Zomato’s Pricing Strategy: How They Make Money (And How It Affects You!)

Figuring out how Zomato actually makes its money can feel a bit like cracking a secret code, but it’s really a clever mix of different pricing strategies aimed at both customers and restaurants. You see, Zomato isn’t just about delivering your favorite meal. it’s built a whole ecosystem around food, and its pricing reflects that. By the end of this, you’ll have a much clearer picture of Zomato’s business model and how its pricing impacts both what you pay and what restaurants earn, right down to their latest financial moves.

Understanding Zomato’s Core Business Model

At its heart, Zomato operates as an aggregator platform. Think of it like a big online marketplace that brings together customers, restaurants, and delivery partners. This model means they’re constantly working to provide value to both sides: making it super easy for you to find and order food, and giving restaurants a wider reach and a delivery network they might not otherwise have.

The company started out as a restaurant discovery service back in 2008, a place where you could look up menus and read reviews. But it quickly evolved, adding online food ordering, delivery services, and even table reservations. This transformation has turned Zomato into a comprehensive food tech platform, connecting people with local eateries, cloud kitchens, and quick-service spots. Their mission, as they put it, is to “power India’s changing lifestyles” by making food more accessible and making instant commerce feel like magic.

The Many Ways Zomato Makes Money: A Multi-Layered Approach

Zomato’s revenue isn’t just from one simple source. It’s a dynamic mix, almost like a well-balanced meal, with various ingredients contributing to the overall financial health of the company. Here’s a breakdown of their primary revenue streams:

1. Restaurant Commissions: The Big Slice of the Pie

This is probably the most well-known way Zomato earns income. When you place an order through the app, Zomato takes a percentage of that order value from the restaurant. This commission typically ranges anywhere from 15% to 30% per order, but it can vary quite a bit. What influences this rate? Things like the restaurant’s location, how much volume they do, the type of cuisine they offer, and the specific agreement they have with Zomato. Decoding Zalando’s Digital Dominance: A Semrush Deep Dive

Larger restaurant chains often have more leverage to negotiate lower commission rates, while smaller, independent places might face the standard percentages. There’s even talk of commissions potentially going as high as 45% when you factor in additional distance-based service fees for restaurants, especially for deliveries beyond certain radii. This commission structure is a significant part of the cost for restaurant owners and something they definitely have to consider when setting their own menu prices.

2. Delivery Fees and Platform Charges: What You Pay

As a customer, you’re familiar with the fees you pay on top of your food bill.

• Delivery Charges: These are often dynamic, meaning they can change based on factors like the distance between you and the restaurant, the size of your order, and whether it’s a peak hour. Sometimes these fees are fully covered by you, the customer, but in other cases, they might be partially shared with the restaurant.
• Platform Fee: This is a relatively newer addition that Zomato and its competitors like Swiggy have introduced. It’s a per-order levy charged directly to customers. Recently, Zomato increased its platform fee to ₹12, following Swiggy’s move to ₹14 in some areas. This fee, along with its incremental increases since its introduction in 2023, helps both companies balance out their unit economics.

3. Advertising and Promotions: Boosting Restaurant Visibility

Imagine being a restaurant trying to stand out among hundreds of others on the Zomato app. That’s where advertising comes in, and it’s a major revenue stream for Zomato. Restaurants can pay Zomato to:

• Get Premium Listings: This ensures they appear prominently at the top of search results or in featured sections, increasing their visibility.
• Run Banner Ads: These are strategically placed within the app or on the website to catch users’ eyes.
• Offer Promotional Deals: Restaurants can create exclusive Zomato-only discounts, like “Buy One Get One Free” or percentage-off offers, to attract new customers and drive repeat business.

These paid promotions are crucial for restaurants to cut through the noise and get noticed, and they provide a substantial income for Zomato.

4. Subscription Services: Zomato Gold/Pro

Zomato has also tapped into the subscription model with offerings like Zomato Gold and its predecessors like Zomato Pro. Customers pay a recurring fee, either monthly or annually, to get access to exclusive benefits such as discounts on dining out, complimentary items, and sometimes even free delivery. Unlocking Automation: Your Ultimate Guide to Zapier and Sendinblue (Brevo) Integration

But it’s not just customers paying. Restaurants also often pay a monthly fee to be part of these loyalty programs, giving them access to a dedicated subscriber base and better visibility. This creates a steady, predictable revenue stream for Zomato while enhancing customer loyalty.

5. Hyperpure: Zomato’s B2B Supply Chain

This one might surprise you, but it’s a seriously important and growing part of Zomato’s business. Hyperpure is Zomato’s business-to-business B2B service, launched in 2018, that provides fresh, high-quality ingredients and kitchen supplies directly to restaurants, cafes, and cloud kitchens.

