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Content, Communication and Crisis Management: A Case Study on Zomato

Online food delivery portals and applications have changed the way people select and order their food. The advancements in technology and easy availability of the internet and smartphones paved the way for online food ordering services. It was a concept unheard of in India, when the founders of Zomato decided to create a platform where people could conveniently browse through food menus of different restaurants, order online and get the orders delivered at their doorsteps. It was on a random afternoon when Mr Pankaj Chaddha and Mr Deepender Goyal noticed a long queue of people to glance through the menu card and order their lunch. This got them thinking and eventually resulted in the inception of Zomatothat time called Foodiebay. Since its inception in the year 2008, Zomato has grown exponentially. It started as a food directory which instantly gained popularity in Delhi NCR. And within 9 months the website gained popularity in other cities like Mumbai, Kolkata, Chennai, Bengaluru. In 2012, Zomato went international with its presence in many countries like UAE, UK, Sri Lanka, Philippines etc. Zomato steadily kept increasing its customer database and also ventured into online table reservation, finding nearby restaurants. However, Zomato has also undergone its share of crises. But be it because of its unconventional communication or other practices, Zomato does not shy away from communicating with different stakeholders. Zomato"s communication has never held back from responding and reaching out to their customers and community. Today Zomato has over 119 thousand restaurants against 43 thousand restaurants in 2019. Zomato has all the necessary elements that makes it a successful case to be explored. Apart from crisis management, it also has been able to strike the right chord with the sentiments of Indian customers by connecting with them at an emotional level. This case study delineates the journey of brand Zomatoan Indian entrepreneurial ventureand analyses the communication strategy adopted by the brand especially while managing any crisis situation. The paper also studies the measures adopted by Zomato to emerge as a stronger brand as the country grappled with lockdowns and other restrictions during the Pandemic. Based on the broad framework provided by the Situational Crisis Communication theory, the researchers have undertaken the evaluation using SWOT analysis to cover all aspects of the journey of Zomato so far.

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Zomato started in 2008 underneath the name, ‘Foodiebay’ to begin with. Later in 2010, it had been renamed to ‘Zomato’. Constantly 2011, Zomato extended to increasingly urban regions the country over in Mumbai, Delhi NCR, Chennai, Bangalore, Kolkata and Pune. After that in the year 2012, the corporate extended working all around in various countries like the UAE, Qatar, Sri Lanka, UK, South Africa and Philippines. In the year 2013, Zomato had moved their organizations in Brazil, New Zealand, Turkey and Indonesia, with its applications and site open in various lingos isolated from English. After that in April 2014, Zomato impelled its organizations in Portugal Republic, trailed by Canada, Lebanon and Ireland around a similar time. The acquiring of Settled - based sustenance zone ‘Urban spoon’ signified the organization’s passageway into the United States, Canada and Australia, and conveyed it into direct test with ‘Wail’, ‘Zagat' and ‘Open Table’. With the introduction of .xxx zones in 2011, Zomato also impelled ‘zomato.xxx’, a site dedicated to finding spot to eat near to your territory. It later moved a print adjustment of the site substance named, ‘Citibank Zomato Restaurant Guide’, got together with Citibank in May 2012, at any rate later it was halted.

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The advancement and use of smart-phones and internet resulted in improving online services. Zomato is a digital platform combining restaurants and an online food delivery system launched in 2008. The implementation of Lockdown to slow down the spread of pandemic COVID-19 resulted in badly affecting tourism, transport, economy, and hotel industry. Zomato food delivery is recovering from the effect of COVID-19 at a rapid rate with ~80% recovery in metro regions. The revenue in the fiscal year 2020 is increased by 105% and cost by 47%. The main objective of this paper is to understand online food delivery service by using a survey, how Zomato is operating in COVID-19, its effect on the culture of the hotel industry, the introduction of contactless dinning and challenges. The evaluation of the company is done using the SWOT analysis.

