How Zomato Survived the Pandemic-A Case Study

Seema Banerjee Seema Banerjee
Apr 11, 2021 7 min read
How Zomato Survived the Pandemic-A Case Study

Life, as we know, ended with the advent of 2020. It ushered in a new and scary era by introducing us to COVID-19. This puzzle remains unsolved even after toils by the best minds in the world. We now talk about life before and after the pandemic.

Nothing remains untouched, and one of the most affected is the food business, particularly food delivery. Zomato is the forerunner in this industry in India. And it is only apt that their business performance is seen as an example.

Zomato Success Story - History | Tagline | Founders | Funding | Startup
Company Profile is an initiative by StartupTalky to publish verified informationon different startups and organizations. The content in this post has beenapproved by the organization it is based on. There were days when we used to call different restaurants to place orders andagain call up for c…

Zomato—Before Pandemic
Zomato—During Pandemic
Zomato—Now
Zomato—Steps Taken For Continued Business
Zomato—Ventures
Zomato—FAQ's
Zomato—Conclusion

Zomato—Before Pandemic

Zomato had reported a revenue of $192 million on a loss of $277 million in the financial year 2018-19. Then, in 2019-20, it doubled its earnings (revenue) reporting levels of $394 million on a loss of $293 million.

Zomato acquired competitor Uber Eats in January 2020 gaining market share to increase GMV by 108%. In figures, the GMV increased from $718 million in financial 2019 to $1.49 billion in the financial year 2020.

But as COVID-19 gained pace in the country, India responded starting a lockdown in March. The food delivery GMV (Gross Merchandise Value) was at an all-time low, reducing by 80% in the last week of Match 2020 (comparing with GMV at its peak in mid-February 2020).

Zomato—During Pandemic

In June 2020 quarter, Zomato had a revenue of $41 million on a loss of $12 million. These figures show the evident effects of the COVID-19 pandemic sweeping across India. But a positive impact was that the burn rate was reduced. It was expected to stand under $1 million and by July 2020 the monthly revenues started showing a steady rise reaching 60% of pre-COVID levels.

Zomato—Now

Following Goyal’s prediction, the recovery has now been over 80% in August 2020 and finally reached pre-COVID levels by October 2020. He further expects the food delivery business to grow 15-25 percent month on month. He informs that Zomato has done 9.2 crore deliveries since March with no reported transmission through delivery. The road through slow and rocky, persistence has still yielded results.

Zomato—Steps Taken For Continued Business

Precautions Taken By Zomato Delivery Partners During Pandemic

Zomato recognized that they have to take initiatives for survival in the hostile business atmosphere. There were a series of steps taken that lay down an example of a strong spirit and determination. We look at a few of these:

  • Contactless Dining: Introduced in India and eight other countries, patrons were offered contactless dining when they visited a restaurant. People were able to enjoy the dining experience without any interaction with restaurant staff or touching menu cards.
  • Contactless Food Delivery: A similar concept to contactless dining, here food was delivered without direct interaction with the delivery person. The food is left at an agreed point and picked up by the customer.
How to provide contactless expeirence to customers| contactless market
As the fight against the contagious coronavirus continues, this world seems likea changed place. This pandemic is going to leave an everlasting effect onconsumer behavior, with concerns shifting towards health and safety. Variousguidelines have been published on how to continue with daily life wi…
  • Temperature checks: All delivery partners have their temperatures checked when they reach the restaurant to pick up delivery before the order is handed out. This is then mentioned on the receipt for the benefit and information of the customers.
  • Aarogya Setu App: Zomato made it mandatory for all delivery partners to download and use the government-backed Aarogya Setu app.
  • Mask and Sanitizers: Mask and sanitizers have become a must at all times and for everyone. Zomato provided washable and reusable masks as well as sanitizers to all working delivery partners. Where they were unable to do this, they have reimbursed partners upon purchase o masks and sanitizers.
  • Training: All delivery staff was provided training on contactless delivery to ensure bot the parties remain safe during harsh times. This also included training on safety measures as recommended by WHO for delivery as well as personal fronts.
  • Restaurant safety: Zomato ensured that all partner restaurants implemented safety measures. They also shared all information with the user so they are assured of the safety measures and hygiene standards. This helps in making an informed decision. Restaurants also had to issue a declaration that they were following measures.
  • Insurance: Zomato has added OPD coverage of up to INR 5000 to cover potential testing costs for partners. In case of infection, they are also covered by insurance for medical expenses and any loss of earnings.
  • Disabling Cash on Delivery: Cash on delivery was disabled to avoid any contact and safety reasons.
Precautions Taken By Zomato Restaurant Partners During Pandemic

