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Zomato registers over 2 mn food orders in March

31 March, 2017

Restaurant listings firm Zomato’s food ordering service has clocked more than 2 million orders in March, just over two years after it was launched, the company said.

The company attributes the traction to strong customer retention, expansion of its network from 12,000 restaurants a few months ago to 18,000, and low marketing costs, which it pegs at $50,000 (about Rs 32 lakh) a month.

Swiggy, Zomato’s main competitor in the food delivery business, processed 1 million orders in May last year. In the same month, Zomato clocked 750,000 orders.

“We are now the leading food ordering platform in India and the UAE. We are also the largest food search/discovery platform in 13 countries outside of India,” the blog read.

In the blog post, Zomato also said the company’s average order value was Rs 430 for India and AED 62 for the UAE.

Zomato’s food ordering business contributes 20% to the company’s top line.

“We make Rs 20 profit on every delivery fulfilled by the restaurants while losing Rs 2 on every delivery we undertake,” Deepinder Goyal, chief executive and co-founder of Zomato, had said during an investor’s call in May 2016.

Since then, the company has scaled back the deliveries it itself undertakes. From 20%, the number has come down to 10%. The rest of the orders are delivered by restaurants themselves.

In January 2016, it shut down the food ordering service in four cities—Lucknow, Kochi, Indore and Coimbatore.

Zomato says it’s unit economics are positive now, and margins hover around 55%. It charges 8.5% commission to restaurants on its delivery platform.

The company’s revenue touched Rs 184.96 crore in 2015-16 against Rs 96.73 crore in 2014-15. Its delivery business grew 30% month-on-month in 2015-16.

Founded in 2008 by IIT-Delhi alumni and former Bain employees Goyal and Pankaj Chaddah, Zomato’s losses have multiplied over the years as it expanded rapidly.

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Zomato registers over 2 mn food orders in March

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