comscore Zomato waives commission fee for 70% of partner-restaurants as it turns profitable
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Zomato waives commission fee for 70% of partner-restaurants as it turns profitable

Zomato says that its advertising business is generating enough money to fund other investments.

  • Published: September 19, 2017 10:47 AM IST
Zomato-homepage

India’s premier food startup Zomato, which is close to being a unicorn, has announced that it is now a profitable business. “Yes, throughout the 24 countries where we operate, and across all our businesses, we are starting to make money,” Zomato Founder-CEO Deepinder Goyal wrote on the company blog. And to mark the occasion, the restaurant discovery site has decided to waive off commission fee for restaurants that recorded the highest orders on its platform. This means that Zomato would not be taking the seven percent cut of every order made on its site. Also Read - Amazon launches e-pharmacy service in India

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This could cover nearly three-fourths of Zomato’s 25,000-plus partner-restaurants across the country. “As per our current data, 70 percent of our restaurant partner base qualifies for what we are now calling #MissionGiveBack,” Zomato declared. This comes at a time when the Gurgaon-based company is facing stiff competition from Naspers-backed Swiggy, which incidentally, charges more than double the commission fee that Zomato does. The now-zero commission policy, of course, depends on two primary conditions the number of orders the restaurant processes on a weekly basis, and the level of customer satisfaction it records. ALSO READ: Zomato announces acquisition of hyperlocal logistics startup Runnr Also Read - Amazon, Flipkart and others to add labels to Chinese goods sold online in India

“We want to give back to the community which has played a significant role in our journey restaurant owners. We are rolling out a token of appreciation for restaurant owners and small business owners on our food ordering network in India… You are going to pay zero commission to Zomato if you qualify based on a set of predefined criteria,” Goyal explained in his blog. Zomato further announced that its advertising businesses in India, Southeast Asia, and the Middle East was “generating enough cash” to make up for the heavy investments it was making in other areas, and newer services like Zomato Gold and Zomato Base. ALSO READ: Zomato in talks with Alibaba to raise $200 million: Report

At present, Zomato is valued at around $960 million, and is believed to be in talks with China’s Alibaba for a funding of $200 million. If the deal goes through, it would value Zomato at over $1 billion, making it the first unicorn from the food-tech space. Alibaba’s interest in Zomato was sparked by the fact that the latter was able to narrow its losses by more than 80 percent in the last one year. Its new services are picking up a fair amount of traction, and its average ticket size continues to be the largest in the industry. Zomato clocks 3 million monthly orders, 1 million shy of closest rival Swiggy, but has a much wider footprint compared to its peers.

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  • Published Date: September 19, 2017 10:47 AM IST



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