Recommended
More Related Content
Similar to ZOMATO: AN INDIAN STARTUP GROWING STRONGER AND SUCCESSFUL
Similar to ZOMATO: AN INDIAN STARTUP GROWING STRONGER AND SUCCESSFUL (20)
Recently uploaded
Recently uploaded (20)
ZOMATO: AN INDIAN STARTUP GROWING STRONGER AND SUCCESSFUL
- 1. PROJECT REPORT ZOMATO M.Com IV Sem – Marketing Management (Session 2020-21) THE BHOPAL SCHOOL OF SOCIAL SCIENCES Submitted To Submitted By Dr. Amrita Sahu Sakshi Kerketta Associate Professor Roll No.- 19103043
- 3. CERTIFICATE FROM THE PROJECT GUIDE This is to certify that the Project Report titled “Market analysis of Zomato” is a bonafide work of Sakshi Kerketta enrolment number R170190280566 undertaken for the partial fulfillment of Masters in Commerce (M. Com) degree of Barkatullah University under my guidance. This project work is original and has not been submitted earlier for the award of any degree or diploma of any other University or Institution. Signature of the Guide Dr. Amrita Sahu Associate Professor Department of Commerce, BSSS, Bhopal
- 4. DECLARATION I SAKSHI KERKETTA daughter of Santosh Kerketta certify that the project report entitled on “Market Analysis of Zomato”, Market analysis report on Zomato, prepared by me is my personal and is authentic work under the guidance of Dr. Amrita Sahu, Associate Professor, Department of Commerce. Date: 15/06/2021 Signature of the Student Place: BHOPAL Name: Sakshi Kerketta Class: M.COM (IV SEMESTER) Roll Number: 19103043
- 5. INDEX 1. Introduction 3 2. Objectives of analysis 8 3. Problems faced by the company 8 4. Analysis 10 • Zomato in Indian market 10 • Zomato business model 11 • Marketing strategies 12 • Covid-19 related initiatives 17 • Zomato vs Swiggy 22 5. Suggestions for improvement 27 6. Conclusion 28
- 6. ZOMATO ZOMATO : AN INDIAN STARTUP GROWING STRONGER AND SUCCESSFUL INTRODUCTION Zomato is an Indian multinational restaurant aggregator and food delivery company founded by Pankaj Chaddah and Deepinder Goyal in 2008. Zomato provides information, menus and user-reviews of restaurants as well as food delivery options from partner restaurants in select cities. Type of Company : Public, Unlisted Industry : Online food ordering Founded : July 2008; 12 years ago Founder : Deepinder Goyal and Pankaj Chaddah Headquarters : Gurgaon, Haryana, India Area served : Worldwide Key people : Deepinder Goyal (Founder&CEO), Pankaj Chaddah(Co-Founder), Gaurav Gupta (COO) Services : Food delivery Revenue : Increase ₹2,486 crore (US$350 million) (2020) Net income : Negative increase ₹−2,451 crore (US$−340 million) (2020) Owner Info : Edge(18.6%), Uber(9.1%), Alipay Singapore(8.3%), Antfin Singapore(8.2%) Number of employees : 5,000+ Website : https://www.zomato.com/bhopal How was Zomato started? The story of Zomato started in the office of Bain & Company in Delhi. Deepinder and Pankaj worked at this company when they thought of this idea. They saw people standing in a queue at lunchtime and give the order for their food when their turn came. From there they got an idea of “Foodiebay” which became a prologue to Zomato.
- 7. At first, they started scanning all the menu items of the restaurant and listed them on their intranet website Foodiebay.com. Later on, after seeing a huge surge in their traffic, they decided to launch their website open to the public. They began listing restaurants from Deli NCR on their portal and quickly expanded to other cities like Kolkata and Mumbai. In November 2010 they changed the name Foodiebay to Zomato. Their idea germinated in the form of Foodiebay.com they put up scanned copies of the food court menu onto their company’s private network. Everyone at the company soon started using this service and there was a sudden surge in the website traffic. By now this wasn’t just confined to the walls of their office. Everyone else around their vicinity also started using these scanned copies. The first professional restaurant menu that Deepinder and Pankaj uploaded onto their site was that of Hauz Khas in Delhi. After this, they started expanding this idea into other metropolitan cities of the country including Kolkata, Mumbai, and Bangalore. And once a word was around, thousands of people started using their website to get to know about the best restaurants around. It was this interest from people around that encourage both Pankaj and Deepinder to think of going PAN India with this idea. This is when the idea of renaming the site came into their minds. They wanted something with more of a punch and something easier to remember and hence came the word ZOMATO in November 2010. The founders then wanted to make life a little easier for their users and hence came the idea of building a mobile application. With this growth in their business and their ideas arose a need for funding. The story behind the name Zomato One of the reasons why they decided to change the name in late 2010 from Foodiebay to Zomato was that they wanted a powerful brand name. After endless debate over several cups of coffee, they came up with the name Zomato. Decided to keep the idea of food at the center and choose a name that is short, easy to remember and makes people think of food. Zomato’s got a zing to it and is originally a play on the word ‘tomato’. They also wanted to avoid any confusion with “ebay”, they wanted to be sure that they weren’t taking any chances when creating a brand they’d want to take international. Focusing on brand recall and communicating what they stood for is of primary importance to any consumer internet company and to think they have got most of it right. Zomato - Startup Launch When the founders launched this website, it wasn’t called Zomato back then, it was called Foodiebay. And it initially started out in Delhi, then the services were extended to cities like Mumbai and Kolkata. With the tremendous user base and growth rates that Foodiebay brought
