1. Zomato cut down operating cost down to $1 mn per month: CEO Deepinder Goyal

Zomato cut down operating cost down to $1 mn per month: CEO Deepinder Goyal

Online restaurant and food delivery company Zomato has further brought down its operating cost to under $1 million per month in the last three months from $1.7 million earlier, Deepinder Goyal, CEO and founder, Zomato told FE.

By: | Updated: September 1, 2016 6:02 PM
zomato-l With no plans to start its own delivery service, Goyal says that the company will continue to use third party logistic firms such as Delhivery to deliver food for some of the restaurants. “Currently 12% orders are delivered by us through third party logistic companies,” explained Goyal.

Online restaurant and food delivery company Zomato has further brought down its operating cost to under $1 million per month in the last three months from $1.7 million earlier, Deepinder Goyal, CEO and founder, Zomato told FE.

In May this year, Goyal in an analyst call said that the company had cut operation cost to $1.7 million from $9 million after it trimmed down its operations including closing down its business in nine countries such as the US, UK, Ireland amongst others.

Until last year Zomato was present in 23 countries, but currently it is present in 14 countries. Goyal claims that the number of orders registered by the online firm has increased to 48,000 per day with an average ticket size of Rs 465. “In the last six month we have been growing at a rate of 27% month-on-month,” he said.

Moreover, since June this year, the online platform has increased its commission to 10% on every order. Thus, Zomato currently earns about Rs 22.32 lakh per day from its food delivery business. Until May this year, Zomato clocked about 26,000 orders per day and earned a commission of 7.5% on each order.

With no plans to start its own delivery service, Goyal says that the company will continue to use third party logistic firms such as Delhivery to deliver food for some of the restaurants. “Currently 12% orders are delivered by us through third party logistic companies,” explained Goyal.

According to Goyal, at present food delivery accounts for only 20% of its revenue, while it generates about 80% revenue from ad-sales. It should be noted that Zomato reported a loss of Rs 492.27 crore for the year ended March 31, 2016 as compared to Rs 136 crore in FY15. While, the revenues increased to Rs 184.97 crore at the end of FY16 as compared to Rs 96.7 crore in FY15.

The losses at the online restaurant search and discovery portal Zomato widened by 262% at the end of FY16 even as its revenue increased by 92%.

The disclosures were made following the financial results of Info Edge, the parent company of Zomato. The losses for Zomato has been steadily increasing over the years. In February, Zomato had claimed that it had achieved operational breakeven in six countries including India, Qatar, UAE, Lebanon, Philippines and Indonesia.

  1. B
    Baz White
    Sep 28, 2016 at 10:39 am
    Mosses down to $1 million a month which gives them 8 months until they are bust. No-one will invest in this business. They had their opportunity and blew it.
    Reply
    1. prakharkapoor
      Sep 3, 2016 at 1:57 pm
      I do not believe this, as commission is still 7.5% and @Zomato is giving additional dis. Food delivery cannot make money in India @maheshmurthy
      Reply

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