The first thing we check when we order from the food delivery giant is discount offers and if the prices have been slashed by 50%, the discount is borne by the Restaurant 40% and the rest 10% is borne by Zomato.
This is because customers always prefer to order from a Restaurant offering a high discount until they have favorites.
So every month a lot of restaurant’s list themselves on Zomato in a hope to increase their customer base and in turn monthly revenue, so if one restaurant does not offer a discount there is a lot of competition willing to offer the same dish with a rebate.
Supposed monthly sale from Zomato: 100000
Zomato commission 25% – 25000
Zomato Ads to come first in listing – 20000 (Minimum Amount)
Discount offers 40% Share – 40000
Packaging cost – 5000
Total: 100000 – (25000 + 20000 + 40000 + 5000) = 10,000
Now see what a restaurant is getting in that 1 Lakh only 10000 which includes Raw Material, operations Cost. Thus a restaurant is bearing loss by offering such high discounts.
Another campaign that is quite popular is Zomato300, which gives the user 30% off up-to Rupees 300 on orders above Rupees 400, The Restaurants have to Contribute 21% to the Discount Code and Zomato pays for only 9% of the code.
Hence; since Zomato is contributing extremely less in these Scheme’s and Discount Code’s, the true loss is actually borne by the Restaurant’s and also the Delivery Chargers that a customer pays are completely owned by Zomato.