Can Zomato Deliver Food through Drones?

Introduction – We all know Zomato and how it has changed the way we order food at home. Gone are the days where we have to dine out at restaurants, take away, stand in lines, go through a drive through or make a phone call to order food.

Now we can simply order food with the help of a swipe. We don’t even need to talk to a person on phone about which type of cuisine we want to order or how much we want to order.

We can simply put some filters in place and go through what all the restaurants have to offer. But with Covid-19 pandemic in place, a lot of people are worried whether to order food or not.

This has become a major concern because people don’t want a person to deliver food if they have a chance of being infected with a virus.

Their worry is completely justified as a similar incident occurred where 72 families got infected when a 19-year-old pizza delivery boy who was positive with the virus went door to door while delivering food.

But, how can Zomato combat this issue? Well the answer is Drones. In the future drones will deliver food to our doorstep.

Zomato has acquired a startup named TechEagle Innovations which will help them to deliver food by air. If successful, this will end the need of a person and the concern whether your food was touched by an infected person or not.

So the big question is that will this ever happen? We will answer this question but first we will give you a little background. Zomato is an Indian restaurant aggregator and food delivery start-up founded by Deepinder Goyal and Pankaj Chaddah in 2008.

In August 2020, Zomato drew a lot of praise for introducing a period leave policy which would allow their female employees to take up to 10 days time off per year if they are unable to work due to menstrual cycle health effects.

The policy applies to transgender employees as well. Kudos to Zomato and I hope that other companies will implement this policy as well. It also provides information, menus and user-reviews of restaurants as well as food delivery options from partner restaurants in select cities.

Due to Covid-19 Pandemic, it also began grocery delivery. As of 2019, Zomato is available in 24 countries and in more than 10,000 cities.

 

Early Days and Expansion – Zomato was founded in July, 2008 as FoodieBay but it was renamed as Zomato on 18 January, 2010.

• In 2011, it expanded into various cities such as Delhi NCR, Mumbai, Bangalore, Chennai, Pune and Kolkata.
• In 2012 it expanded operations internationally in several countries, such as UAE, Sri Lanka, Qatar, UK, Philippines and South Africa.
• In 2013, they added New Zealand, Turkey, Brazil and Indonesia to their website and apps were available in Turkish, Portuguese, Indonesian and English languages.
• In 2014, they launched their services in Portugal. This was followed by a launch in Canada, Lebanon and Ireland in 2015.
• In 2019, Zomato acquired Seattle based food portal Urbanspoon for an estimated $60 million and this led the firm’s entry into USA and Australia.

 

Marketing Strategy – The marketing strategy of Zomato is to target the young audience. They want to target people aged 18-35 as they are technically more savvy and are more likely to order food from an online app rather than the older generation.

The younger generation is also more likely to transact in a digital and cashless mode while the boomers are still trying to catch up. They also market to working professionals who need food in their offices and to the students who need food in their hostels.

These are people that don’t have time or space to cook for themselves, and other people who occasionally wish to eat outside.

 

User base & Valuation – Zomato had over 11.2 million transacting users on a monthly average during the first half of the financial year 2020, which is a significant increase from 2019.

In November 2020, Zomato has closed a primary fundraise of $195 million (about Rs 1,455.4 crore) from 6 different investors.

Of the $195 million:-

• $60 million was raised from Luxor Capital Group LP,
• $50 million was raised from Kora Management LP,
• $40 million was raised from Mirae Asset invested,
• $20 million was raised from Teadview Capital,
• $20 million was raised from Bow Wave Capital Management LP,
• $5 million was raised from Baillie Gifford & Co.

After the funding round, Zomato was at a post-money valuation of $3.6 billion.

Investors – There are many investors in Zomato which are as follows:-

• Kora
• Tiger Global Management
• Baillie Gifford
• Ant Group
• Naspers
• Delivery Hero
• Glade Brook Capital Partners
• Sequoia Capital India

 

Revenues – Zomato had losses of Rs 389 crores for the year 2016-17. It was still great if you compare it with the previous year where its losses were Rs 590.1 crores.