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Zomato Case Study: History, Valuation, Product, Services & Growth

Zomato is an Indian restaurant aggregator and food delivery company that was founded in 2008. Initially, the company started as a simple platform to help people discover new restaurants in their area, but over time it has evolved into a major player in the food delivery industry. Today, Zomato operates in more than 25 countries and has a user base of over 90 million.

Background: Zomato was founded by Deepinder Goyal and Pankaj Chaddah in 2008. The idea for the platform came about when Goyal and Chaddah were working as management consultants and found themselves frustrated with the lack of good restaurant options in their area. They decided to create a platform that would allow users to discover new restaurants based on their location, cuisine, and price point.

Initially, Zomato operated as a simple directory of restaurants, but over time it began to add more features such as user reviews, ratings, and menus. In 2011, Zomato launched its mobile app, which allowed users to access its services on-the-go.

Zomato’s Business Model: Zomato’s business model is based on a combination of restaurant discovery and food delivery. The company generates revenue through various means such as advertising, commissions on food orders, and subscription services.

Zomato has a two-sided platform that connects restaurants with customers. Restaurants can list their menus and prices on the platform, and customers can use the platform to discover new restaurants, read reviews, and place orders. When customers place orders through the platform, Zomato takes a commission on the sale.

Zomato also generates revenue through advertising. Restaurants can pay to have their listings promoted on the platform, which can help them reach more customers.

Finally, Zomato has introduced a subscription service called Zomato Gold, which gives users discounts on food and drinks at participating restaurants.

Challenges Faced by Zomato: One of the biggest challenges faced by Zomato is the intense competition in the food delivery industry. Zomato competes with other major players such as Uber Eats, Swiggy, and DoorDash.

Zomato also faced challenges in expanding into new markets. In some countries, such as China and the United States, the company struggled to gain a foothold due to strong local competition.

Another challenge faced by Zomato was managing its operations during the COVID-19 pandemic. The pandemic led to a surge in demand for food delivery services, which put a strain on Zomato’s logistics and delivery infrastructure.

Successes of Zomato: Despite these challenges, Zomato has achieved significant success in the food delivery industry. In 2021, Zomato went public with a valuation of over $9 billion, making it one of the most successful IPOs in Indian history.

Zomato has also expanded its operations to more than 25 countries, making it a truly global player in the food delivery industry.

In addition, Zomato has been successful in diversifying its revenue streams. The company’s subscription service, Zomato Gold, has been particularly successful, with over 1.4 million subscribers in India alone.

Conclusion: Zomato’s success can be attributed to its innovative business model, its focus on customer experience, and its ability to adapt to changing market conditions. As the food delivery industry continues to grow and evolve, Zomato is well-positioned to continue its success and expand its reach into new markets.

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A Detailed Zomato Case Study-2023

Few brands have expanded exponentially after their launch. One of them is Zomato.

How did they manage to achieve this success?

What did they do to improve their customer base?

What was Zomato’s marketing strategy which they used to attract customers?

We believe that Zomato’s digital marketing strategy played an important role in achieving all these.

This article evaluates a few e-marketing strategies and a detailed Zomato case study.

Zomato Case Study- About Zomato Company

When Zomato started, it aimed to become the best restaurant search and discovery platform.

It had the names of different restaurants, menus, costs, reviews, and other essential details. It offered in-depth information on more than 1.4 million restaurants across 23 countries.

Over the years, it has become a popular online food delivery platform. Now customers can order food from their favorite restaurants by using their website or app.

Zomato has many delivery executives who pick up the order from the eatery and deliver it to the customer’s address.

How was Zomato Started?

Zomato is an Indian group founded by two IIT graduates, Deepinder Goyal, and Pankaj Chaddah, in Delhi NCR in 2008.

Once Deepinder saw his colleagues ordering food from different restaurants. That was when Deepinder came up with bringing these restaurant menus online.