- 8. in to the founders, they decided to modify it and take it international. And that’s when this venture started being called Zomato, as we know of it today. It was in 2010 when Foodiebay was officially rechristened as Zomato. Zomato - Name, Tagline, and Logo The founders changed Foodiebay to 'Zomato' to make it more prominent, simple to memorize and primarily to eliminate the confusion with the website eBay. Zomato's tagline is "Never have a bad meal". Zomato - Business Model and Revenue Model The main source of revenue for Zomato now is the advertisements channel that the portal offers to display. This accounts for most of its revenue followed by the commissions that it charges to the restaurants. It works on a commission business model. Zomato - Hyperpure Hyperpure by Zomato is changing the way restaurants work. It is Zomato’s B2B foodtech vertical. Hyperpure allows restaurants to buy everything online from vegetables, fruits, poultry, groceries, meats, seafood to dairy and beverages. It claims to be working directly with farmers, mills, producers, and processors to source these products thus ensuring quality and consistency. It is an initiative by Zomato to provide fresh, hygienic, high quality ingredients and supplies. Zomato at a glance Currently, there are over 100 million Zomato users worldwide and people use the application to get in touch with other foodies around the globe so that they can get the best of food in whatever place possible. This being an added advantage, big restaurants from around the globe post their advertisements on the Zomato app and this is basically how Zomato makes its money. As of 2018, Zomato clocks 3 million orders on a monthly basis with 1.4 million restaurants listed on its platform. It is available in 10,000 cities and 23 countries worldwide. Another form of income for them is the sale of tickets for food festivals that they partner with or sponsor. Not to forget the hardships that Deepinder Goyal and Pankaj have had to face in their quest to the top of the mountain. Since the whole plan from the start of this business was to be able to reach out to each street in every city to provide the best services to its users, there have been multiple ups and downs. Zomato’s services in the cities of Kochi, Coimbatore,
- 9. Lucknow and Indore are currently suspended because their markets weren’t ready for this level of business These small downfalls have however never disheartened either Deepinder or Pankaj. Zomato proudly boasts over 1.5 million restaurants on its database and they don’t seem like they want to stop at this and one day hope to be at power with global players present across the world. Zomato is also India’s first-ever global application. Both Deepinder and Pankaj are leaving no stone unturned and this is the main reason as to why Zomato continues to climb up the ladder of success. Looking to launch your own career but don’t have the required skillset. Don’t worry, checkout Verzeo’s internship and certification programs which will help you in gaining all the right skill to launch your own startup. The biggest challenge faced while setting Zomato up and while taking it overseas. One of the biggest challenges faced by any fast-growing company is finding the right talent to fuel growth. Today they have a team of about 650 people globally and are looking at tripling that number in the near future. They keep innovating in the ways they hire and try to ensure that people fit in well in terms of skill, culture and attitude. However, the challenge continues to be finding the right people for the right job. Another major challenge has been to make sure that they have covered each and every street in the cities they’re launching in. The information needs to be relevant and comprehensive for users to keep coming back to use our product. Data collection teams in each city hit the streets on a daily basis and collect data first hand. One thing learned while going international is that there is no alternative to doing own market research or data collection. They send out teams to scout a market before decide to launch there and have their own teams working on gathering data to ensure accuracy and exhaustiveness. In fact, it was encouraging for the team to see Pankaj, Zomato’s Co-Founder and COO, sweating it out on the streets collecting data in the Dubai summer to launch Zomato UAE two weeks after Ramadan. Fundings raised by Zomato This idea of Deepinder’s and Pankaj’s impressed Sanjeev Bikhchandani, the founder of Naukri.com. In December of 2010, Sanjeev Bikhchandani provided Zomato with a funding of 1 million USD through his company Info Edge India and from here on, there was no looking back. The next round of funding that they got was again from Info Edge India and this time it was 3.5 million USD and again in the year 2013, Zomato received a staggering 10 million USD from Info Edge India which made Info Edge India a holder of nearly 50% of the shares in the start-up. Other investors for Zomato include Sequoia Capital, VY Capital, and Temasek. The funds just kept coming in after this. By the end of 2018, it is estimated that Zomato would’ve
- 10. received a funding of more than 300 million USD. This funding then gave Zomato the idea of expanding into more cities across India apart from Delhi, Bangalore, Kolkata, and Mumbai. So, they moved into Hyderabad, Ahmedabad, Pune, Chennai, etc. In September 2012, Zomato launched its services in Dubai, Sri Lanka, United Kingdom, South Africa, Turkey, and New Zealand. Investments by Zomato Between 2010 and 2013, Zomato raised approximately US$16.7 million from Info Edge India, giving Info Edge India a 57.9% stake in Zomato. In November 2013, it raised an additional US$37 million from Sequoia Capital and Info Edge India. In November 2014, Zomato completed another round of funding of US$60 million at a post- money valuation of ~US$660 million. This round of funding was being led jointly by Info Edge India and Vy Capital, with participation from Sequoia Capital. While in April 2015, Info Edge India, Vy Capital and Sequoia Capital led another round of funding for US$50 million. This was followed by another US$60 million funding led by Temasek, a Singapore government-owned investment company, along with Vy Capital in September. In October 2018, Zomato raised $210 million from Alibaba's payment affiliate Ant Financial. Ant Financial received an ownership stake of over 10% of the company as part of the round, which valued Zomato at around $2 billion. Zomato had also raised an additional $150 million also from Ant Financial earlier in 2018. In September 2020, Zomato raised $62 million from Temasek, after previously committed capitol from Ant Financial never came through. In October 2020, as part of a Series J round of funding, Zomato raised $52 million from Kora, a US-based Investment firm. In February 2021, Zomato raised US$250 million from five investors, including Tiger Global Management, at a valuation of US$5.4 billion. Expansion of Zomato in India – 2021 With the launch in 17 new cities, Zomato has expanded its online ordering and food delivery services to 213 cities in India, the online restaurant guide and food ordering firm said Monday. The newly launched cities include Bulandshahr, Shahjahanpur, Solan, Palwal, Rewari, Machilipatnam, Nandyal, Bhimavaram, Ongole, Srikakulam, Kadapa, Kottayam, Kollam, Khanna, Gurdaspur, Ambur and Deoghar. "Emerging cities are a major growth avenue for us and we expect them to constitute more than 50 per cent of our total order volume by the end of the year," Zomato Founder and CEO Deepinder Goyal said.
