The founder of Zomato in 2008 , Deepinder Goyal and Pankaj Chadha got idea of Zomato company, former IIT student.

BUSINESS MODEL OF ZOMATO COMPANY – CASE STUDY

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Introduction  –

The revolution of the computer and after that the revolution of the internet, people were watching at the same time.  Android mobile changed the whole world and internet- mobile handset it gave a new perspective to service sector to do business and seeing service sector a big form of business sectors.

It is said that India is considered to have a very good future to grow in the hotel business, if both the family members are job seekers, then hotel business is considered to have a very good future. Zomato brought this concept of home delivery in the hotel business by doing a little innovation in the food business. Which is why the investors of Zomato are very optimistic, so we have put this topic in front of you.

Zomato has never made a profit long time ever since it was started, but still, here we will analyze how its IPO became the most successful IPO in the stock market till date. The entire hotel sector on the one hand and the Zomato company on the other hand has become the value of the Zomato company unique, we will talk about it in detail.

What is the business overview of Zomato?

After the revolution of the internet and mobile, the usage of android mobile has increased a lot in India after 2017 and the business of providing services through mobile apps has been very influential. One of them is the food delivery business which has started selling food during the corona pandemic. The importance of home delivery for things has increased.

With the increasing influence of information and technology, the era of production companies has fallen behind. The model of doing business in the service sector has become very popular because it does not require a  big investment to start like first production and production process business. For this a lot of money has to be invested.

This is a very light model of doing business like online,  car services business like Ola Uber was very famous in the same ideas this food delivery business has great potential in its growth in India so it is considered as a successful business model of the future.The food and hotel business has potential in Indian market in future.

Success Story of Zomato –

The founder of Zomato in 2008 , Deepinder Goyal and Pankaj Chadha got idea of Zomato company, both former IIT Delhi students, were working at Bain & Company in Delhi. When they used to see the customers every day while waiting to pick up the menu cards and orders at the hotel at lunch time. They got the idea that it is possible that we can get the order for lunch sitting in the office online. And this was the birth of Zomato’s business model, which was initially named “Foodibay” and was changed to Zomato in 2010.

That’s when he created a website and made the facility of ordering online with all the menus of the hotel for all the people of the office. Slowly this idea became so popular that it added more customers to the hotel business of Delhi. Today we can see  that it has become a successful business providing the most successful food order services in India.

Initially this business model was named Foodibe, which later became the global business, which was named today’s famous Zomato. The market value of the entire hotel business on the one hand and the market value of Zomato on the one hand, such a big business brand, is known today as Zomato.

SWIGGY VS ZOMATOComparative Analysis of Zomato and Swiggy  –

Although many companies work in the food delivery market, but mainly in India, these two companies are considered to be the largest and main companies. In which Swiggy runs its business every month with 14 million customers and Zomato with almost 11 million customers. After which Rest of the companies keep their market share, which is much less than these two companies.

The most important reason for differentiating these two companies from other companies is the money invested to attract the customer. The quality of service and the reasonable rates is the success formula. The important reason for the success of both is its application which is very easy to run and user friendly due to which customers are attracted.

The company’s logo is very important in the success of this company, for which looking at the logo and its color of both these companies. Then it is understood that both of them have done a lot of work on the logo, which is very important in making the company a successful brand.

Business Model of Zomato  –

There are three ways Zomato makes money that have made it such a successful business model and it has great potential to grow in the future.

  • food delivery business
  • Advertisement Services
  • Business Consultancy Services

From the beginning, the aim of the founder of Zomato has been more to set up the business and earn profit. There have been 5 million, which no one would have ever imagined so many customers in the hotel business. But this business model has made it possible and everyone knows that it is going to increase significantly in the future.

Therefore, before the IPO of Zomato in the stock market, there has not been any good performance in the market, but still, Zomato has been successful in garnering much more share capital than Zomato had imagined.

Investors of Zomato  –

Info-Edge is considered to be the largest investor company of Zomato, whose head Sanjeev Bikhchandani was very impressed by this business model. They invested one million US dollars in this business in the beginning of 2010, which later increased to 4.5 million and the very next year. Today we can see that InfoEdge holds more than 50% stake in Zomato.

Many other capital finance institutions have invested in this, so this business model has not been able to give any special performance yet. But knowing all the business people have been very optimistic about this business model and in future this business is going to give a lot of benefits in India.

