Zomato Reasons of Success: How it Captured Food Industry in India

The food industry in India has always been an ever-growing sector. Similarly, looking to this advantage so many food-tech companies stepped up and gave amazing products and services to customers at a highly reasonable rate. Zomato is one of those Indian food-tech companies which happens to be India’s very first food-tech unicorn.

For those who have no idea what Zomato is then, you must know that it is an Indian multinational restaurant aggregator and food delivery company. It’s quite amusing that such an amazing and one of the greatest food-delivery companies in our country has been existing since 2008.

Yes, they have been operating successfully in the Indian market even before Swiggy another food-tech giant entered the Indian market.

Initially, Zomato provided information regarding restaurants, prices, and menu items they offered. They were not into the food-delivery sector at the beginning but, it was in 2015 when they entered into the food-delivery industry and that changed the whole face of the company. It was then that the company recognized a huge demand for convenient meal delivery services in India.

Looking at this great opportunity Zomato immediately launched its food delivery vertical. The easy and convenient interface of Zomato helped customers to order food from their favourite restaurants just with a few taps on their smartphones.

Using different and unique marketing strategies Zomato left all of its competitors behind and is now at the top. One of the famous marketing strategies used by Zomato to retain and gain customer attraction is through referral programs and loyalty rewards.

It has always incentivized user engagement and fostered customer loyalty. Offering discounts, cashbacks, incentives, referrals, and others have made the company one of the best players in the market.

Today, this company is considered to be the top food-tech company in India. According to some reports, Zomato’s Indian market share was 54% compared to Swiggy’s 46% in the food delivery space as of H1 2023.

Origins of Zomato Founders

Deepinder Goyal and Pankaj Chaddah are the masterminds behind Zomato and what position it has gained today in the world market. Deepinder Goyal is the co-founder and CEO of Zomato, he was born on 26th January 1983 in Punjab, India and is currently 41 years old. On the other hand, Pankaj Chaddah is a co-founder of Zomato who was born on 23rd December 1985 in Gurgaon, Haryana, India.

These guys met at IIT Delhi and became friends from there itself. It was in 2008 when both Deepinder and Pankaj worked for Bain & Company, decided to solve a very common problem which was the lack of a reliant restaurant guide in India.

Looking into this problem, both friends came out with a platform which was Zomato. Yes, the initial name of this platform was something else and that was ‘Foodiebay’. This company started as a very humble restaurant discovery and information-getting platform for customers who were looking for the best. This platform surely did not operate covering a major area but, it covered most parts of Delhi-NCR.

Initially, both the founders faced lots of challenges but, building a user-friendly app along with the best and top information regarding restaurants was the top priority of both the founders.

They simply focused on their goal and did everything to achieve those and it navigated their challenges with determination. They started involving more restaurants, reviews, and menu lists to their platform so that customers can get the best of it.

After two years in business, the name Foodiebay was changed to Zomato. It was the name derived from the vegetable ‘tomato’ which symbolizes freshness and variety of food. But, until 2014 Zomato followed the same business but, a lot changed in 2015.

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Growth and Evolution of Zomato

Soon after the founders changed the name from Foodiebay to Zomato, they marked a significant beginning. It was in 2010 when Zomato received its first and huge funding from an investor and made itself into the unicorn list.

The first seeding fund worth Rs 147 crore came from Naukri-parent InfoEdge. Yes, they received their first funding from this company after two years of bootstrapping the venture.

Interestingly, this was not the end for both Zomato and InfoEdge. InfoEdge again invested $3 million in September 2011, $2.3 million in September 2012, and a whopping $10 million in February 2013.

InfoEdge being one of the earliest backers of Zomato helped the food-delivery company to skyrocket its sales by more than 1000 times. Yes, companies like Sequoia Capital, Vy Capital, Temasek, Abu Dhabi Investments, and many more did play a major part in boosting the company’s sales and value.

At the same time, after changing its name to Zomato and entering into the food-delivery industry the company became quite famous. Not only did they offer more menu lists and reviews to customers but, entered into the food-delivery industry as well.

They found the huge demand for the food delivery sector in India and took the opportunity. It slowly evolved as one of the top food-tech ecosystems in India. Ordering food, getting reviews, menu lists, and table reservations became much easier using Zomato’s platform. Yes, table reservations which were only done through phone calls to the visiting restaurant were not possible with Zomato’s app.