One day they noticed their colleagues standing in a long queue in the cafeteria waiting for lunch.

So they thought about how much time people could save if they did not have to wait and get their favorite food delivered to their doorstep whenever required.

It is how they started the online food delivery service under “FoodieBay” and renamed it “Zomato.” In the initial stage, FoodieBay listed restaurants in Delhi and NCR. But, they soon grew their business in other metro cities like Kolkata and Mumbai.

As FoodieBay started attracting more and more customers, the founders decided to revamp its name to appeal to audiences outside India too. So then they changed the name of FoodieBay to “Zomato.” By 2016, Zomato had its sophisticated app doing food deliveries from registered restaurants.

Zomato Business Model

The success of Zomato lies in its unique Business Model. Zomato is an app whose business model works around food supply online, providing knowledge, user reviews, and menus of partner restaurants. Here are some of the essential components of Zomato’s business model:

1. Customer segments-  The customer segment of Zomato has three different components: Local restaurants, reviews, and users.

2. Zomato provisions-  Zomato has created a well-designed valuation model for its food delivery services. Zomato Gold & Piggybank has enhanced the standard of services that Zomato offers.

3. Alliances of Zomato-  New partnerships with several big names like Visa, Uber Taxi, and Paypal have improved the business model of Zomato.

This online food delivery app provides a discount to advertise its usage and improve its customer base, considering the tough competition in the market. It’s mainly a selling strategy. Zomato soon started its service in the Cloud Kitchen industry too.

Competitors of Zomato

With various new companies launched in the last decade, the food delivery industry has become one of the largest online platforms.

Thanks to companies like Zomato, Swiggy, Uber Eats, FoodPanda, etc., they are changing the food industry quickly.

The online food delivery system is booming in metros and Tier II and III cities. All credit goes to these significant apps in the market.

The online food delivery industry is rapidly evolving and attracts vast money. However, growing competition and unstable growth policies have resulted in few casualties.

Because of enormous losses, companies like TinyOwl and Eat Fresh had to shut their doors.

Even FoodPanda, a popular food delivery app with a presence in over 13 countries, has been attained several times, initially by Delivery Hero and followed by OLA.

However, the company is still struggling to maintain its position in the online food delivery industry.

Zomato Partnership Strategy

Zomato is continuously working with the government to ensure that its services run smoothly without any hindrance.

Furthermore, it makes sure to support millions of people who are part of their food delivery network by earning money to cover the loss if they have lost their money due to some crisis.

Zomato has always been a leader in identifying the importance of videos and using them to its benefit on the YouTube platform.

Zomato plays short, lively, and unskippable video ads on YouTube with a “call-to-action .” It is proven that video ads play an essential role in Zomato’s advertising strategy.

Zomato Digital Marketing Strategies

Zomato is active on Twitter, Instagram, and Facebook. It has 757K followers, 1.5 million followers on Twitter, and more than 737K followers on LinkedIn.

Zomato communicates with its customers by creating posts on popular subjects.

The brand is aware of its audiences, likes, and dislikes. As a result, it supports material that people love to share, discuss, and reconsider.

To engage customers online, it utilizes popular topics and publishes simple pictures.

During the 2016 Olympics, Zomato promoted its brand on Twitter. The brand used Olympic rings made of coffee and claimed they would receive the gold medal if drinking coffee were a sport.

Another hot subject that Zomato targeted was The “Pokemon Go” video game. Zomato started earning from that too. The brand used the famous Pikachu to promote its brand on Twitter.

Connecting with the customers by Zomato was aided by positing popular themes. Users possibly don’t want to contemplate too much while using social media. Individuals use social media to enjoy and view humorous content.

Zomato’s digital marketing strategies keep on getting adjusted with new trends emerging. They find new methods to attract customers’ attention. Currently, they are doing a fantastic job.

However, they will benefit considerably if they put forth a sustained effort.

