Zomato’s New Infrastructure Service To Improve Restaurants’ Order Acceptance & Delivery Rates!

Zomato, India’s counterpart of Yelp, is changing the way people explore restaurants. It is also changing the way restaurants can market themselves and generate more revenue. First, it came out with Zomato Base, a cloud-based POS, and then Project Warp to take on biased reviews.

Now, the company is working on a project called ‘Cloud Kitchen’ as a part of Zomato Infrastructure Service that will allow restaurants to improve their efficiency. Essentially, Zomato will work with current restaurant business owners to expand their business to more locations without incurring any fixed cost.

How will restaurants benefit?

Each location that a ZIS is created, will have 4 or more restaurant brands co-located with each other, leading to shared (and thus lower) costs; each restaurant brand will have its own space of roughly 300 sq ft. These might and might not have a common delivery personnel, depending upon the restaurants.

These combined locations will be like food courts you have in malls or large locations, so that eatery is in one place, thereby reducing rents and more floor space. The company is planning to construct these in non-premium spaces right now and will provide the whole infrastructure from start to end.

Zomato is also looking at the history of areas where restaurants have closed down and will take this data to improve the deliveries in such areas. These ZIS locations will be in places where demand is high, but the quality of service is bad. Most of such locations will be in tier-2 cities and in large cities where mid-income groups live.

The blog post read, “To acquire cooking equipment, we are using Zomato data to identify restaurants which have recently shut down in the vicinity and are acquiring this (almost new) equipment at a discounted value; having said that, we are only procuring the best quality equipment which meets robust safety standards.”

However, Zomato has clarified that it is not getting into the cooking business like its competitors. It will remain a restaurant-aggregator and will continue to increase the business of such services. These services will also decide what kind of restaurants will open where, what will be offered on the menu and what will be the price of the food items.

Who can opt for ZIS?

Only renowned and reliable operators will be eligible to use these kitchens, and a minimum rating on Zomato cutoff will also apply which is unknown. Even existing players who are not able to expand to specific locations can take advantage of this.

Restaurants which use ZIS do not have a lock in period. They are free to walk out (with one month’s notice period) if this is not working for them. Zomato will try to get another brand at the same place. If all of them leave, then it is a completely different story.

Over time, different restaurants will be able to share the kitchen as well, reducing operating costs. Day and night restaurants will be able to efficiently choose their time slots. In fact, Zomato will not even force these brands to opt for Zomato delivery only. They can very well be listed on their competitors. The only motive for Zomato is to increase their sales.

Users can order from different restaurants in the same order

Only restaurants are not in advantage through this service. Even users will be able to order from the multiple restaurants of his/her choice within a ZIS and get delivered different items in the same order. So you can order Pasta from Restaurant 1 and Burger from Restaurant 2 and get it delivered at the same time.

As more of these sprout around, you will have more options to choose from. These restaurants will be listed on other aggregators as well, so you can go ahead with whatever service offers you the best discount and quality.

Zomato’s revenue model will be based on the revenue of these restaurants. They will be taking a certain percentage from these restaurants, so there is motivation for all parties to increase the sales. There is no fixed cost for such locations and restaurants can actually choose to be a part or leave it anytime they want.

Where can you find a ZIS?

A pilot has been started in Dwarka, New Delhi and will start delivering by second week of March. The company plans to take it slow because of unseen risks and will be launching the second such site in the next three months only.

The plan is to have over 100 such sites by 2018, which is not a very ambitious goal. Of course, this requires building such locations where demand is high. Lot of analytics will go into deciding the type of restaurants, locations, prices and deliveries.

It is an extremely clever idea to aggregate multiple brands in one place so that sharing can reduce costs and improve the delivery experience to customers. Watch out for such Zomato’s services around you as the company plans to expand in the next six months.

Source: Zomato