Reasons Behind Success of Zomato

Zomato always thought differently as compared to other players in the market. It is because of that, this company is where it should be in the Indian market which is at the top. But, small contributions towards change helped the company achieve such huge success and milestones today.

One of the key factors behind Zomato’s huge success is offering and maintaining user-friendly app and website design for easy usage and exploration. People who searched for the best restaurants locally preferred to choose Zomato only because of its easy and user-friendly interface.

It provided almost everything that a user would require to search for the best restaurant. On the other hand, the website designed by Zomato was also very easy to use and navigate.

Another reason behind Zomato’s success is providing a wide variety of restaurants and cuisines on their platforms. After gaining huge funds and ultimately success, Zomato registered more restaurants on their platforms which are on the app and website.

This helped the company to penetrate through unknown yet good restaurants and get all of their menu listed in their app and website. People who used to locally visit those restaurants now get the chance to get their favourite food delivered to their homes.

Side-by-side Zomato also made strategic partnerships with restaurants and other brands for better success. Very recently, Zomato established a strategic partnership with some of the top fast-food and beverage companies like KFC and PepsiCo.

Partnering with such huge companies in the world has allowed Zomato to expand its offerings and attract more customers. Yes, when they were busy doing this, the company never compromised on customer reviews and ratings for a particular restaurant and a particular food.

Zomato always offered a review of every restaurant that was registered. People who ordered using their app or website got to know which are the best restaurants offering the best food items near to them. It allowed users to try food products which they never tried before and increased sales not only for the restaurants but, for Zomato as well.

Zomato’s Impact on Food Sector

Zomato has had a major impact on the whole food-tech and food-delivery industry in India. Only because of their continuous innovation of both products and services has helped the company to be the best food-tech and food-delivery company in India today.

This is why Zomato is highly known for its innovative use of technology in both products and services in the food delivery industry in India and around the world.

Initially, the idea of Zomato was the help Indians discover the best restaurants offering the best food in their locality. But today, Zomato has changed the whole face of the food-delivery industry within a decade in the Indian market.

In some ways, Zomato has also had a great impact on the way how people eat. It started offering food products which are health-curated by making a different section of it. Other than that, it also mentioned how many calories and other nutrients you would be taking after consuming a particular meal.

Doing this not only helped people discover new food items but, they got information about the nutrients and calories present inside a food item. Interestingly, Zomato is not only helping users through its information in India but, in other foreign countries as well.

Zomato first launched its services in Chile and Portugal back in 2014. After the food-tech company saw huge success in these countries they soon launched their services in Canada, Lebanon, and Ireland back in 2015.

It was the same year, when Zomato entered into the food-delivery industry in India. So, this proves even before entering into the food-delivery market, the company was already doing amazing in its previous services.

Interestingly, it was in 2015 when Zomato acquired Seattle-based restaurant discovery portal, Urbanspoon. It might be their first acquisition but, this acquisition helped the company to widespread its service through the United States of America and Australia as well.

When Zomato started offering food services to customers after offering detailed reviews and ratings of the restaurants which were present locally, they put a great impact on the food delivery industry as well. More and more people started ordering food to their homes using Zomato and this resulted to increase in delivery in our country.

Zomato was bound to hire more delivery partners in our country to serve so many orders in our country. According to some sources, Zomato today has more than 3.5 lakh delivery partners working in India. We are quite sure that, Zomato will create more job opportunities in the coming future looking at the success rate it is going now.

Zomato’s IPO was finalized on July 22, 2021. Their shares were listed on BSE and NSE on July 23, 2021. On the other hand, Zomato’s IPO price band is set at Rs 72 to Rs 76 per share.

Conclusion

Zomato is surely one of the best things that happened in India. The 54% market share acquired by Zomato is not only helping the company earn profit but, it’s helping awareness and knowledge regarding the best food and restaurants to users.

On the other hand, the easy and convenient interface of its app and website has helped both the company and customers to get the best products. It has also created huge job opportunities in the Indian market, contributing a lot to India’s economy.

We are sure Zomato will continue to achieve huge success and milestones in the future through its unique strategies, partnerships, and acquisitions in the world.