- 11. As the company grows, it is also trying to create value for everyone in the ecosystem, he added. "With 1.8 lakh delivery partners, we are creating jobs and skill-building opportunities for many in India. We are developing Zomato Kitchen hubs in smaller cities in India to drive growth for our restaurant partners," Goyal said. How Does Zomato Work? The main work of Zomato is to suggest local and nearby restaurants to users and receive orders from them. Users can place orders from their favorite restaurant based on ratings and reviews shared by previous customers.Perhaps this is why more and more startup owners are interested in developing an app similar to Zomato. It offers comfort to the users and helps business owners reach their local food business to new heights.Zomato’s working flow is simple, Step 1: From the desiccated app solution or website, users can explore various restaurants and order meals. Step 2: Particular restaurant owners receive an order request and start preparing a meal. Step 3: Once the food is ready to dispatch, it will be handed over to delivery providers. Step 4: Delivery providers deliver the meal to the customer’s preferred location. Step 5: From the given payment options, customers can make payments and share reviews based on their experience. OBJECTIVES OF ANALYSIS Zomato started as a Foodiebay.com startup, a service provider app which was supposed to be a restaurant directory which started in Delhi. Slowly Zomato expanded to other countries as well as cities in India. Launching a food delivery app in a country where people were not very used to takeouts, back then the culture of eating out was not popular in India. But an app which gave the service of ordering food and delivering it to our door step became popular and became a success. The main objective behind this analysis is finding out how Zomato managed to survive in the Indian market and how founders made it a huge success? What were their strategies? How the company handled the pandemic covid-19? And comparing Zomato with one of the top food delivery company Swiggy.
- 12. SUCCESS DOESN’T COMES WITH STEP 1. PROBLEMS AND TOUGH TIMES ZOMATO FACED. The most significant hurdle they faced was to find a way to cover all the areas in all the pivotal cities so the people who hinge on them do not fail to miss the finest restaurants. This complication was present in the initial stages and endures to be a hurdle. The graph of Zomato, that looks excellent this far, did not stay the same post 2014. The year 2015 brought with it hardships of all kinds and it was then that the company had to make some harsh decisions. After acquiring Urban spoon and rebranding it as its own, the venture failed miserably, so much, that the company was forced to lay off 300 employees to curb its losses, 10% of which were from the US. By 2016, things went out of hand to an extent that Zomato had to roll back its operations in various countries like the US, UK, Brazil, Chile, Sri Lanka, Canada, Italy, Slovakia, and Ireland. And when it finally resumed its operations in the said countries, Zomato had to work with remote services. There’s more lined up in their story. Zomato faced a major setback in the year 2017 when its existence was put at stake with a cyber-attack. A hacker had breached into the records of 17 million users from the database of the company. Soon after, Zomato understood that the data could only be accessed by the hacker and the breach was resolved after communicating with the hacker. As it later turned out, the hacker was only trying to prove a point that there existed security loopholes in the system. Consequently, in the year 2019, a campaign called #logout surfaced where restaurants listed on the platform called the company out for eating their profit margins via its features like Infinity Dining and Zomato Gold, which provided heavy discounts to customers. Covid-19 Impact Online restaurant guide and food ordering platform Zomato, last year in may laid off around 13% of its workforce on account of the impact of covid-19 pandemic. The company had around 4,000 employees in different roles. Founder and CEO Deepinder Goyal said multiple aspects of the company’s business have changed dramatically over the last couple of months and many of these changes are expected to be permanent. “While we continue to build a more focussed Zomato, we do not foresee having enough work for all our employees. We owe all our colleagues a challenging work environment, but we won’t be able to offer that to around 13 per cent of our workforce going forward,” he added.
