GROUP 6

Akhil Powar – PGP38083

R Vivek Narayanan – PGP38139
Shalini K – PGP38147
Vishnu Dalai – PGP38162
Vaishnavi Pendke – PGP38353
Abyakta Patra– PGP38382
Kaushal Chhowala – PGP38446
Sumit Lohiya – PGP38480
 About

Founded
July, 2008

Age: 15 Years
Deepinder Pankaj
Goyal Chaddah

Platform Information Financials

Market Cap ₹75,000 cr
Type Multisided Platform
Revenue ₹7,079 cr
Industry Indian food review,
FY 2023
Indian food delivery
Share Price ₹88.55 as of 21/8/23
Sides Foodies, Restaurants
Profit -971 cr (loss making)
INDUSTRY ANALYSIS
Industry & Company Platform & Networked
Technology Business Model Recommendations
Analysis Market

P E
Political & Legal Economic

Factor E/I
National & state level regulations I Factor E/I
Regulations – food safety & data protection I Increasing labour costs I
Digital India campaign E Emergence of cashless transactions E
Covid 19 lockdown E Large & growing population – Large potential market E
Govt. Support to ONDC I Increase in disposable incomes – more WTP E
Backlash over commissions from local restaurants I

Inhibitor: There are various legal and political hurdles for Enabler: Growing and young working population act as
all players existing or entering the industry a support for the industry
Industry & Company Platform & Networked
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Analysis Market

T S
Technological Social

Factor E/I
Growing internet users base E Factor E/I

Advancements in AI/ML – Better customer understanding E Growing health conscious population I

Increased social media advertisements E Large youth population – more tech savvy E

Better access to high speed internet E Youth population more open to try online services E

Improvement in delivery methods E Present lifestyle – people want to save time by ordering E

Improvements in predictive technologies E Change in family structure – more working members E

Enabler: Improvement and access to internet has Enabler: Changing lifestyles and improvement of living
boosted the usage of food delivery applications standards have uplifted food delivery applications
 Industry & Company Platform & Networked
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Analysis Market

Bargaining Power of Buyers Bargaining Power of Suppliers

Restaurants Low* IT Infrastructure Providers High*

Factors Insights Degree Factors Insights Degree

Switching costs • Restaurants can easily switch from one + Switching costs • High switching costs due heavy initial +
platform to another investments
Size / • Buyer concentration is very low -- Size / • Less suppliers compared to online platforms +
concentration concentration
Availability of • Fewer close substitutes available -- Expertise • Higher expertise needed for services provided +
substitutes by supplier

Customers (Foodie) High* Packaging material providers Low*

Factors Insights Degree Factors Insights Degree

Switching costs • Multiple platforms available – Less switching + Switching costs • Low switching costs – multiple suppliers --
costs available
Price sensitivity • Customers are less price sensitive – more +
Differentiation • Low differentiation – Less power --
focused on quick delivery
Product • Less differentiated; large number of + Concentration • Less concentrated – More suppliers compared --
differentiation restaurants to online food platforms

Overall Attractiveness: Moderate - High Overall Attractiveness: Low - Moderate

 Industry & Company Platform & Networked
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Analysis Market

Threat from New Entrants Low*

Threat from substitutes Low*
Factors Insights Degree Factors Insights Degree
Investment • High initial investment required for -- Substitutes & • Traditional Dining: Hospitality --
technology, marketing, logistic and specific features • Ready to eat food: Less choices
partnerships • Cooking: Higher effort
• Tiffin services: Lack of options
Brand • Existing players have brand image & customer --
loyality Switching costs • Low switching costs – To switch to a +
Operational • Complex supply chain management – setting -- substitute
challenges up delivery network Availability of • Fewer close substitute available: (Tiffin --
Regulation • Regulatory requirements needed -- substitutes services is the closest)

Overall Attractiveness: High Overall Attractiveness: High

Rivalry High*
Factors Insights Degree
Major Players • Zomato and swiggy own majority market +
share
Exit barriers • High: due to heavy investments +
Switching costs • Low switching costs for both user groups +
(Restaurants and customers)
Growth rate • Industry growth rate 18.7% expected (2022 – --
2030) : Healthy growth rate Note: The Porter’s 5 Forces
Analysis has been done from
Overall Attractiveness: Low the Incumbent’s Perspective
Industry & Company Platform & Networked
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Analysis Market

Industry Attractiveness
• Highly attractive as per PESTEL & moderately attractive as per
Porter 5 Forces Analysis
• Over Attractiveness: Moderately Attractive Industry

Challenges
• High rivalry – Two major players (Zomato & Swiggy)
• Low switching costs for buyers
• High initial investment
• Less differentiated products (Most platforms have similar
features)

