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What is zomato/Which company is Zomato's parent company/Is Zomato making profit?/What is Zomato's Marketing strategy?/What are the challenges infront of Zomato/Lessons
Zomato
Zomato is an Indian multinational platform that connects customers, restaurants, and delivery partners, making it easy to order food or groceries from the comfort of home. Founded in 2008 by Deepinder Goyal and Pankaj Chaddah as a restaurant review website, it evolved into a full-scale food delivery service and later expanded into quick commerce through Blinkit. In 2025, Zomato rebranded its parent company as Eternal Limited, which now owns Zomato, Blinkit, Hyperpure (B2B food supplies), and District (dining out and events).
The core business model revolves around facilitating orders between restaurants and customers. Zomato earns revenue primarily through commissions (typically 18–30% of the order value) from restaurants, delivery charges paid by customers, advertising and promotions within the app, subscription plans like Zomato Gold, and platform fees. In Blinkit’s case, it also earns by marking up goods sourced from suppliers.
Although food delivery may seem simple, Zomato operates in a highly complex environment. It manages a massive logistics network of delivery partners, integrates payment systems, ensures customer service, and maintains partnerships with thousands of restaurants. The company spends heavily on technology, marketing, and operations to stay ahead in the competitive market.
One of Zomato’s key strategies is building customer habits. By making the ordering process effortless and offering discounts, it turns convenience into a daily necessity. This is similar to how bottled water companies like Bisleri transformed an easily available resource into a trusted, premium product.
Financially, Zomato (Eternal) is currently profitable at the group level but with thin margins due to heavy investment in Blinkit and rising operational costs. The company bets on the fact that people’s hunger, time constraints, and preference for convenience will keep demand strong. Its success lies in turning basic human needs into a recurring revenue stream through technology and smart positioning.
Financial Profitability Overview of Zomato
Q4 FY25 (January–March 2025)
- Net Profit (PAT): ₹39 crore — a sharp drop of 78% year-on-year, down from ₹175 crore a year earlier.
- Adjusted EBITDA: Declined 15% year-on-year to ₹165 crore.
- Key Drivers: Revenue rose ~64% YoY to ₹5,833 crore, but mounting expenses—primarily due to aggressive expansion of Blinkit—squeezed margins.
Q1 FY26 (April–June 2025)
- Net Profit (PAT): ₹25 crore — a dramatic 90% YoY fall, down from ₹253 crore in Q1 FY25.
- Revenue Growth: Despite a 70% surge in revenues, rising costs weighed heavily on the bottom line.
Is Zomato Loss/Profit-Making?
- Consistently Profitable at the Consolidated PAT Level: Zomato’s holding company, Eternal (which includes Zomato and Blinkit), remains profitable overall, albeit with significantly reduced profits in the most recent quarters.
- Quick Commerce (Blinkit): Still operating at losses, with investment-heavy expansion and subsidies driving losses higher.
Summary Table
| Time Period | Net Profit (PAT) | Profitability Status |
|---|---|---|
| Q4 FY25 | ₹39 crore | Profitable, but sharply down |
| Q1 FY26 | ₹25 crore | Profitable, but significantly down |
| Quick Commerce | Losses | Not yet profitable |
So, Zomato is not making an overall loss, but its profits are under pressure due to heavy investment and competition, especially in the quick commerce segment.
Blinkit
Blinkit is a part of Zomato, now under its parent company Eternal Limited.
Relationship Between Zomato and Blinkit
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In June 2022, Zomato announced an all-stock deal to acquire Blinkit (formerly Grofers) for approximately ₹4,447 crore (US$568 million), which was completed on August 10, 2022. Following this, Blinkit became a wholly owned subsidiary of Zomato (now Eternal) .
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Eternal Limited (formerly Zomato Limited) is the consolidated corporate entity that now encompasses Zomato, Blinkit, District, and Hyperpure .