These people are skilled enough to make the most of the Email marketing tool. One of the most innovative and effective strategies is Zomato’s email marketing.

Zomato keeps its customers loyal to its company by utilizing appealing subject lines and a drive to action.

The brand ran an email marketing campaign on Amazon Prime Video with the theme of the legendary series Mirzapur Season 2. Zomato used the subject lines from Mirzapur.

In addition, it created a CV for Biryani as a vital part of one of its most prominent email marketing methods. Food-related terms like, for example, “Curriculum Vitae of Biryani” was showcased by Zomato.

In addition, it used the CTA “hire immediately” instead of “order now.” It is the reason why Zomato’s email marketing strategy performed so well.

Regarding SEO, Zomato has put a lot of effort into this field. According to Ubersuggest data, Zomato ranks for around 7,544,348 keywords on June 2023. Its organic traffic is 77,874,441 users every month.

The company lists the top keywords in its niche and designs a webpage for those. This indicates to the search engine that these pages are apt for the user’s search query. It is a great strategy to ensure that your website ranks top.

As of June 2023, Zomato has 12,738, 685 backlinks from different high-authority domains. It, too, helps Zomato to rank higher.

They are active on Social Media too. Zomato has 829K followers on Instagram and around 1.5 M on Twitter.

Zomato Target Audience

Zomato’s target audience comprises people between 18 and 35 with smartphones and well-versed in using different apps.

It focuses on attracting two customers, one who prefers to eat out and another who wants to order food from outside and deliver it to their home. These groups frequently coincide.

The Zomato Gold program offers incentives for those who eat out and offers food delivery service for those who want the food delivered at home.

Individuals who work and want their food delivered to their office, students who live in hostels and need food, those who lack time to prepare their food, and those who occasionally enjoy eating outside under this group.

Digital Marketing Channels Used by Zomato

Zomato uses Google AdWords for its search ad campaigns. It targets terms like “Food,” “Restaurant names,” “Online food ordering,” and many others.

It focuses on attracting people who want food delivered to them. It also runs Google Display ads to target individuals on apps and websites from 3rd parties.

Influencer Marketing Strategy by Zomato

Zomato has advanced the “hyper-local marketing” idea by advertising its material in regional languages and contacting micro-influencers.

It, in turn, increases the credibility of Zomato by enabling them to connect with more and more audiences.

Zomato has focused on Influencer Marketing in its marketing strategy as it identifies its potential.

Whether micro or macro-influencer, Zomato is not afraid to move further and leverages its disrepute to expand its user base.

All of us are aware of Zomato’s humorous takes on different scenarios through its tweets.

Zomato offers content that will make its customers smile, no matter whatever issue they are dealing with currently or the one they encounter regularly.

Moreover, its humor spreads fast and has a powerful impact.

Memes play a significant role in social media, and the brand has mastered the “meme marketing” method as it recognizes its importance.

As a result, the food delivery company attracts a lot of organic traffic. Thanks to the content marketing strategies followed by the brand, which ultimately helps to increase its revenue.

Acquisitions

• Zomato has acquired 12 startups worldwide.
• In 2014, during July, Zomato made its initial acquisition by purchasing Menu-mania for an undisclosed amount.
• The company pursued other purchases, including obedovat.sk and lunchtime.cz, for US$3.25 million.
• In September 2014, the brand acquired a Poland-based restaurant search service, Gastronauci, for an undisclosed amount.
• In December 2014, it attained the Italian restaurant search service, Cibando.
• In 2015, it bought Urbanspoon, a Seattle-based food portal, for an estimated US $60 million.
• Other acquisitions of 2015 by Zomato include Mekanist in an all-money deal, MapleGraph, the Delhi-based startup that built MaplePOS, and NexTable, a restaurant and table reservation management platform.
• In 2016, it bought Sparse Labs, a logistics technology startup, and Runnr, a food delivery startup, in 2017.
• In September 2018, it bought TongueStun, a Bengaluru-based food e-marketplace, for around US$18 million in cash and stock deal.
• In December 2018, it bought a Lucknow-based startup, TechEagle Innovations, focusing on drones for an undisclosed amount. Zomato stated that the acquisition would assist in starting drone-based food delivery in India, establishing technology targeted toward a hub-to-hub delivery network.
• On 21st January 2020, Zomato bought its competitor Uber Eats’ in India, providing 10% of the total business to Uber Eats.
• On 29th June 2021, the company signed an agreement with Grofers to invest about US$120 million in the online grocery market by purchasing 9.3% stakes in the company.
• In 2022 during June, Zomato attained Blinkit for US$568 million in an all-stock deal.