- 13. Zomato faced several hurdles across cities while trying to deliver food. Online food delivery orders dropped up to 70% during 1st wave of covid, as customers step back to place orders and top restaurants were shut amid a lockdown. Zomato being a food delivery company faced problems post lockdown too as customers were afraid to order food because it could have been a potential carrier of virus. Even after restaurants opened orders were less in number. Now that restaurants and Zomato is using protective measures still if Zomato doesn’t innovates and markets properly it will face downturn because of tough rivals like Swiggy which is getting popular. ANALYSIS Pankaj Chaddah and Deepinder Goyal are the master brains behind this great food delivery application 'Zomato'. Zomato has been and is the most widely used ordering application that attracted many customers with its innovatory strategies. In the early 2000s, we weren’t accustomed to using our phones for purposes other than calling and text messaging. In fact, most of us were oblivious to the opportunities that this magic box could present! The end of the first decade of the century brought with it a revolution like no other. And it was during those crucial years of transformation when the foundation of Zomato was laid in India. Zomato in India Market Initially ‘Foodiebay’ only offered menu of the restaurants and review the properties online but later Chaddah and Goyal introduced food ordering. After that it started becoming popular. People working private jobs, bachelors, students, teenagers were the first target of the company as there were many reasons people could use food delivery. Working people had to wait in lines at restaurants during lunch which wasted time, people wanted to explore dishes and cuisines fancy restaurants offered and Zomato gave them this service. Enjoying food without actually visiting the restaurants. People no longer had to wait in lines or visit the place. Zomato made food one tap away which was new to Indian market and attracted my people. The Success Story of Zomato Food is the prime mover for anyone across the globe. Of course, there are many people who yearn for food and to taste a variety of cuisines that are available. The furtherance in the
- 14. technology has paved a way for the creation of many innovations and it is no less to mention that food delivery app development is one among them. In this extravagantly ornate system, it has become hard for every person to disburse time on everything. Besides, cooking food after a busy day entails a lot of time and that is what that has gained huge rage about these food delivering applications, where food will be delivered directly at your doorsteps. For all these ingenious thoughts, there are those unusual people who have a perfect understanding of all the trends and so are these people Pankaj Chaddah and Deepinder Goyal. They are the master brains behind this great food delivery application 'Zomato'. Zomato has been and is the most widely used ordering application that attracted many customers with its innovatory strategies. The formula of Zomato’s Success The founders of Zomato, Deepinder Goyal and Pankaj Chaddah consider that hiring the correct persons is the primary reason for their company's startling growth and moreover, it was also the greatest hurdle encountered by them while building Zomato. Now, they have a squad who are vital in bricking their dream project. Zomato’s business model in detail • Restaurant Listings / Advertising In its first avatar, Zomato was just a listing platform and a restaurant directory. This brought in advertising revenues from restaurants who joined the platform. Extending this further after the launch of food delivery and restaurant reservations, Zomato now charges commissions from restaurants to be placed prominently on the feed. Restaurants can pay to have their events or offers promoted as well as their overall banner, which brings improved visibility and conversions from Zomato users. • Food Delivery To begin with, through its food delivery business, Zomato charges a commission to the restaurants on the basis of orders. While users pay a delivery fee, Zomato earns through restaurants who pay a commission for each delivery, which is then split among the delivery partner and the company. Commissions from restaurants vary based on whether Zomato is fulfilling the delivery or whether the restaurant uses its own riders. This is said to contribute in a small way to the company’s total income due to huge competition and need for deep discounts etc.
- 15. • Subscription Programmes With Zomato Gold for consumers and users, and subscription solutions for restaurants, Zomato opened up a steady stream of revenue. While users pay a subscription fee to access the Zomato Gold loyalty programme which brings exclusive offers, restaurants also pay a monthly fee to be part of Zomato’s bouquet of offers. Restaurants also pay Zomato a monthly fee for miscellaneous services such as live tracking, Zomato-branded tamper-proof packaging and more. • Live Events With Zomaland, Zomato entered the branded live events market last year. Zomato charges users an entry fee to attend Zomaland, where besides food, they can witness live musical performances and other acts. In 2018, it had organised the entertainment carnival in Delhi, Pune, and Bengaluru, where Zomato claimed over 100K people showed up. This year, Zomaland is going to Pune, Delhi, Bangalore, Hyderabad, Mumbai, Jaipur, Pune, Chandigarh, and Kolkata. • White Label Access Zomato also enables services such as Zomato White label under which they give offers to the restaurants to develop a customized food delivery app. It also works with cloud kitchens and restaurants for consultancy services. Zomato works with select restaurant operators to help in identifying locations for expansions at a minimal fixed cost, but with increased options for the user. It provides the requisite licenses and operational enablement for such restaurant partners. • Zomato Kitchens In order to be able to provide kitchen infrastructure services to select restaurant operators, Zomato works with entrepreneurs to set up and operate Zomato Kitchens under different labels. This helps entrepreneurs fund restaurants in the right location with an investment of INR 35 Lakh and more. Zomato claims it offers returns in the range of INR 2 Lakh to INR 4 Lakh per month to the investors, with 180+ affiliate kitchens already up and running. As it has grown in size and scale, Zomato has tried to reduce the reliance on cash-burn reliant models and streamlined to enter enablement and other user-generated streams of revenue. Zomato’s cash burn is mostly in retaining users against its rival Swiggy. However, being in the line of fire for deep discounting practices, Zomato may soon be able to earn from other parts of its business model. Marketing strategies What makes Zomato the best
- 16. Target Audience Zomato targets people of the age group of 18-35 years who are comfortable using smartphones. The people of this age group are tech-savvy and can use mobile applications. The target audience of Zomato is of 2 categories. • Customers who want to dine out The customers in the “dine out” category use the Zomato app to check the ratings and reviews of various restaurants and cafes they are interested in. These are the kind of customers who want to make sure that they get a good experience in terms of food and ambiance and check the restaurant listings on Zomato before visiting. This category also gets incentives like Zomato Gold Program, where they get extra benefits if they have a membership. • Customers who are ordering food online The customers of the “order food online” category likes to have food delivered at their home or workplace. These customers do not prefer to go out. The customers of this category are mostly professionals who order food for the office, students who live in a hostel or flat, and people who just don’t wish to cook. Zomato has a mixed marketing strategy. It gets traffic from various channels and sources. These are the various sources of traffic that come to Zomato.com. 31.36% traffic from Directly 1.02% traffic from referrals 66.41% traffic from Searches 0.73% traffic from social media 0.47% traffic from mail and display ads SEO Strategy Zomato has a strong SEO strategy. We have already discussed that Zomato gets approx 66% of its traffic from searches made online. With their SEO efforts, they manage to get 99.44% of organic traffic from its search ratio whereas their paid searches are just 0.56%. This explains why they have a strong SEO strategy. Such an uprising metrics is because of the SEO strategy of Zomato.