Think about it: restaurants need a constant supply of fresh produce, meats, packaged goods, and even sustainable packaging. Sourcing these from multiple vendors can be a real headache. Hyperpure steps in as a one-stop solution, leveraging Zomato’s vast network and logistics infrastructure to offer a streamlined, “farm-to-fork” model, promising next-day delivery across multiple cities. This cuts out middlemen, ensuring quality and potentially lower prices for restaurants, which, in turn, helps Hyperpure grow its own revenue. This segment’s revenue growth has been substantial, doubling year-over-year in some periods.

6. Quick Commerce: The Blinkit Factor

In 2022, Zomato acquired Blinkit formerly Grofers, headfirst into the quick commerce space. This means they now offer ultra-fast delivery often in under 15 minutes of groceries, essentials, electronics, beauty products, and more. Blinkit has become a massive growth driver for Zomato. In fact, in the first quarter of fiscal year 2026 April-June 2025, Blinkit’s Net Order Value actually surpassed Zomato’s core food delivery business for the first time, hitting ₹2,400 crore compared to food delivery’s ₹2,261 crore.

This expansion into quick commerce isn’t just about delivering groceries. it’s a strategic move to build a broader e-commerce platform and diversify revenue, positioning Zomato now operating under the parent company “Eternal” as a full-fledged player in instant commerce. Semrush AI Zusammenfassung: Your Ultimate Guide to Smarter Content Creation

7. Going-Out and Other Ventures

Beyond food delivery and supplies, Zomato also generates income from other services, though these might be smaller pieces of the pie compared to the main ones:

• Dining Out & Reservations: While its focus has shifted, Zomato still facilitates restaurant discovery and table reservations, earning from partnerships in this area.
• Events and Ticketing: Zomato has ventured into live events with initiatives like Zomaland, where they charge an entrance fee to users for concerts and other acts, in addition to food offerings.
• Consulting Services: They also offer consulting to cloud kitchens and restaurants, helping them identify expansion sites or even build custom food delivery applications.

Is Zomato Expensive? A Customer’s Perspective

It’s a common question: is Zomato expensive? From a customer’s viewpoint, the answer often leans towards “yes”. While the convenience is undeniable, the final bill on Zomato can sometimes be significantly higher than if you were to pick up the food directly from the restaurant.

Here’s why:

• Inflated Menu Prices: Many restaurants list their items at a 20-30% higher price on Zomato than their dine-in or direct takeaway menus. This helps them offset the commissions Zomato charges.
• Delivery and Platform Fees: As we discussed, you pay a delivery charge and a platform fee now ₹12 per order. These add up.
• Handling and Packaging Fees: You might also see additional handling or packaging fees, which can further inflate the total cost.

So, even with “free delivery” offers or Zomato Gold subscriptions, customers often end up paying 30-40% extra compared to ordering directly. This means Zomato often makes sense if there’s a good discount offer, though those seem to be rarer these days. Navigating Yahoo Finance for “SEMR” Insights (Semrush, Semiconductors, and More!)

Is Zomato Profitable? The Company’s Financial Journey

This is a question many investors and industry watchers have keenly followed. For a long time, like many tech startups, Zomato focused on growth, which often came with losses. However, the company has made significant strides towards profitability.

• Recent Profitability: Zomato has achieved five consecutive quarters of profitability.
• FY24 Performance: For the financial year ending March 2024, Zomato reported a profit of INR 351 crore, a substantial turnaround from a loss of INR 971 crore in the previous year. Their adjusted revenue for FY24 was INR 13,545 crore, showing a 56% year-over-year growth.
• Q1 FY25 Peak: In the first quarter of fiscal year 2025 April-June 2024, Zomato’s net profit soared to ₹253 crore, a massive jump from just ₹2 crore in the same period a year before. Revenue also saw strong growth, increasing by 74.1% year-over-year to ₹4,206 crore.

However, the latest reports for Q1 FY26 April-June 2025, from Zomato’s parent company “Eternal,” show an interesting shift. While total revenue surged by 70.4% year-over-year to ₹7,167 crore, the consolidated net profit saw a sharp 90% decline to ₹25 crore, down from ₹253 crore in Q1 FY25. This might sound alarming, but it’s largely attributed to Zomato’s strategic investments in its quick commerce segment, Blinkit, which is expanding rapidly. Blinkit’s Net Order Value actually surpassed Zomato’s core food delivery business in this quarter, indicating a significant strategic pivot and investment in that growth area.

Challenges to Profitability

Even with strong revenue growth, Zomato faces ongoing challenges:

• GST Liability: The company, along with Swiggy, is facing an additional annual Goods and Services Tax GST liability of Rs 180–200 crore each due to a clarification that online marketplaces must pay 18% tax on behalf of delivery workers. This tax burden is likely to be partly passed on to delivery workers or even consumers.
• Competitive Intensity: The online food delivery market remains highly competitive, with players like Swiggy and new entrants like Rapido’s “Ownly” which offers lower commissions to restaurants constantly pushing for market share. This competition can delay “meaningful margin expansion”.
• Operational Costs: Managing a vast logistics network, delivery partners, and technology platforms involves substantial operational expenses.