It doubled its revenue to $394 million in 2019-20, on a loss of $293 million. In the June quarter, it reported revenues of $41 million on a loss of $12 million. In FY19, they reported revenue of $192 million and a loss of $277 million.

This was due to the lockdown imposed because of the Pandemic.

 

Acquisitions – Zomato has acquired a lot of startups to expand their services and they are as follows:-

• In July 2014, Zomato made its first acquisition by buying Menu-mania for an undisclosed sum.
• It then acquired lunchtime.cz and obedovat.sk for a combined US$3.25 million.
• In September 2014, it acquired Poland-based restaurant search service Gastronauci for an undisclosed sum.
• In December 2014, it acquired Italian restaurant search service Cibando.
• It also acquired Seattle-based food portal, Urbanspoon, for an estimated $60 million in 2015.
• Other acquisitions of 2015 include Mekanist in an all-cash deal, the Delhi-based startup MapleGraph that built MaplePOS (renamed Zomato Base), and NexTable, a US-based table reservation and restaurant management platform.
• In 2016, it acquired Sparse Labs, a logistics technology startup, and the food delivery startup, Runnr, in 2017 (renamed from Roadrunnr when it acquired TinyOwl in 2016).
• In September 2018, Zomato acquired Bengaluru-based food e-marketplace, TongueStun Food, for about $18 million in a cash and stock deal.
• In December 2018, Zomato acquired Lucknow-based startup, TechEagle Innovations that works exclusively on drones, for an undisclosed amount. Zomato claimed that the acquisition will help pave the way towards drone-based food deliveryin India, building technology aimed at a hub-to-hub delivery network.
• On 21 January 2020, Zomato acquired its rival Uber Eats business in India in an all stock deal, giving Uber Eats 10% of the combined business. This was one of the biggest acquisitions for them.

 

Controversies – So far, Zomato has been involved in 3 major controversies which are as follows:-

• Food has no Religion Tweet – In July 2019, Zomato received a customer complaint that a customer was assigned a non-Hindu delivery boy for his food order in Jabalpurand he had asked Zomato to provide a Hindu delivery boy. The customer alleged that Zomato had refused to change the rider after which he asked to cancel the order. The customer then posted this incident on Twitter, after which Zomato responded to the message stating: – “Food doesn’t have a religion”. It is a religion.

• Logout Campaign – On 17 August 2019, more than 1,200 restaurants logged off from Zomato because of their offers of discount at dine-in restaurants. In Pune alone, more than 450 restaurants stopped serving to Zomato Gold because of aggressive discounts and loss of business. Its premium service Zomato Gold had 6,500 restaurants partners and a total of 1.1 million subscribers in India as of August 2019. As part of the campaign, around 2,500 restaurants logged out from the Zomato Gold service. Zomato founder Goyal admitted mistake, became ready to rectify it and he urged restaurants to stop #Logout campaign.

• Mass Boycott – On November 18 2020, Swara Bhasker tweeted “Defund The Hate” and asked Zomato to pull their ads from the TV channel “Republic TV” as she was not happy about the fact that it will indirectly fund communal hatred. Zomato replied that they don’t endorse any content except their own and assured the actress that they will further look into the matter. Zomato’s reply was met with severe criticism, backlash and very soon #BoycottZomato was trending on Twitter.

 

Future Goals – In the future, Zomato would want to be profitable as soon as possible as they are planning to file for an IPO in first half of 2021. They would also want to have more market share than their arch rival Swiggy who is their biggest competitor till date. In March 2020, CEO Goyal said that the company is aiming for 10x growth in the next 5 years and will create more jobs. They plan to touch 25 million customers per week.

 

The Big Question – Now the big question is – Can Zomato deliver food through Drones?

The answer is quite complicated and for this to happen a lot of things needs to be done such as:-

• Become Profitable ASAP,
• Get enough Technology and Manpower to handle Drones,
• Get the necessary permissions to fly Drones.

Only time will tell us what will happen. But if it happens it will result in some job losses as there won’t be a need of delivery boys but at the same time it would require people who can handle the drones.

Hence, I would advise you to get as Skilled as possible to survive in the age of Machines and Automation.

Wish you all the very Best.