How does Zoomcar make money? | Zoomcar Business Model

Dev Gupta Dev Gupta
Aug 18, 2022 5 min read
How does Zoomcar make money? | Zoomcar Business Model

Zoomcar is India's first self-drive rental company. The concept of enjoying a car drive without actually buying a car was fascinating for Indians.

Today, Zoomcar has over 10,000 cars in the fleet. It has a market share of 60% and has gained massive popularity. The company has 91,00,000+ happy users.

But, how did this company grow so much over the years? To find an answer to this question let's understand the business model of Zoomcar in detail.

What is Zoomcar?
Operating Model and Key Products and Services of Zoomcar
Target Audience of Zoomcar
Business Model of Zoomcar
What is Unique about Zoomcar's Business Model
Zoomcar Revenue Model
FAQ

What is Zoomcar?

For the people who are living under a rock, using Zoomcar you can rent a car on an hourly, daily, weekly or monthly basis.

It was founded in 2013 by Greg Moran and David Back. The company is headquartered in Bangalore and currently operates in 45 cities. The tagline of this company is Never Stop Living.

Operating Model and Key Products and Services of Zoomcar

To book a car using Zoomcar you first need to be a Zoomcar member.

You also should be 18 years or above. You must have a valid Light Motor Vehicle (Non-Transport) Indian license.

If you are an NRI then you should have an international driver’s license. In the past seven years, you shouldn't have any kind of alcohol or drug-related driving violations.

Target Audience of Zoomcar

The target audience of Zoomcar is mainly middle-class people between 18-35. They are targeting the people who travel a lot.

If we dive deeper they target teenagers and businessmen. Many young YouTubers have promoted Zoomcar. As we know teenagers follow YouTubers which helped the company to grab a lot of young individuals.


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Business Model of Zoomcar

Zoomcar follows a business model where it buys 75% of the cars on loans from the bank. The remaining are bought on lease from big companies like Avis Budget Group. Now, let's understand other core elements of their business model.

1. Partnerships:

Zoomcar has tied up with various companies to include more cars on their website and to make profits. One of the major partnerships includes Ford & Mahindra.

This helped them become the first rental company in India to offer electric cars (Mahindra REVA E2O and Ford's REVA E2O) for rent.

They have also smartly tied up with Tata Motors. This helped them to add 50 brand new Tata Nanos. To secure parking and pick-up points they have tied up with several hotels, universities, and real estate developers.

Zoomcar has also partnered with Nissan for a vehicle subscription programme. Customers can subscribe to Nissan Magnite and Nissan Kicks.

In November 2013 they also launched a month-long campaign named RideSmartBLR to spread awareness about drunk driving. This campaign was launched in partnership with Uber and the Ashoka Foundation.

2. Additional Benefits:

Apart from rental services they also give additional benefits which make them a better option. They are as follows:

  • Mostly the vehicles available on Zoomcar have all India permits.
  • All the vehicles are strategically placed so that customers can pick up the vehicle conveniently.
  • If you want you can also get doorstep delivery of the vehicle.
  • Rates available on Zoomcar have free fuel, taxes, and insurance.
  • Their call centers are open 24/7 to help customers solve their queries.

What is Unique about Zoomcar's Business Model

Today, if I tell you to rent a car you would immediately open Zoomcar's website or app. This shows how much popularity they have gained in these years.

But, apart from them, other companies like Drivezy, SelfDrive, U-Drive, Letmedrive, Carzonrent, and LeasePlan offer similar services.

Why they are not so popular? You might have not heard the names of some companies mentioned above. Let's understand what unique things Zoomcar did which helped them to reach such heights.

1. Performance Marketing and CRM:

Zoomcar's marketing strategy is majority focused on performance marketing. This means that the company pay the marketing companies only when a specific task is completed like sales or getting leads or clicks.

The company uses the customer relationship managing (CRM) team to increase repeat transactions.

2. Out of the box Marketing:

Zoomcar has taken a lot of effort to make sure everyone knows about their company. What is the best way to tell people about your company? The answer is the internet.

Zoomcar used the internet smartly to grow its customer base organically. The company advertises its logo and name on the cars that they provide.

Apart from the people who are using the car, others also get to know about the company's presence.

Zoomcar logo on its Cars
Zoomcar logo on its Cars

Their collaboration with FilterCopy, a YouTube Channel helped them gain popularity among the youth.

If you search #zoomcar on Instagram you will see a lot of high-quality images of people using the car and sharing their experiences.

Zoomcar Instagram
Zoomcar Instagram

Their exceptional services made the people happy. As you know a satisfied customer does a good job of spreading awareness about the company.


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Zoomcar Revenue Model

Zoomcar's business and revenue model are straightforward. They rent you a car according to your preferences and earn money out of it.

In the financial year 2017-18, their revenue was $19 Million. But, the company was at a loss as its revenue was less than its expenses. To tackle this they launched ZAP Subscribe.

ZAP Subscribe:

This is an interesting program launched by Zoomcar which helps them to make profits. ZAP Subscribe is actually an extension of the previously launched ZAP Program.

Using this program individuals can subscribe to a new car on monthly basis. You can subscribe to a car from Rs 16,000 to Rs 50,000, depending on the car size.

This will help you to save the subscription fee. The subscription comes up with tenures of 6, 12, 18, and 24 months.

Conclusion

Zoomcar needs to give more benefits to its customers to be in this race for a long time. Their aim, for now, is to grow their business in other parts of the country. They have to give more reasons to their customers to subscribe to a car instead of buying one.

FAQ

When was Zoomcar founded?

Zoomcar was founded in April 2012 by Greg Morgan and David Back.

What is the revenue of Zoomcar?

In Β FY21, the startup's total revenue stood at INR 103.6 Cr as against the INR 293.7 Cr it recorded in FY20

Who is the target audience of Zoomcar?

The target audience of Zoomcar is mainly middle-class people between 18-35.

What is the market share of Zoomcar?

Zoomcar has a market share of 60%.

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