More Than Just Food Delivery: Unveiling Zomato's Diverse Business Verticals

 

Zomato: A Culinary Colossus and its Recipe for the Future

Zomato, the name synonymous with online food discovery and delivery, has carved a niche in the Indian and international food tech landscape. From its humble beginnings in 2008, the company has evolved into a multi-faceted platform, constantly innovating and expanding its reach. Let's delve into the world of Zomato, exploring its current business, future vision, strategic acquisitions, and diverse business verticals.

The Foodiebay Experiment (2008):

The story starts in 2008 with two Bain & Company consultants, Deepinder Goyal and Pankaj Chaddah. Frustrated by the lack of readily available restaurant menus, they embarked on a mission to create a solution. Thus, Foodiebay, the first iteration of Zomato, was born. It aimed to be a comprehensive online directory listing menus and restaurant information.

Challenges and Early Traction:

The initial years were far from easy. The Internet and smartphone penetration in India was low, making online food discovery a novel concept. Foodiebay relied on manual data entry, a daunting task for the limited team. Yet, they persevered, building a loyal user base who appreciated the convenience of having menus at their fingertips.

The Zomato Rebranding (2010):

Recognizing the limitations of the "Foodiebay" name, the company rebranded as Zomato in 2010. This marked a shift towards a more user-friendly and tech-driven approach. Zomato actively partnered with restaurants, expanded its city coverage, and embraced user reviews and ratings. These features transformed Zomato into a platform for not just discovering restaurants, but also for making informed dining choices.

From Listing to Delivery (2014-2015):

As the smartphone revolution took hold in India, Zomato capitalized on the opportunity. Around 2014-2015, the company ventured into online food delivery, initially collaborating with existing delivery services. This marked a turning point, transforming Zomato from a discovery platform to a complete food ordering solution.

The Legacy of Zomato's Early Days:

Zomato's early days were a testament to the power of innovation and adaptability. They identified a gap in the market, tackled challenges head-on, and pivoted their strategy as technology evolved. The foundation laid in these formative years has propelled Zomato to become the food tech giant it is today.

The Zomato Ecosystem: A One-Stop Shop for Foodies

Zomato's core business revolves around connecting food lovers with their favorite restaurants. Its user-friendly app and website allow users to browse menus, discover new eateries, read reviews, and place online orders for delivery or takeaway. Additionally, Zomato Pro offers a subscription service with exclusive benefits like discounts and free delivery.

Beyond Delivery: Zomato's Expanding Horizons

Zomato's vision extends beyond just food delivery. The company aims to be a one-stop shop for all things food, venturing into new verticals like:

• Zomato Gold: A loyalty program offering dining-in benefits at partner restaurants.
• Zomato Market: An online grocery delivery service, acquired through the Blinkit acquisition.
• Zomato Heath: A curated platform for healthy and sustainable food options.

The Blinkit Acquisition: A Strategic Leap

Zomato's acquisition of Blinkit, a quick commerce platform, for US$568 million in 2022 marked a significant step towards its vision. This strategic move allows Zomato to offer instant delivery of groceries and other essentials, catering to the growing demand for convenience and speed.

What is Zomato Hyperpure?

Zomato Hyperpure is a game-changer for Zomato, venturing beyond just food delivery and stepping into the B2B (business-to-business) space. Here's a breakdown of what Hyperpure is and how it's impacting the food industry:

• Launched in 2018, Hyperpure is a one-stop shop for restaurant supplies, catering specifically to the HoReCa (Hotels, Restaurants, and Caterers) industry.
• It functions as a B2B platform through a mobile app, allowing restaurants to order a wide range of supplies directly from Hyperpure.

Hyperpure has witnessed impressive growth, doubling its revenue year-over-year. This indicates a strong demand for its services within the Indian restaurant industry. It positions Zomato as a strategic partner for restaurants, not just a delivery platform. Hyperpure's farm-to-fork model ensures fresh ingredients and potentially contributes to a more sustainable food supply chain. 

Overall, Zomato Hyperpure is a strategic move for Zomato, creating a new revenue stream and solidifying its position within the food industry.

A Different Side of Zomato: Feeding India

Started in 2014 by Ankit Kawatra, Feeding India is a nonprofit organization that serves free meals to underprivileged people with the help of volunteers. Feeding India was acquired by Zomato in July 2019. In May 2022, Zomato claimed that Feeding India was serving over 200,000 meals every day under its Daily Feeding Program.

In December 2022, Post Malone headlined Zomato Feeding India's benefit concert to raise awareness about malnutrition in India.

Valuation: A widely discussed topic

Zomato's valuation and expansion targets are a hot topic with analysts offering varying opinions. Here's a quick rundown:

• Zomato's stock has seen significant growth in 2024.
• Morgan Stanley believes Zomato's strong growth outlook justifies its premium valuation, raising its target price to 44 times FY27 EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization).
• Goldman Sachs also recently raised Zomato's target price, reflecting confidence in the company's ability to capitalize on growth opportunities.

The Future of Zomato: Innovation and Sustainability

Zomato is constantly innovating, leveraging technology to personalize user experiences, optimize delivery processes, and implement sustainable practices. The company is committed to reducing its environmental footprint and supporting ethical sourcing practices within the food industry.

Conclusion: A Culinary Journey with Zomato

Zomato's journey is a testament to its ability to adapt, innovate, and cater to the evolving needs of the food industry and its customers. With its diverse business verticals and strategic acquisitions, Zomato is well-positioned to continue its reign as a culinary leader (holds almost 60% of the Indian market in their field) in the years to come. As the company continues to explore new avenues and refine its offerings, one thing remains certain: Zomato's commitment to connecting people with great food experiences is a recipe for continued success.