Investors Leaving Zomato 

Uber, which attained 7.8% of Zomato shares when Zomato bought its Indian subordinate of Uber Eats, left Zomato on 3rd August 22.

The shares were sold at around $392 million to protect Uber against the losses. ICICI Prudential Life and Fidelity purchased the Zomato stakes.

As per the reports published on 4th August 2022, Tiger Global sold half of its Zomato shares.

According to the news, the American Investment company sold the shares between 25th July and 2nd August 2022.

As a result, tiger Global had a total of 5.11% shares in Zomato, now 2.77% after the sale.

What are the Future Plans of Zomato?

Online food delivery platforms, Zomato and Swiggy, hit an all-time high in sales volumes during 2021, as most people stayed indoors due to an increase in Covid-19 cases.

Zomato said it earned more than 100 crores in Gross Merchandise Value (GMV), which shows the value of food ordered through this platform- compared to Rs. 75 crores it had achieved the previous year on 31st December.

While Zomato’s sales have been rising, the brand can still not make gains due to huge payments led by marketing and discounts.

It posted a total loss of Rs. 1,222 crores for March, a rise of about 50% since the previous year.

However, according to analysts, the food delivery business has a vast scope as it is estimated that the brand will achieve a turnover of $110 billion by 2025.

Zomato’s revenue increased 123% to Rs 4,109 crore in the financial year of 2021-22.

On the other hand, the brand’s loss increased by 24% to Rs. 1,098 crores. The brand’s annual report said its average monthly transacting customer base increased by nearly 116%.

The online food delivery giant, Zomato, narrowed its focus on three essential areas of online food ordering and delivery: food supply to restaurants through “Hyperpure” and fast commerce.

So Zomato started focusing on three vital areas: online food ordering and delivery, Hyperpure, and Quick commerce.

The brand’s online food delivery business is stable and headed toward productivity. As a result, online food delivery has enormous scope for growth in the future.

However, while restaurant food intake has risen in the last few years, its overall penetration in India is still drastically low compared to its worldwide competitors.

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Case Study on Zomato

17 Pages Posted: 22 Dec 2022

SaiVyomini Patamsetty

Independent

Date Written: December 11, 2022

Zomato’s tagline – “Never have a bad meal”. It serves as a comprehensive encyclopedia of restaurants, replete with ratings, average pricing, menus, and reviews. It is currently the only app of its kind in India. To keep the people entertained, they even have a streaming service with roughly eighteen original series. Zomato just focuses on food. It also intends to include everything from restaurant discovery to delivery in its value chain. Coming to the backstory of Zomato….in the year 2008, one day Deepinder Goyal and Pankaj Chaddah were waiting in the line for lunch in their cafeteria with their coworkers, it happened. They observed the lengthy line and considered how much time would be saved if customers could order their food online rather than waiting in line. They posted a few images of the cafeteria’s menu on the business website as a result. Soon many workers began placing online orders rather than visiting to the cafeteria directly. Originally known as Foodiebay, it is now called Zomato.

Keywords: Zomato, customer satisfaction, food delivery, HyperPure, COVID-19

Suggested Citation: Suggested Citation

SaiVyomini Patamsetty (Contact Author)

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