Despite these challenges, Zomato’s diversification into areas like Hyperpure and the aggressive growth of Blinkit are key strategies for long-term revenue and profitability. Cracking the Code: What Does YouTube SEO Really Mean?

Impact on Restaurant Partners: A Balancing Act

For restaurants, partnering with Zomato is a mixed bag, a balancing act between increased reach and increased costs.

On one hand, Zomato offers immense visibility and reach, connecting restaurants with millions of potential customers they might not otherwise attract. The platform also provides a ready-made delivery infrastructure, saving restaurants the hassle and expense of setting up their own logistics. Many restaurants find Zomato’s advertising tools, such as sponsored listings and promotional offers, essential for getting noticed and driving sales.

On the other hand, the commission rates typically 15-30%, potentially higher with additional fees can significantly eat into a restaurant’s profit margins. Some restaurant owners have noted that the total deductions, including commissions, delivery partner fees, and discounts borne by the restaurant, can push the effective commission rate higher, sometimes requiring a 42% markup on dine-in menu prices just to break even on Zomato orders. Listing fees and marketing costs further add to their expenses.

It’s crucial for restaurants to carefully factor in all these costs into their pricing strategy when listing on Zomato to ensure they remain profitable. Supercharge Your Site: How Yoast SEO and Semrush Work Together for Top Rankings

The Competitive Landscape: Staying Ahead

Zomato doesn’t operate in a vacuum. The food delivery and quick commerce sectors are incredibly competitive, especially in India.

• Swiggy: This is Zomato’s main rival, often mirroring Zomato’s strategic moves, whether it’s raising platform fees or expanding into quick commerce.
• New Entrants: The is always shifting, with new players emerging. For instance, Rapido recently launched “Ownly,” a food delivery service in Bengaluru, promising lower commission rates 8-15% to restaurant partners compared to Zomato and Swiggy 16-30%. This kind of competition keeps Zomato on its toes, constantly innovating and refining its pricing and service offerings.

Zomato tries to differentiate itself through continuous innovation, a customer-centric approach, and a focus on operational excellence and technological advancements. This helps them maintain their market leadership despite the intense rivalry.

Frequently Asked Questions

What is Zomato’s main source of income?

Zomato’s main sources of income are multifaceted, but primarily come from commissions charged to restaurants on orders, delivery fees and platform charges paid by customers, advertising and promotional fees from restaurants, and subscription revenues from services like Zomato Gold/Pro. Additionally, its B2B supply chain business, Hyperpure, and quick commerce venture, Blinkit, are significant and growing revenue drivers. Cách Tận Dụng Semrush Miễn Phí Để Vượt Lên Đối Thủ

Is Zomato more expensive than ordering directly from a restaurant?

Yes, generally, ordering through Zomato can be more expensive than ordering directly from a restaurant. This is because restaurants often list items at inflated prices on the platform to cover Zomato’s commission fees, and customers also pay additional delivery charges and a platform fee. Even with discounts or subscription benefits like Zomato Gold, the total cost can be significantly higher.

How much commission does Zomato charge restaurants?

Zomato typically charges restaurants a commission ranging from 15% to 30% per order. This percentage can vary based on factors like the restaurant’s location, order volume, cuisine type, and specific contractual agreements. In some cases, with additional distance-based service fees, the effective commission for restaurants could be higher, potentially reaching up to 45%.

How does Zomato Gold or Zomato Pro make money?

Zomato Gold or Pro generates revenue primarily through subscription fees paid by customers. Users pay a recurring fee monthly or annually to access exclusive dining benefits, such as discounts, complimentary items, and sometimes free delivery. Restaurants may also pay a fee to be part of these loyalty programs, gaining access to a dedicated base of high-value subscribers.

Is Zomato profitable in 2025?

Yes, Zomato has achieved profitability, reporting five consecutive quarters of profit. For the financial year ending March 2024, Zomato reported a profit of INR 351 crore. However, in the most recent Q1 FY26 April-June 2025, while revenue surged by 70.4% year-over-year, consolidated net profit saw a sharp 90% decline to ₹25 crore. This dip is largely due to strategic investments in its quick commerce arm, Blinkit, which is currently experiencing significant growth and operational expansion.

What is Zomato Hyperpure?

Zomato Hyperpure is Zomato’s business-to-business B2B service that supplies fresh, high-quality ingredients and kitchen supplies directly to restaurants, cafes, and cloud kitchens. It operates on a “farm-to-fork” model, aiming to streamline the procurement process for restaurants by offering a one-stop shop for everything from fresh produce and meats to packaged goods and sustainable packaging. This segment is a growing and profitable part of Zomato’s overall business. What is XML Sitemap in SEO: Your Essential Roadmap for Search Engines

Why did Zomato increase its platform fee recently?

Zomato increased its platform fee to ₹12 and Swiggy to ₹14 as a strategic move to improve its unit economics and boost profitability, especially amidst tempering growth in the online food delivery segment and ongoing investments in quick commerce. This fee, a per-order levy charged to customers, helps offset operational costs and contribute to the company’s bottom line.