- 17. Target Keywords Zomato targets over 900K keywords to rank high in search results. That’s why it is has a dominant position in search results. The keywords include restaurant names, dish names, and some phrases that relate to the user’s search query like “cafes near me” or “order online food,” etc. Pages on website Zomato allows restaurants to create and maintain their pages on its website. There are over 6500 registered restaurants on Zomato. That is why Zomato has over 54 million pages on its website. We know that the more pages a website creates, the higher it ranks on search engines, and that’s how it ranks at the top. URL linking We have heard of the SEO strategy to put keywords in URLs. It helps the search engine to understand your pages better and show it in the search result pages. Zomato understands this practice well and takes their top keywords to create URLs. It uses keywords like coffee near me, bars near me, and food near me. Internal Linking Zomato increases its domain authority by getting backlinks from 12,274,172 domains. It also gets high authority backlinks from gov and edu domains. By getting quality links, Zomato makes its SEO game stronger.
- 18. Social Media Strategy An app that targets the customers of the 18-35 age group, cannot miss social media marketing. Zomato understands that most of its target groups are active social media users. So, it focuses on creating social media ads and creates engaging posts to connect with the audience. 0.73% of Zomato’s traffic comes from social media. Zomato followers on different social media platforms are: Facebook- 1.8 million Instagram- 430K Twitter- 1.4 million Zomato understands what kind of posts will engage the users, hence it follows the meme marketing strategy for their social media. Even Zomato’s Instagram bio says “Meme page…occasionally posting brand posts due to business team pressure.”
- 19. Zomato creates ads for its existing to get more orders from them. For instance, look at this Facebook ad:
- 20. Zomato’s Paid Advertising Zomato runs Google ads to target specific customers. When a user searches for something Google displays organic search results along with paid ads. These are Google ads. Zomato targets both branded and non-branded keywords for Google ads. Furthermore, it targets keywords that are related to various dishes, online orders, restaurant names, etc. When a user searches for online food orders on Google, then Google displays paid ads from Zomato. Zomato gets approx 0.56% of its traffic from paid search ads. Zomato’s Email Marketing Strategy Zomato knows well how to utilize the Email Marketing tool optimally. Zomato’s Email marketing is one of the wittiest and compelling strategy. With compelling subject lines and a call to action, Zomato maintains its brand loyalty. In its recent email marketing campaign, Zomato created emails with the theme of Amazon Prime Video’s famous series Mirzapur season -2. Zomato included subject lines related to Mirzapur characters. “Munna Bhaiya invited you to a weekend” and “enjoy a weekend to guddu to be true” are some examples.
- 21. Also, one of its best email marketing strategies was when it created a resume for Biryani. Zomato included phrases related to food like “curryculum Vitae of Biryani,” Also it used the CTA “hire now” instead of using “order now.” That’s how Zomato does a phenomenal job with its Email Marketing Strategy. Zomato’s Visual Advertising Zomato comes up with some of the best visual adverts to connect the audience with their platform. Be it their video adverts or billboards, Zomato comes up with great content. Zomato post Covid-19 Zomato has recovered 75-80% of its pre-Covid sales. However, dining-in at restaurants is still at just 8-10%. Restaurants in Delhi NCR and Chennai are worst hit, with 88% and 91% respectively still closed for dining-in business, with the outlook for the industry looking bleaker. Out of the 83% restaurants that are not open for business, 10% restaurants have already shut down permanently and we anticipate an additional 30% restaurants to not reopen at all. Remaining 43% are closed right now but likely to open, as the situation becomes better. Zomato, which has 180,000 restaurants listed on the platform and nearly 27 million monthly active users. It has delivered 70 million orders and estimated that the overall food delivery industry would have done 200 million orders. Restaurants in residential areas were found to be doing 50% better than those in commercial areas and consumers are moving their spends from eating out to home delivery. The report also said that 1 in 5 customers in metros have now opened the Zomato app in smaller towns, underlining migration as most companies are expected to continue work-from-home policies for the coming months. Zomato has recently entered a strategic partnership with InCred, where the latter will extend credit facilities to the former’s restaurant partners. The food delivery industry was one of the worst-affected segments during the pandemic with its Gross Merchandize Value (GMV) falling short of the pre-COVID levels. However, we can now see a revival trend in the industry. The food delivery business has crossed pre – covid run rate and is expected to grow further in the months to come. The InCred-Zomato tie-up will extend financial assistance to cash-strapped businesses for meeting their business growth and working capital needs. Saurabh Jhalaria, CEO (SME Business), InCred said in a statement, “The COVID-19 outbreak has led to a sharp decrease in footfall, order volume, and bucket size within the food services segment. In this context, platforms such as Zomato have enabled physical businesses to recover seamlessly. We are happy to join hands with Zomato.” Co-founder Pankaj Chaddah has started a new venture with former Zomato executive Pooja
- 22. Khanna called Mindhouse, a mental wellness startup that offers users guided meditation sessions and techniques. Mindhouse started in December 2019 by offering guided meditation sessions at three physical studios in Gurugram. The company, however, shifted focus to an online model due to lockdown curbs last year. The mobile app provides meditation and yoga content through a mixture of live classes and an on-demand library of audio and video content. It also recommends content based on various goals chosen by the user like sleep, relaxed mind, patience, and focus among others along with their past experience in meditation. The company offers this service through various plans starting with Rs 499 for a monthly plan and going up to Rs 999 for a three-month plan and Rs 1,999 for a yearly plan. It also offers a free tier with access to limited features and content. Corporates will be one of the key focus areas for the startup, having already partnered with 500 companies in the past few months amid lockdown, Mindhouse co-founder Pooja Khanna told ET. Chaddah added that international expansion is also in the works, with the startup expecting to roll out its product to the rest of the world by the end of July 2020. The company currently employs 25 people in the country. Zomato’s COVID-19 related initiatives None of us could have ever