With a lot of dreams in eyes, a Zeal to create new, and ambition to succeed in any situation, Deepinder Goyal and Panak Chaddah, near Delhi, started an eBay in 2008 with a small capital of Rs.20 lakh for providing your favourite food to your doorstep in Gurgaon and Delhi areas. Today, after a 12-long-year struggle, Zomato today emerged as a Multinational company.
The story of Zomato journey is however inspirational to may newcomers in startup businesses. The main challenge was from Siggy which had already entered with huge capital to supply eatables from restaurants and hotels of your choice in 2006.
It all started when the duo Deepinder Goyal and Pankaj Chaddah who were alumni of IIT Delhi working with Bain & Co in New Delhi. In their office, they came across many people waiting for a long time just to acquire a flash of the menu card. This is when the idea of obtaining a solution was planted in their mind and that has led to the vegetation of ‘Foodiebay’.
The soft copies of the menu cards are uploaded on the website and thereafter, everyone in their office began using this provision which conserved much of their time. This, in turn, increased the traffic to their website. Soon they expanded their website to make it available to everyone.
In 2010 eBay was renamed as Zomato (parallel to Tomato 🍅). From then using computer networking and making agreements with many restaurants and hotels and providing employment to young people and increased the supply chain to 80 cities in India.
Zomato founders thought of acquiring startups from 2011 to have dominance in e-tailing. So they acquired four companies Runner, Urbanspoon, Feeding India, Tonguestun with the financial help of Ant Financial. Slowly Ant Financial was given a 10% share in the business and started conquering abroad. They made branches in USA, Australia, Brazil, Canada, Chile, Czech republic etc totalling 24 countries with 43 offices abroad.
Tuff fight with Swiggy
Now Zomato is serving in 130 cities in India and Swiggy in 125 Cities in India. To fight with Swiggy they have removed Listing Charge for hotels and Restaurants. Anybody can make supply agreement without any advance or caution deposit. At par with Swiggy, they collect a commission of 7.5% to max 10% on daily billing.
After seeing the potential in food supply now Amazon (American company) also started pantry services in some metros now.
Zomato has a total investment of USD 500 million now. Being a Pvt Ltd company, financials are not listed anywhere.
Revenue in 2018-19 was openly declared at USD 206.30 million (1410 crore rupees) compared to USD 68 million in 2017-18 (490 crore rupees) in all countries. Net profit was not disclosed. However, it was estimated at 25% of the total Revenue. They disclosed that the highest amount earned by supply boys was Rs.50,000. Of course, some big restaurant is providing free tiffin and meals also to supply boys as their revenue has gone up due to Zomato.
Entering in Big Arena
We all know that India has a middle-class population of more than 30 crores with good income levels.
Flipkart, Amazon, Grocers and Big Basket are increasing their footprint in the retail supply of all essential commodities, groceries in all most 100 cities in India.
Now Zomato has declared that they are acquiring Grofers at USD 750 million. A sensation in retail marketing. Zomato has declared that they made an agreement with HUL, Proctor & Gamble, Dabur, Godrej, Marico biscuits, Vishal Mega Mart (130 shops) and Adani Wilmer to supply groceries and retail products from next month.
Select the nearest shop from above companies outlets and place orders, delivery will be in Two hours up to a weight of 12 kg.
In Grofers company, Japanese SoftBank subsidiary Vision Fund has an investment of USD 200 million. This investment will continue in the merged entity of Zomato Market. Many big corporates in India are also encouraging Zomato to go global and lending their helping hand.
What started as a small startup company way back in 2008, Zomato has now turned out to be multinational company in its quest to become a global leader in food delivery market. Now competing with American giants like Amazon, Flipkart is no less a herculean task for Zomato. Let us see how it emerges in the days to come. All the best for Zomato team.