Major players in the industry

• Zomato
• Swiggy
• Food Panda
• FreshMenu
• Faasos

Industry KPIs
• Market Size: $ 28.4 Bn
• Expected growth rate (CAGR) : 27.8% (2023- 2028)
• Platform wise market share: Mobile App: 70%, Website: 30%
Ref:
[Link]
 Industry & Company Platform & Networked
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Analysis Market

Industry Value Net

Users
Consumers - Buy and consume food

Restaurants – Prepare, package and

sell food

Competitors Complementors
Direct - Food aggregator apps Payment services

Indirect - Restaurants (dine

Zomato
in/delivery), individual food chain
apps (eg- Dominos)

Suppliers
IT infrastructure provider, domain
name provider, delivery partners
(logistics), packaging material
providers
 Industry & Company Platform & Networked
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Analysis Market

Information
Quality
Restaurants (quality, cuisine
type, price range, distance);
Variety of Restaurants Dishes (quality, quantity); Customer Support
Onboarded Delivery Partner (ratings) System
Variety in cuisine, dishes, Provision to raise pre- and
prices to cater to needs of a post-sales issues, all-time
Logistics/Delivery diverse consumer base availability (24/7), prompt App/Website
Network resolution, feedback Design
Number of delivery Ease of use, intuitiveness,
partners, availability as per navigation flow, ad presence
time of day, partner vs
demand density

Key Success Factors

INTERNAL COMPANY
ANALYSIS
 Industry & Company Platform & Networked
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Analysis Market

Resource Category Resource Name Organization Valuable Rare Inimitable Comp. Advantage?

Restaurant Network Yes Yes Yes No Provide strong comp.

advantage
Network Resources User Network Yes Yes Yes No
But run the risk of
Delivery Partner network Yes Yes Yes No imitation

Sales and User Data Yes Yes Yes Yes

Provide strong comp.
Data Resources Data on promos/schemes Yes Yes Yes Yes advantage

Reviews and Ratings Yes Yes Yes Yes

Mobile Application Yes No No Yes Provide competitive

parity
Tech Stack Proprietary Recommender Algorithms Yes Yes No Yes
Essential resources to
Tech Infra: Servers, Data Centers, etc. Yes No No Yes be in this business
 Industry & Company Platform & Networked
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Analysis Market

Resource Category Resource Name Organization Valuable Rare Inimitable Comp. Advantage?

Office and Corporate Buildings Yes No No Yes NOT a source of comp.

Physical Resources advantage
Zomato Rest points Yes Yes No No

Zomaland Yes Yes Yes No Provide comp.

advantage
Add-on Resources Zomato Legends Yes Yes No No But can be substituted
with other consumer
Zomato Gold Yes No No No engag. Initiatives

Zomato Brand's Equity Yes Yes Yes Yes Provide strong comp.
Marketing Resources advantage
Social/Digital Media Reach Yes Yes No Yes

Employees/Data NOT a source of comp.

Human Resources Yes No No Yes
Scientists/Designers/etc. advantage
NOT a source of comp.
Physical Resources Office and Corporate Buildings Yes No No Yes
advantage
 Industry & Company Platform & Networked
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Analysis Market

Strengths Opportunities

Increasing income & smartphone adoption in tier-2+

1. Learning Curve Benefits to penetrate newer geographies
markets pose lucrative opportunities

Diversify by leveraging the health & wellness trends to

2. Leverage strong analytics engine & user data to diversify
curate newer offerings

Established network of users, restaurants, delivery Expansion of Zomato Legends to deliver in all tier-1/2 pin
3.
partners codes

Develop market for food festival by tapping on the

4. Strong social media presence and millennial user base
post-COVID trend of “revenge spending”

Indian gig economy undergoing +ve changes: potential to

5. Leverage First Mover Advantage to increase penetration
add more restaurants, delivery partners
 Industry & Company Platform & Networked
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Analysis Market

Weakness Threats

Negative perception about treatment/benefits passed to Regulatory pressure to manage gig economy; threat of
1.
delivery partners delivery partners leaving Zomato en masse

Low multi-homing costs: Users will order from competing

2. Delayed deliveries during high-traffic timeslots
platforms with quicker delivery

Threat of losing users after increasing prices to meet

3. Failure to show bottom-line profit
investor demands

Deep-Discounting: Restaurants exited Zomato due to Low switching costs: Restaurants tend to switch to other
4.
Gold’s deep discounting platforms with better returns

Threat of forward integration from restaurants with better

5. Lack of quality control over food delivered by restaurants
control over service quality
TECHNOLOGY
 Industry & Company Platform & Networked
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Analysis Market

User journey

Pre-order activities In-app activities Post-order activities Support

Stage Need generation Login & selection Payment Tracking Delivery Customer service