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As of Q1 FY26 (quarter ended June 30, 2025), Blinkit's quick-commerce business actually surpassed Zomato’s food delivery vertical in net order value — a clear sign of its growing significance within Eternal's operations .
Summary
| Entity | Ownership & Role |
|---|---|
| Zomato / Eternal | Parent company holding several business units |
| Blinkit | Acquired in 2022; operates as a quick-commerce arm |
| Relationship | Blinkit is a subsidiary under the Eternal umbrella |
So, Blinkit is fully integrated under the same corporate umbrella as Zomato, contributing significantly to the group's growth trajectory.
Despite the zomato is under loss its parent company Eternal Limited (the parent company of Zomato, Blinkit, Hyperpure, and District) is still overall profit-making, but its profits have dropped sharply over the last few quarters.
Profit Snapshot
| Period | Net Profit (PAT) | Change YoY | Status |
|---|---|---|---|
| Q4 FY25 (Jan–Mar 2025) | ₹39 crore | ↓ 78% | Profit, but steep drop |
| Q1 FY26 (Apr–Jun 2025) | ₹25 crore | ↓ 90% | Profit, but very low |
Why profits are falling
- Blinkit’s heavy expansion (warehouses, delivery network, discounts) is still loss-making.
- Rising operational costs across all segments.
- More competition in both food delivery and quick commerce.
So in short — Eternal is not in loss yet, but its profits are very thin compared to the size of its revenue. If Blinkit’s losses keep increasing, overall profitability could vanish in upcoming quarters.
How do Zomato set price of the item ordered by Customers?
Zomato (and Blinkit under Eternal) don’t directly “set” the restaurant or grocery prices the way a manufacturer would — instead, their revenue comes from commissions, fees, and promotions that are built into or added on top of the base price.
Here’s how they structure pricing to make revenue:
1. Commission from Restaurants / Sellers
- Food Delivery: Zomato charges restaurants a commission (often 18–30%) on the order value.
- Example: If a pizza is ₹200, and commission is 25%, Zomato earns ₹50 from the restaurant.
- Blinkit: Charges sellers or uses its own inventory markup (buy low from suppliers, sell higher).
2. Delivery Charges to Customers
- On low-order values or during peak hours, Zomato/Blinkit add a delivery fee (₹15–₹50+).
- This is extra revenue, but in reality it often only partially covers the actual delivery cost.
3. Restaurant Ads & Promotions (Big Revenue Source)
- Restaurants pay Zomato to appear at the top of the app search or get more visibility.
- This is pure profit for Zomato because it’s a digital ad placement.
4. Platform Fees & Subscriptions
- Platform fee: Small extra charge (₹2–₹5) on every order — 100% kept by Zomato.
- Zomato Gold (₹200–₹500/month): Membership fee for free delivery or extra discounts.
- Blinkit Genie Pass: Similar subscription for grocery delivery.
5. Surge Pricing / Peak Hour Adjustments
- Delivery fees increase during bad weather, late nights, or high demand, which raises Zomato’s take-home amount.
6. Own Inventory (Blinkit)
- Blinkit sometimes buys goods in bulk at wholesale rates (e.g., ₹80), sells at MRP (₹100), and keeps the difference.
💡 So, their revenue = Commission + Ads + Fees + Subscriptions + Inventory Margins.
The challenge is that delivery & operational costs eat away a large portion of this, especially on low-value orders.
Strategy of Zomato's Marketing
Now after overview of Zomato we will understand the Zomato’s whole strategy which is built on “facilitate first, profit later” model.
They act as a bridge between:
- Customers → who want convenience, variety, and doorstep delivery.
- Restaurants / Sellers → who want more orders, visibility, and logistics support.
How Zomato Facilitates & Earns
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Convenience to Customers
- Easy ordering from multiple restaurants in one app.
- Doorstep delivery within minutes to an hour.
- Offers, discounts, and loyalty programs like Zomato Gold.
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Support to Restaurants
- Handles delivery fleet (restaurants don’t need their own riders).
