge you pay for ordering goods is also added to Zomato’s account. At the same time, the charge taken for listing all the vendors on Blinkit is also received by Zomato.

8. Hyperpure business

This Hyperpure business especially supplies goods in bulk to its vendors. That means, if you are a vendor of Zomato and you need flour, rice, pulses, vegetables, fruits, or any packaging item, then you can get all that from Hyperpure at a very good price. In this way, whatever income the company earns from Hyperpure is also added to Zomato’s account.