The already buzzing online food ordering domain in India, just got a new entrant. Zomato, the online restaurant discovery platform with presence in over 15 countries, has started to offer its own food delivery service, starting from Delhi. The service is expected to expand to Mumbai and Bangalore soon.
For each order placed via its service, Zomato will charge 7.5% to 15% commission from the restaurant. Users will have to give rating compulsorily as the commission structure is based on user ratings. For a 5 star rating, Zomato will charge the restaurant a commission of 7.5% and for a 1 star rating restaurant, Zomato will be charging 15% per order.
If the user doesn’t give ratings, then whenever he/she places second order, the app will redirect them to the ratings page, similar to what some cab service providers do. This forces restaurants to improve their service and serve better to customers. The company has given restaurants iPads which will act as the direct line of communication for hotels to confirm orders from Zomato users.
Zomato was started in 2008 by Deepinder Goyal, Pankaj Chaddah. Till now, the company has raised $113.8 million in 7 rounds of funding, latest being $50 million in Series F round by Info Edge, Sequoia Capital and Vy Capital. The company has presence in over 22 countries.
Zomato’s biggest competitor in this food ordering service is Foodpanda. It charges 12% commission to restaurants for every order. Ola also recently introduced its food delivery service – Ola Cafe. However, Zomato is not handling the actual delivery like FoodPanda does, it is only serving as facilitator between the restaurant and the customer.
Moreover, food ordering looked as the most probable next step for Zomato, as the company has been pretty much successful in becoming a global player in the restaurant discovery domain. While it had earlier acquired a much larger US counterpart, UrbanSpoon, it more recently raised a $50 Million round from existing investors