We have to know the success of Jio Company to know the success of this business model where Jio Company  was working only on business set up in the initial days. So earning profit was not the initial objective, but today we can see that Jio’s telecom model is the best in the market. As a big profit making brand, the business model of Zomato has made it India’s number one brand in food delivery services and now it is starting to become a profit making product.

Success Formula of Zomato –

  • Home delivery of food in the most efficient time and at the right price
  • To make food delivery, keeping a team of delivery boys ready by paying good prices.
  • In which area, which food is served, there are many such important data, this is the best success plus point of Zomato.
  • Investing companies and organizations have been instrumental in setting up Zomato, which has led to considerable success in the branding and expansion of the company.
  • Zomato does not only do food delivery, it promotes hotel to increase hotel business, from which Zomato earns a lot of money.
  • Zomato also works as a business consultant because they have a lot of business experts working in their business chain to make profits through consultancy to the hotels doing business.
  • Branding of Zomato has been the biggest factor in its success and we can see from the success of its IPO.
  • Earlier, the entire hotel business of India had a winning market value, today Zomato’s business has become yours.

Lockdown in Corona Pandemic and Zomato  –

When the entire economy was completely closed for the whole year due to the lockdown of  covid-19. But the Zomato  business model came into the limelight and everyone felt the need and it was time for the growth of food delivery services like Zomato.

Although there are many competitive companies in the market like Swiggy, but with its aggressive strategy, Zomato has increased its business in the market all over India during this period, Because most of the people understood the importance of this home delivery service due to the lockdown.

That’s why in today’s era, the problem solving business model is going on a lot success, which businessman like Elon Musk is promoting the problem solving business model and this business has been very successful in adverse situation like Pandemic. So this time has been very important in the success of Zomato, in which how in crisis It teaches us to solve the problem.

STOCK MARKET IPO of Zomato

Thirteen years after Zomato, Zomato’s IPO landed in the Indian stock market, which has been one of the most successful IPOs in India’s IPO history. Which has made Zomato a 9375 crore rupees company from the Indian stock market, which in itself is a great achievement  for Zomato Company.

Although there are many companies in the food delivery market in the Indian market, the main competition of Zomato has been Swiggy. Which is a very big company. But still, the stock of Zomato company has made the value of Zomato equal to the entire hotel industry in the initial phase. For which many experts believe that it is an overvaluation of Zomato and such a value should not be of apps like Zomato.

Swiggy has 14 million food orders online every month, while Zomato has the same figure 10. 5 million ha, which are considered to be both market giants in the food delivery. Followed by many companies like Foodpanda, Uber Eats, but both of these companies have established dominance.

Zomato & Zomaland Carnival –

Zomato started organizing big event company from 2018 onwards by bringing all the food lovers and other food lovers who are celebrities or professionals on one platform. Which has got a lot of good response from cities like Delhi Bangalore, Mumbai. Due to which the company has started its business brand. A lot of effort has been made to increase it.

Many big brands came forward for this event, who contributed a lot to run it. Which has many important brands like Singapore Tourism Board, which has helped the company to get a lot of customers and for branding.

Challenges faced by Zomato –

The worst phase of Zomato was in 2015 where it was running at a constant loss as more money was going to add to the customers. So the company started laying off its employees in a big way at that time.

Due to which the company emerged later and re-emerged itself with good management and problem solving ability. Due to which the company had to face a lot of difficulty in spreading such a large network in the initial days. But for this also the management took the solution and today We see that a good future business model and a good investment is seen in the stock market.

Conclusion –

In this way, we tried to know about the business model of Zomato, in which we have tried to know how it started and how this business model became successful. We tried to know about the founder of Zomato here and how we recommend him for this business idea.

Here we have tried to know how Zomato runs its business model successfully. And we have seen which are the competing companies of Zomato in the market and how they run their business. Here we have tried to find out from the analysis how Zomato gets funding and how its IPO has been so successful in the stock market. Our aim here is how business ideas make their business successful, for this we try to know about the different companies in case studies.

By which we try to know what strategy we should keep in our business and make our business successful. According to the 2019 data, Zomato serves its services in 24 countries and 10000 cities all over the world, which can become an inspiration for new budding business entrepreneurs.

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