imagined or planned for the world we are living in today. The world has come to a halt, and unfortunately, the restaurant industry that we are in, is one of the worst hit. It is in times like these when we really need to rise to the occasion and support each other to the best of our abilities. At Zomato, we are doing everything we can to support our community – our customers, delivery partners, restaurant partners, and the daily wage workers who have been impacted the most in these times. We have received an overwhelming support towards all the initiatives we have taken and we would like to thank everyone from the bottom of our heart for the courage and resilience they have shown to help out those in need. Your love and support keeps us going. Here’s a summary of everything that we are doing to support our community, and our own business at this time – For our customers Contactless Delivery – amidst the current lockdown situation in India, ensuring delivery of safe, hygienic food to our customers is paramount for us. To ensure this, we have launched contactless delivery. Customers can opt to allow the delivery partner to leave the package outside their home, ensuring no human-to-human interaction and hence lowering risk of any transmission.
- 23. Face masks – we believe that people should wear masks for the sake of others, if not for themselves. In that spirit, we have distributed and continue to distribute face masks to our delivery partners to keep them, as well as our customers, safe from the spread of an unlikely infection. We are also continuously educating our delivery partners on hygiene practices (not to touch face, nose, sneeze in elbow, etc.) to ensure their own as well as the ecosystem’s safety.
- 24. Disabling COD – for safety reasons, to avoid contact between our users and delivery partners, we’ve temporarily disabled the CoD (cash-on-delivery) option on our app. • Strict hygiene standards at restaurants – we are making a big push to ensure hygiene standards are being followed by restaurants and passing on that information to users so that they can make an informed decision and are assured of the safety and hygiene standards of the food. • Restaurants can issue a self-declaration on whether they are complying with best practices advised by WHO at their premises, to take precautions against the spread of Coronavirus. • Restaurants have set up hand washing & sanitisation stations and are ensuring that restaurant staff as well as delivery partners are using them regularly. • Restaurants are being encouraged to adopt the practice of sanitising their kitchen slabs and utensils at periodic intervals. • Restaurants are also checking the body temperature of restaurant staff as well as our delivery partners to ensure that food is not delivered by someone with a higher-than- normal body temperature. • Delivery partners are being asked to share a daily self-declaration on their hygiene and health – normal body temperature, sanitised masks and bags. We are also enforcing policies to ensure adherence to hygiene and health standards.
- 25. Grocery delivery – we have started grocery delivery in 80+ cities across India to help with the supply of essentials. Our delivery network in the country is only second to India Post, and we are putting in every effort to make sure that we put it to good use to serve the community. We’d like to thank the government authorities, grocery stores, FMCG companies & other start-ups that have come forward to partner with us and support the community in this endeavour. • Zomato Gold Extensions – as a small gesture from our end, we have decided to extend all paid Zomato Gold memberships by two months at zero cost. This will be valid across India, UAE, Australia, Indonesia, Philippines, Lebanon, Turkey, New Zealand, Portugal and Qatar. For our delivery partners • Rider Relief Fund – we have donated money to and are raising funds from the community for the Zomato Rider Relief Fund. This fund is supporting all our delivery partners whose earnings have dropped sharply in the midst of reduced demand for food delivery. • COVID Insurance – we have reassured our delivery partners that they don’t need to force themselves to work for financial reasons if they get infected with COVID-19. Zomato’s Delivery Partner Insurance Plan, which earlier covered only hospitalization, will now also cover lost earnings, in case the delivery partner gets infected by COVID-19.
- 26. For our restaurant partners and restaurant workers • Zomato Gold Support Fund – with the goal of helping out the restaurants that are finding it difficult to support their workers, we have launched the Zomato Gold Support Fund. Individual users can contribute to this cause by purchasing or renewing an annual gold membership. All proceeds from the Zomato Gold subscriptions in the month of April 2020 will go towards supporting restaurant workers in need and the users will get an additional year of Gold free, as a token of our gratitude. This has already been launched in India and UAE, and will be live in other markets over the next few days. • Takeaway – we are launching takeaway in Australia and Portugal, to support restaurants in the current situation and also help our users, with what is a need of the hour in these times. Our underprivileged community – India’s daily wage workers • Food Security – Zomato’s mission is ‘better food for more people’. And for some underserved segments of our country, ‘better food’ simply means being able to put some food on the table. • Feeding Foundation – Zomato runs a not-for-profit called the Feeding Foundation (in India, known as Feeding India). The purpose of Feeding Foundation is to leverage our relationship with the food industry, and our users to be able to provide food security to millions of people who run the risk of dying from hunger. In the middle of this chapter, we also started the Philippines chapter of the Feeding Foundation, called Feeding Philippines. • Feed the Daily Wager – about 450 million Indians depend on daily wages to run their household and have lost their livelihoods due to the lockdown. All these people are going hungry and they desperately need someone’s support. To help with the situation, we started the “Feed the Daily Wager” initiative in India, wherein we are distributing ration kits to daily wager communities. These ration kits provide 100 meals to a family (three meals a day for a family of five, for a week). • This initiative is powered by people like you – we have been able to raise ₹25 crores for this from individuals and corporates, and are aiming to double the amount. If you haven’t already done so, please donate towards feeding our daily wagers at http://www.feedingindia.org/donate; countless drops fill an ocean – please add yours. • We have already distributed more than 100,000 ration kits (to the same number of daily wager families) in more than 20 cities as of now. Apart from our mega cities, we have now also started distributing these ration kits in other cities like Patna, Jhansi, Guwahati, Dehradun etc. • We plan to distribute 1M ration kits as part of this initiative, and have already secured supplies to do that.
