Zomato today announced that it has turned profitable. The company said, in a blog post, that it is starting to make money in the 24 countries where it currently operates. A good chunk of the profits is pouring in from Zomato’s advertising business.
It seems like ads are bringing enough cash from India, Southeast Asia, and the Middle East. The company feels it is making enough money to justify its large investments in other products and services.
As a result, Zomato is now offering zero commissions to its restaurant partners. All restaurants that meet certain criteria will now pay zero commission on all online food orders.
This criterion will involve the number of orders placed in a week, irrespective of customer ratings. Around 70% of Zomato’s existing restaurants will qualify under this, according to an estimate by the company.
We feel this will be a welcome move for restaurant owners. The lack of commissions would also help attract newer establishments. Currently, some restuarant owners charge delivery fees for orders placed online which they normally wouldn’t charge if you simply called them up. This way they recover their commissions paid to food ordering platforms like Zomato.
It will be interesting to see how Zomato’s competition reacts to the news. Last month, Zomato reported that they hit the 3 million orders in a month mark. It took them around 13 months to get to the one million mark, the second million took 8 months and the third took a little over four months. At that rate, Zomato’s online food ordering business is certainly headed in the right direction.