Zomato Forays Into Food Delivery Services With An Interesting Business Model

zomatoOnline restaurant search and discovery service Zomato will soon start taking order for food delivery from its customers. The service will pilot with 2000 of Zomato’s partners in India. The service will later be extended to the 10,000 partners that Zomato has across the country. In coming months, the service will also be extended to the many foreign markets where Zomato has acquired its competitors.
The service is different from other food delivery services as Zomato does not confirm the delivery order, but has supplied its partner restaurants with iPads with inbuilt Zomato app which act as Zomato’s direct line with restaurants who need to confirm each order placed through Zomato.
The service also has rating mechanism made mandatory by Zomato, i.e the user has to rate the restaurant for every delivery service made through Zomato. In case a restaurant is not rated after delivery, the app will prompt users to rate it before they place their next delivery order. This rating will be displayed on Zomato’s restaurant rating on the app.
Zomato’s food delivery service should compete against Foodpanda, which recently acquired a lot many food delivery services in Asian market. The service is also timed along with the launch of this year’s ICC World Cup. Users can select the food to order, pay for the service as well as track their food over the app. The pricing strategy adopted by Zomato for this service is based on price cut from orders processed; five star rating by users will be charged at 7.5% and the lowest rated service will be charged at 15% price cut.
[Adds Ashish : Isn’t this open for gaming? Plus, Indians aren’t known to give very positive reviews (lack of thanksgiving culture).
A lot of restaurants do not like Zomato’s approach – especially the fact that it is a gatekeeper-as-service and this sort of (dis)incentive opens up channel for competitor Foodpanda to grab the market.
Infact, this reminds me of how Domino’s 30-minutes-or-free model is made insignificant by their deliver boys who when late, plead you to not penalize as the company deducts the entire money from their salary.
So next time, you have a bad experience with a restaurant, expect a call (or a threat) depend on how you have rated the restaurants 🙂
Aside, Zomato by the virtue of live-tracking-the-order feature is also eating the lunch of Momoe, a Bangalore based startup (launched at UnPluggd)]
Zomato had also recently integrated Uber in it’s app. The gurgaon based firm was on a global acquisition spree over the past year, acquiring UrbanSpoon in the US, Cibando in Italy, Gastronauci in Poland and Lunchtime and Obedovat in Czech Republic’s and Slovakia.
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