- 27. • Working for Feeding India is incredibly humbling. Here are some images and conversations that will move you. For people who are directly affected by COVID-19 • Food for quarantine facilities – as an essential service provider, it is important we find more than just a few ways to help our community fight against this pandemic. We have teamed up with Apollo Hospitals to deliver food to those who are in isolation wards, in their quarantine facilities. We are currently doing this in Bangalore and Hyderabad, and are expanding this support to hospitals/quarantine facilities across major cities. Zomato vs Swiggy Why do some people only choose Zomato or Swiggy over another? About Swiggy Swiggy is a food ordering and delivery platform in India. The foodtech unicorn started operations in 2014 in Bengaluru, and acts as a bridge between customers and restaurants. It utilised a technology platform that allows customers to order food from nearby restaurants and get it delivered to their doorstep. It was founded by Sriharsha Majety, Nandan Reddy (Co-founder) and Rahul Jamini (Co-founder) with a business model B2C and B2B. It is
- 28. known as India’s fastest unicorn. From being late entrant in the online food ordering space in 2014, Swiggy has galloped its way to billion-dollar valuation in four years forcing other food tech companies to play catch up. How Swiggy app works and earns • Users sign up for Swiggy mobile app and become customers • Customers open the app, select the restaurant, and order the food • The app confirms the delivery location • The restaurant receives the order and confirms it • Local delivery boy confirms the pick-up and drop location of the order • Customers receive the notification showcasing the confirmation of the order and the person who will deliver the order • Customers track the entire journey from mobile app starting from the order confirmation to the moment order gets delivered. They can also track the delivery boy’s location. • Swiggy marks your ordered completed, once delivered After the order completion, Swiggy app asks customer’s reviews and ratings on food, taste, and delivery service. Swiggy’s idea to connect local foodies with local restaurants gave the brand advantage of an early mover. But the brand relies on restaurants and local delivery personnel to grow the business. And the company has to pay incentives to local delivery boys to keep the business going. So Swiggy’s revenue stream comes from different, multiple sources. Here they are: Commissions Swiggy charges 15-25% commission on total order bill (inclusive of Goods and Service Tax) from restaurants. The percentage of the commission depends on various factors like the number of orders, location of the restaurant, the commission charged by competitors, etc. Delivery Charges Swiggy doesn’t follow any minimum order model. It can deliver food for even less than Rs.100/- only. Instead of being a hurdle, it’s the most significant advantage for Swiggy as the app often receives an order value of less than Rs. 100/- for which Swiggy applies delivery charges. Delivery charges rotate around Rs.10-20/- for orders less than Rs.250/-. Swiggy increases its delivery charges in times of high demand, rains, special occasions, or midnight delivery. If
- 29. customers need emergency food at midnight, they have to pay a little bit higher, or customers prefer to order on time to avoid paying high. Either way, Swiggy wins. Advertising Swiggy follows two advertising revenue models simultaneously: Banner Promotions and Priority Restaurant listing. Swiggy started displaying and promoting banners of available restaurants based on regions and rates. Swiggy charges premium from restaurants in exchange for displaying their banners in its app. Affiliate Income Swiggy offers credit cards as well from where it generates income as an affiliate. The food- service brand has partnered financial biggies, including American Express, Citibank, ICICI Bank, HSBC, etc. Other Income Sources Swiggy keeps expanding its revenue sources along with its growth. It has started Swiggy Access allowing restaurants to set up kitchens at locations where they can’t reach. For this, restaurants pay higher than average commissions. Swiggy added another source via Swiggy Super, a membership program for regular customers. It offers unlimited free delivery for orders above Rs. 99/-. Zomato and Swiggy The comparison between two top most food delivery companies in India. Zomato’s business point is unique and different in relation to Swiggy. If we take a gander at Zomato, it centres around food alone. Whether we want to know what is a decent food restaurant to visit or want to order food online, or review food, we go to Zomato. Where on the other side, Swiggy centres around their delivery ecosystem. They’re currently exploring new fields into delivering groceries, medicines, anything etc.