1. Login to app 1. Check items in list 1. Tracks the order 1. Receives the order 1. Complain when
1. Working man ordering food
User behavior 2. Search for 2. Apply coupons if 2. Receives the 2. Makes payment (for dissatisfied by the
for dinner quality of food
restaurants/dishes any delivery partner COD)
2. Ordering food for close get
3. Add to cart 3. Make payment details 3. Enjoys food
together

1. Track user behavior – time, 1. Smooth login 1. Loyalty discounts 1. Mapping delivery 1. Customer feedback 1. Provide customer
Zomato’s role location, etc. 2. Personalized reco. 2. Payment services partner care support
2. Push notifications based on 3. Display available 2. Predicting delivery 2. Quick assistance
purchase history dishes/restaurants time

1. Multi login option Payment checkout Order tracking page 1. Restaurant ratings 1. Report query
Features In-app notification system option
2. Sorting filters page 2. Delivery partner
(nearest, highest ratings 2. Call with executive
ratings) 3. Chat with executive

Technologies 1. AI/ML models to identify user 1. Listing algo, smart 1. Payment gateways 1. Matching algo. 1. Rating and ranking 1. Image processing
patterns search 2. Delivery/Surge 2. Time estimation system 2. Support Chatbot
2. Customized notifications 2. Backend database charge calculation algo. 2. Payment settlement
3. Data analytics tools to check availability algorithm 3. Support chatbots
4. User data base of dishes/
restaurants
 Industry & Company Platform & Networked
Technology Business Model Recommendations
Analysis Market

Harris, Shaw & Somers Framework

Technology diffusion

Emerging Base
Notification system Recommendation system
AI-ML & Big data analysis User data analysis for better
New delivery system helps generate personalized personalized reco.
Drones are used to deliver Payment system
notifications to improve CTR &
food faster without human Supply demand management Payment gateways to
conversion
Value Addition

errors. Right time delivery to system authorize processing of

correct users Trained AI-ML models to payments
Customer service match supply & demand
Image processing to detect quickly
faults in delivered items (insect Tracking system
in food) GPS enables accurate display
Cloud based platform
of order position in real time
Cloud based communication
on user application screen
through application between
restaurants & end users

Pacing Key

Research phase Early Adopters Competitive Advantage No Differentiation

 PLATFORM AND
NETWORKED MARKET
Industry & Company Platform & Networked
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Analysis Market

Networked market analysis

Online food delivery Comments Supply side users Demand side users

Natural monopoly Profit margin is constant with scale No No

Network effects High cross side network effects are Positive Positive
prevalent

Multi homing and switching costs Upfront costs are absent, Ongoing costs Low Very low
are present and competitive,
termination costs are absent

Demand for differentiated products Demand for variety is higher than Low Low
demand for specific differentiation.
Network effects help in bringing variety

Conclusion: This Networked market is not WTA

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Functional Typology Structural Typology

Two sided

Multiple
Connecting Platform Price setting platform Joint Venture Shared
Number of sides

Sponsor
One sided

Single
Variety platform Matching platform Proprietary Licensed

Ex Ante Ex Post Single Multiple

Transaction partner identity known Provider

 Industry & Company Platform & Networked
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Analysis Market

Side Factors Risk Level Timeframe Mitigation

Zomato could give preferential treatment to certain

cohorts based on some parameters, or assigns higher Present Minimize human touchpoints where
rated delivery partners to certain areas MED humans can influence the
rating/ranking of restaurants
Favoritism Risk

Foodies

Zomato provides preferential treatment to select Present Minimize human touchpoints where
restaurants MED
humans can influence the
rating/ranking of restaurants

Zomato starts chain of own restaurants/cloud kitchens Future Creating these restaurants as
and gives preferential treatment independent entities with no access
to user data (at par with other
LOW restaurants)
Making publicly disclosed external
Restaurants
audits to ensure fair playing field
Clear disclosure in public forum about
the venture
 Industry & Company Platform & Networked
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Analysis Market

Side Factors Risk Level Timeframe Mitigation

Abandonment Risk

Restaurants dependent completely on food delivery Present Minimize human touchpoints where
platforms like cloud kitchens and delivery only Future humans can influence the
restaurants like Behrouz Biryani would need to identify HIGH rating/ranking of restaurants
other means of delivery in case Zomato decides to
abandon operations.