- Gives marketing exposure via app promotions.
- Manages payment collection & settlements.
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Revenue Streams for Zomato
- Commissions from restaurants.
- Delivery fees from customers.
- Ads & promotions from restaurants (high-margin).
- Membership subscriptions.
- Platform fees per order.
- Margin on own inventory (Blinkit).
Moreover, Zomato’s success is also built on our craving for comfort and convenience.
The Cycle That Made Zomato Big
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Human Nature:
- “I’m hungry… but it’s raining / I’m tired / I don’t want to get dressed.”
- That laziness (or time-saving mindset) creates demand for delivery.
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Zomato’s Role:
- Spots this behavior and says: “Don’t worry, we’ll bring it to you.”
- Makes the process so easy that going to the restaurant feels like extra effort.
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Revenue Opportunity:
- Since you’re willing to pay for convenience, they can charge:
- Restaurants for access to you (commissions)
- You for delivery, platform fees, and subscriptions
- Advertisers for visibility in the app
- Since you’re willing to pay for convenience, they can charge:
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Repeat Orders → Habit:
- Once you get used to food or groceries arriving in 20–30 minutes, it’s hard to go back.
- That habit = stable revenue stream for them.
💡 In short:
Our preference for “saving time & effort” fuels Zomato’s growth.
Zomato turns that behavior into a structured revenue model without us even feeling like we’re paying much extra.
📌 Business Philosophy:
- Step 1: Spend heavily to get customers used to ordering online (even if per-order losses happen).
- Step 2: Increase order volume so fixed costs per order go down.
- Step 3: Gradually raise delivery fees, reduce discounts, and boost high-margin revenue sources (ads, subscriptions) to reach sustainable profitability.
Why They’re Brave & Fearless
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Dependence on Unpredictable Human Behavior
- Hunger comes in waves, laziness varies, moods change.
- They gamble on the idea that enough people will feel lazy or hungry at the same time to make the system work.
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Massive Upfront Investment
- Building delivery fleets, warehouses (Blinkit), payment systems, and logistics before they’re sure customers will stay loyal.
- Running at losses for years to capture market share — requires guts and investor trust.
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Razor-Thin Margins
- Even with ₹1,000 crore in revenue, actual profit might be a few crore or even a loss.
- Still, they expand aggressively, betting the future volume will pay for today’s risk.
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Operational Chaos
- Managing thousands of riders, restaurants, and orders every minute.
- One mistake (late delivery, bad food, wrong order) can trigger social media backlash.
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Betting on Human Nature
- They bank on two constants: we get hungry, and we prefer comfort over effort.
- This psychological dependency is their safety net — and their battlefield.
💡 In short:
They’re like surfers riding the wave of our hunger and laziness — they can’t control the ocean, but they’ve built a business trusting that the waves will always come.
Zomato thought without worry
Zomato with food = Bisleri with water.
Why Both Looked Impossible at First
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Water:
- India always had water in homes.
- People thought: “Why would anyone pay for something that comes from the tap or well?”
- Bisleri bet on purity, convenience, and trust — and created a whole bottled water industry.
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Food:
- Every home in India cooks food daily.
- People thought: “Why would anyone pay extra for food when they can cook?”
- Zomato bet on time-saving, variety, and doorstep delivery — and made eating out without going out a habit.
The Common Formula for Success
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Identify a hidden pain point
- Bisleri: People want clean, safe water anywhere, anytime.
- Zomato: People want restaurant-quality food without the hassle of going out or cooking.
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Package it as a convenience
- Bisleri: Sealed, portable, branded bottles.
- Zomato: One app, many restaurants, quick delivery.
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Change public mindset
- Both made something “unnecessary” feel like a “must-have.”
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Scale before competitors catch up
- Once habit is formed, alternatives feel like extra effort.
📌 Moral: The real bravery was believing that people will pay for something they already have at home — if you make it easier, cleaner, or more enjoyable to get.
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