- 30. Login page Swiggy - Before even joining and signing in customers are indicated offers and coupons, with the goal that it produces interest and individuals, regardless of whether weren’t anticipating exploring the application, Sign In. It also has a feedback option below Offers. Swiggy gives you an option to give feedback, before the login. Zomato - Zomato goes for simplicity, provides options for login, i.e., via Facebook, Google or Email. Account Both Swiggy and Zomato’s account page serves almost the same thing. The account page lets you manage your address, check how much balance do you have in your wallet, etc. Swiggy - Swiggy has designed its account page to be less intuitive. On the account page, when you scroll you don’t see any important factor, there’s insights on your past orders, and as opposed to looking over additional, you want to go to different pages and all things considered check food instead. Zomato - Zomato’s account page is very engaging. It even has a profile of the user. People can maintain their profile page, where they can write reviews about restaurants, add photographs. One can follow fellow foodie companions. Eating and updating reviews adds up to the stats, where one review can get you 25 points and from just being a foodie, you can upgrade yourself to become connoisseur, sharing it with your community. Home screen Swiggy - As you scroll down on the Swiggy’s home screen page, there are many repetitive features and categories, even old promo cards, which hinders the food search process. Zomato - Zomato’s home screen has more contrast and is exceptionally captivating. Zomato Pro advertisements and promotions, are all over the places Food display Swiggy - Food restaurants displayed are simple and easy to work with. At one point the scrolling stops and ends up with 'LIVE FOR FOOD' quote. Zomato – It advertises and takes up a lot of space to display the food places available. The users at one point will get tired of scrolling and may or may not settle with any restaurant. Zomato has endless scrolling.
- 31. Search Swiggy - There is a separate page just for the search, which makes the process of searching for any item easier and clutter free. They’ve put smart use of restaurants, users probably might reorder from. The recent search option is helpful. Zomato - The search bar is available on top of the home screen. By placing images and few options does have a clickbait which would want the users to click on a type of cuisine, even if they aren’t looking for anything specific. Cart/Payment Swiggy - It’s Go to Cart is simple and snappy as there’s a different cart page for the users to visit. At the point when customers order something they get notified below with a green pop up of what they’ve recently added so that they can check out quickly. But for payment there’s a process. Zomato - It doesn’t have a cart page or any alternate. When one orders something there’s no visible pop message below for the order. People can be puzzled while searching for the cart. It is that there, when you have to double click to reach to the cart page. But the payment system is easy and quick. Location & Delivery Swiggy and Zomato both auto detects your location. You can anyhow separately add the location yourself. Swiggy’s delivery system is faster by 5 minutes. But Zomato gives amazing offers and discounts. Their marketing strategies, no doubt stands out. Conclusion of comparison The food delivery industry has emerged as one of the biggest online platforms specially in lockdown. The shape of the market is changing with a breakneck speed with food tech companies like Swiggy, Zomato and many more. As the decade draws to a close we have started to see some signs of consolidation in a market which has undergone several shifts in terms of strategies and operating procedures. The decade certainly belonged to the two top start-ups in the space Swiggy and Zomato. They are both great in their own specific manner. Where Zomato’s speciality is marketing and offers concocting these insane ideas online competitions, promo ads and games for their users to be involved in and win amazing cash back prices, Swiggy doesn’t hold back either with their efficient user experience. Both the companies keep on updating their apps and never fail to amaze the customers. The answer to How people choose Zomato or Swiggy is simple.
- 32. Preference. Some people prefer fast service and hate to wait they usually go for Swiggy not minding the pries. But people who want to try different options, want discounts and cashbacks go for Zomato. Some people use both the apps. Whichever is suitable. They switch app if can’t find a restaurant or a good offer in one. SUGGESTIONS FOR IMPROVEMENT How Zomato fails and what can the company do to improve. Customer satisfaction Customer service is satisfactory but from the start till now few customers face problems which aren’t heard or solved by the company. Zomato should focus a little more on customer service as this problem can lead to bad reputation and company can go downhill. Application As much as the app is user friendly it creates problems too which isn’t being solved even after many complaints. The app usually fails to detect the customers exact location also sometimes give wrong or long routes to the delivery guys which creates problem and delays the order. Company updates the app on discounts and offers and invests too much in marketing but is ignoring such important problems. They should fix this problem so that it becomes easy for delivery guys to find and reach the location easy and early. False rating There have been reports of false rating. Reports being true or not even if a rumour its definitely hurting the image of the company. Zomato should take some action to solve this problem as building a goodwill takes years but it takes no time to ruin.
- 33. Packaging Well, the packaging is mostly done by the restaurants but if anything goes wrong with the packaging the blame straight goes on Zomato. To avoid that company should take extra measures with packaging as no customer would want to eat a carelessly packaged food. Employees When I say Zomato needs to improve employee wise everyone starting from executives to the delivery men all need to be more customer friendly and better at their job. Executives are rude to the customers and some delivery guys are too unaware of the locations and need to be directed by customers many times. It makes inconvenient for customers and they would rather choose different app rather than taking all the pain. CONCLUSION If we go by numbers, Zomato witnessed a record rise of 225% in its revenue in the very first half of FY2020. The company’s biannual report revealed that it had registered $205 Mn in revenue as compared to $63 Mn (in the first half) of last year. Zomato’s journey thus far has witnessed crests and troughs of its own. But it wouldn’t be wrong to say that ups and downs are faced by almost all startup companies in their initial years. What really matters, in the end, is their resilience, their will to stand by the organization and its values and the decisions they make in difficult situations. As for the founders, Deepindar and Pankaj, they’ve done a phenomenal job of keeping Zomato afloat even in times of crisis. Where in early 2018, Pankaj announced that he’d like to quit Zomato and take some time off before he turned “professionally active” again, he continues to hold a stake of 3.11% in the organization. Today, the company is looking forward to raising more funds with a vision to expand its service portfolio. It aims to reach newer markets and explore other related domains of growth. As Zomato battles it out with Swiggy - its biggest competitor, it will be interesting to see what lies ahead for this organization especially in a time when bigger players are entering the market.