Restaurants
 Industry & Company Platform & Networked
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Analysis Market

Side Factors Risk Level Timeframe Mitigation

Customers might reach out to restaurants and form Present Reducing opportunities for
personal connections for better deals HIGH Future restaurant-customer interaction
through superior customer support
Relationship Risk

Foodies

Restaurants might reach out directly to customers and Present Minimize human touchpoints where
redirect customers to their own online portals Future humans can influence the
bypassing Zomato HIGH rating/ranking of restaurants

Zomato might not share all the relevant user related Present Clear description of the data collected
data to partner restaurants to ensure competitive MED Future by Zomato and it’s usage policy must
Restaurants advantage be shared with restaurants. Any
relevant data that could help
restaurants must also be shared.
 Industry & Company Platform & Networked
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Analysis Market

Side Factors Risk Level Timeframe Mitigation

Restaurants unwilling to list as they are unaware of Past Building direct relationships with
Penguin Problem

the quality of service, which might degrade their restaurants.

reputation if not done well HIGH Identifying marquee eateries willing to
partner with Zomato and listing them
to encourage participation from other
restaurants and drawing customers
Restaurants unwilling to participate in promotional Present Building personal relationships with
schemes as they are unaware of the user response MED Future restaurants, sharing of risk by
and competitive positioning in case they choose to absorbing a part of the promotion
Restaurants
promote and rival restaurants refrain
expense
BUSINESS MODEL
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Analysis Market

Cust. Value Cust.

Key Partners Key Activities Key Resources Channels
Relationships Proposition Segment
• Restaurants • Provide Search • Large data base of • An Application: • Active presence on • Discovery: One stop
• Delivery Personnel Services: Takes care of Key channel compatible social media shop for all food lovers
restaurants
• Payment Gateways two question - with both Android and • In-app chat feature • No Minimum order
• Presence in 20+
"What to eat & from iOS restriction 1) Foodie
where to eat" countries • Convenient Self
• Official Zomato • Multiple Payment
• Driving CX • Funding Partners Servicing
website Options
initiatives • Brand Reputation • Up to date ratings
Users use to order their • Eval Restaurants:
• Delivery persons favourite food & also and reviews
Provide rating & reviews
• Modern tech stack look for ratings of
different restaurants
• Managing Logistics •Allow Restaurant
to process Order to stand out
• Partnerships with
restaurants &
•Food Delivery: 2) Restaurant
Smooth operations with
retailers cancellation policy
Owner
• Manage & Utilize
Advertising
• Food delivery
Cost Structure: Revenue Streams: ● Platform fee(INR 2 /order)
• Technology Setup: invests in the development & maintenance of app /website • Advertising: charge restaurants a fee to showcase the restaurant on its site
• Employee Salary • Subscription Charges: charge certain fees as subscription for Zomato Gold
• Branding & advertisement invests in marketing campaigns for popularity • Delivery Charges: delivery fee is distributed among the restaurant owner & Zomato
• Legal and accounting fees • Office maintenance cost
• Events (Zomaland): charges certain fees to get entry access to showpiece event.
 Industry & Company Platform & Networked
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Analysis Market

Revenue Streams:

Zomaland

Delivery fee Subscription Charges

Platform fee
(Can be a big step
towards profitability)
 Industry & Company Platform & Networked
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Analysis Market

Better Prediction of Cloud Kitchens

Future Demand Partnership/Set Up

Large Data

Faster Delivery

Large Customer
Better Service
Base
Investment in Product
Improvement/Expansion

Providing Heavy More Delivery

discounts & More Orders
Partners
incentives
More Variety

More restaurant
partners

Choices
Increased bargain
High Profitability
power with
Rigid Consequences restaurants

Flexible
Consequences
 Industry & Company Platform & Networked
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Analysis Market

Sr. No. Choices Theory Consequences Rigid/Flexible

Large Customer Database

Rigid
1 Burning Cash during initial years Focus on acquiring customers rather than profitability

Changing Consumer Behaviour Rigid

2 Zomato gold option Consumer paying membership fees to avail benefits Consumer Loyalty Flexible

Faster Delivery Flexible

3 Setting Up Super Cloud Kitchen Online delivery only kitchen
Reduced Costs Flexible

4 Restaurant & Dishes rating mechanism Consumer can rate & see ratings & reviews Informed Customer Choice (Better Service) Flexible

5 Unconventional Marketing Strategies Focus on new age techniques(Memes/Push Notification) Increased Brand awareness & recall Flexible

Higher Profitability Flexible

6 Setting up Zomato Hyper Pure Providing raw materials to Zomato Restaurants
Increased dependence of restaurants on Zomato Flexible

New Technological Capabilities Rigid

Acquisition of startups for expansion in new cities/to gain
7 Acquisitions
market share/Technology
Increased Market position Flexible
RECOMMENDATIONS
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Analysis Market

Recommendations Feasibility Impact Urgency Priority

● A Tiffin
Service
H M M 2

● Discount /
Coupons
(Regular
H M H 1
orders)
● Generative
AI to help
customers
M H H 1
decide

● Cloud
L L M 3
Kitchens
THANK YOU