Zomato Overview: Key Facts and Business Strengths

What is Zomato?
Zomato is an Indian food delivery and restaurant discovery company. It started as an online restaurant directory and now serves over 24 countries. In 2021, it raised ₹9,375 crore through an IPO. Zomato leads India’s food delivery market with 55% share and over 80 million monthly users.

Zomato began in India as a simple online restaurant directory. Over time, it expanded into a global food delivery company. Today, Zomato operates in over 24 countries and more than 1,000 cities.

The name “Zomato” was inspired by the word “Tomato.” In July 2021, the company launched one of the largest IPOs in India’s startup history. It raised ₹9,375 crore (around $12 billion) with a share price of ₹76.

Zomato’s Key Strengths

1. Leading Global Food Delivery Platform
Zomato is one of the world’s top online food delivery platforms. In 2023, it had over 80 million monthly active users and more than 90 billion visits across its digital platforms.

It processed 647 million food delivery orders from 58 million Indian users. The total value of these orders was ₹263.1 billion. The platform had 210,000 active restaurant partners and 326,000 active delivery partners each month.

2. Strong Market Position in India
Zomato holds about 55% of the Indian food delivery market, making it a leader. Swiggy is its closest competitor. This share has grown from earlier years when both companies had an equal 50% share.

3. Steady Business Growth
Zomato’s gross order value (GOV) increased by 24% in FY2023 to ₹263.1 billion. Total orders rose by 21% year-over-year, and monthly active customers reached 17 million, a 16% increase.

4. Effective Marketing Strategy
Zomato uses a mix of digital and offline marketing to reach users. It spent ₹12.3 billion on marketing in FY23, helping it grow its customer base. This approach brought 17 million monthly users and 1.8 million Zomato Gold members.

5. Focus on Digital Payments and Technology
Zomato entered the digital payments space with RBI approval for Zomato Payments Private Limited to act as a payment aggregator. The company also uses AI to deliver personalized food recommendations and improve customer experience.

6. Fundraising Ability
Zomato has raised $1.79 billion through 18 funding rounds. Key investors include Temasek, Kora, and Tiger Global. The successful IPO in 2021 added to its financial strength. It currently has 28 institutional and 19 angel investors.

7. International Operations
Zomato exited some global markets like Canada, the US, and the UK. But it still operates in Indonesia, Sri Lanka, and the UAE. These regions help the company reach a broader audience and reduce reliance on the Indian market.

8. Acquisitions and Partnerships
Zomato has made several acquisitions to support growth. It bought Uber Eats India for ₹2,485 crore and Blinkit for ₹4,447 crore. It also invested in startups like Grofers, Shiprocket, Magicpin, and Curefit. The total value of these deals is around $1.2 billion.

Zomato’s Weaknesses

1. Financial Losses
Zomato posted a net loss of ₹7.8 billion in FY23. Though this was an improvement from ₹12.23 billion in FY22, the business still operates at a loss.

2. Strategic Missteps
The company has made decisions that hurt its reputation and finances. Its dine-in discount program caused over 1,200 restaurants to exit the platform. Past attempts to enter alcohol and grocery delivery also failed.

3. Management Turnover
In 2020, co-founder Pankaj Chaddah left the company, triggering leadership changes and concerns about internal stability.

4. Shrinking Global Presence
Zomato exited multiple countries, limiting its ability to grow internationally. It now relies heavily on the Indian market, which adds risk during local economic slowdowns.

5. Operational Issues
Delivery delays, food quality complaints, and other logistics issues continue to affect Zomato’s customer service. These problems have increased the company’s marketing expenses in an effort to retain users.

Zomato’s Growth Opportunities

1. Expanding Food Delivery Market
The global food delivery market is projected to reach $110 billion by 2025. India’s segment alone is expected to grow at a CAGR of 28.13% over the next four years. Rising smartphone use and better internet access support this growth.

2. Entry into Nutraceuticals
India’s nutraceuticals market was valued at $26.87 billion in 2023. It’s expected to grow at 13.5% CAGR until 2030. Zomato can explore this area to diversify income beyond food delivery.

3. International Expansion
The global online food delivery market is projected to hit $1.22 trillion in 2024. Zomato could re-enter or explore new markets, including China, to grow its user base and reduce dependence on India.

Conclusion
Zomato remains a dominant player in food delivery, especially in India. It has a large user base, strong investor support, and a history of smart acquisitions. But challenges like financial losses, failed experiments, and limited international reach hold it back.

By improving operational efficiency, expanding into new sectors like nutraceuticals, and entering more global markets, Zomato can strengthen its position and long-term profitability.