Zomato Has Been Working Towards Adding Two New Initiatives To Its Plate

Zomato, the front runner in the food ordering and delivery business, has been on a path to turn around the company. To add to the massive kingdom they’ve alreay set up, they are now working on two new initiatives – Zomato Red and Zomato Infrastructure Services. These initiatives are a part of their plain to boost revenue and profitability.

These new initiatives will be rolled out between February and June 2017, and co-founder and chief executive of Zomato, Deepinder Goyal expects these businesses to start contributing towards revenue by next year. Further, he expects the revenues to be doubled for the next three years.

Zomato Infrastructure Services

Under this name, the company plans to create kitchen spaces in areas where there aren’t enough restaurants and the food prepared here will be delivered to customers. Apart from this, they will also allow restaurants and iconic brands to prepare and deliver food exclusively for Zomato through these kitchens. However, restaurants will have to pay commission rates as high as 35% on every order delivered through these kitchens.

Zomato will go all-in to invest in this project, right from kitchen to last mile delivery. Initially, this investment is to be tested in Gurgaon, where the company has taken up around 8,200 square feet with the capacity to house eight kitchens.

They plan to slowly roll this initiviative out to Tier 2-3 markets, where consumers do not have access to big brands and restaurant chains. The company is looking to invest about $2-3 million towards the initiative and expects a recovery period of six months before the investment starts generating cash for the company.

With the main idea being to make iconic brands available in cities and ares where they currently are not, they have already started talking to restaurants, who seem enthusiastic about this initiative. Further, they have enough data to predict the demand of various cusine area-wise, which aids them to effectively bring different cuisines and brands under one kitchen. However, the biggest challenge that restaurants seem to face is the cost of investment per kitchen.

Zomato Red

Once the launch of Zomato Red is complete, you can become a member of an exquisite loyalty programme. With a yearly/semi-annual subscription, customers can avail excusive offers such as happy hours on drinks and discounted food at various pubs and restaurants. This feature will be first rolled out in Dubai and Lisbon (Portugal) and is expected to be introduced in India by March 2017.

This loyalty programme will help the company strengthen its brand and build customer loyalty that will increase repeat orders. This seems to be a much needed move at this time, sine Zomato has been facing stiff competition from Bengaluru-based Swiggy in the food ordering space. Zomato is currently looking to raise fresh capital in order to support growth in existing and new business with focus on food ordering.

Now that the company has brought its cash burn down to below a million dollars, they have started focusing on strengthening their presence in key markets, which include India, the Middle East, Australia and New Zealand, among others.