Zomato—Ventures

Zomato’s primary business model has been the food delivery business. But it also had a small niche segment of delivering groceries, fruits, and vegetables. This venture was called Zomato markets.

During the imposed lockdown in March and further, increasing numbers of COVID-19 swept India, people decided to go out of home less and less. The availability of daily essentials via Zomato was a lucrative option as bigger competitors like Big Basket and Amazon struggles to deliver. Zomato was able to deliver with ties to small and medium local shops.

However, once lockdown became relaxed, it faced stiff competition from new and old competitors alike. Eventually, it did exit this business and decided to focus on the food delivery business model as it started reaching pre-COVID levels.

Another interesting venture is Zomato’s Feed Daily Wager program under the aegis of Feed India campaign. It collected over 30 crores during the pandemic for this cause and was able to provide over 65 million meals to the daily wage earners who lost their means to earn.

Also, under this program, they delivered rations kits which would contain up to 100 meals for the family. More than 100,000 of these kits have already been delivered over the pandemic period.

Deepinder Goyal Success Story - Never Have A Bad Meal Through Zomato
The food delivery segment in India has witnessed an unprecedented surge. Latenight cravings, urgent home delivery, etc. are now becoming the norm. Atpresent, 2-3 brands dominate this industry and Zomato is one of them. Zomato is an Indian restaurant aggregator and delivers food in almost everyIn…

Zomato—FAQ's

What precautions did Zomato take while delivering the Food?

Some of the precaution taken while delivering Food Products during this Pandemic were-

  • Contactless Delivery
  • Face masks
  • Disabling COD

What is Contactless Delivery?

Zomato launched a contactless delivery option that allowed the customer to opt option for the delivery partner to leave the package outside their home, ensuring no human-to-human interaction and hence lowering the risk of any transmission.

How Zomato educated its delivery partners?

Zomato was involved in continuously educating its delivery partners on hygiene practices (not to touch face, nose, sneeze in the elbow, etc.) to ensure their own as well as the ecosystem’s safety.

Why did Zomato disabled the COD option?

Zomato temporarily disabled the COD (cash-on-delivery) option on its app for safety reasons and to avoid contact between the customers and delivery partners.

What is Zomato Gold Support Fund?

Zomato launched the Zomato Gold Support Fund with the goal of helping out the restaurants that were finding it difficult to support their workers during the pandemic.

How Zomato helped people who were directly affected by COVID-19?

Zomato provided services to the quarantine facilities that were essential during this pandemic. It was very important for Zomato to find more than just a few ways to help the community fight against this pandemic. Zomato teamed up with Apollo Hospitals to deliver food to those who were in isolation wards, in their quarantine facilities.

Zomato—Conclusion

It was unimaginable to think of the world that we live in today. The most important lesson probably is being human and having humanity in these times. All of us need to rise above individuals and support each other as a community.

Zomato has given us an example to follow. It saw its business decline on a slide, but it kept going and persevered. As a company, it tried to branch into other dimensions, albeit without success. But it remained focused and came back strongly in the end as the numbers and performance suggest.

Another factor was the support to the community, it included customers, restaurants, delivery partners, and even people in general as everyone suffered. Zomato has shown grit, determination, heart, perseverance in adverse conditions to come out a winner.

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