In a bid to strengthen its position in the food-tech market, Zomato will now stop charging commission to restaurants that bring in high volume of orders.
Explaining about this, Deepinder Goyal, co-founder and CEO of the company, said in a blog that in order to be eligible, restaurants need to meet certain criteria listed out by the company. He said,
Some of these criteria include the number of orders you process with us on a weekly basis, and whether your customers are happy with your food and service.
The move comes after Zomato announced that it has turned profitable across 24 countries. Over the past 18-24 months, Zomato has been on a mode to cap its annual operating cash burn by over 80 percent to ₹77 crore.
Zomato currently charges around 7 percent as commission fees to restaurants under its food ordering business. The charge doesn’t include delivery and payment gateway charges.
The newly introduced programme is likely to cover almost 70 percent of Zomato’s 25,000-restaurant partner network in the country.
On the other hand, Zomato’s biggest rival Swiggy is charging commission fees ranging from 15 percent to 30 percent, which also includes delivery and payment charges.
Zomato claims to have delivered over 3 million monthly orders for the first time in July this year compared to competitor Swiggy’s claims of 4 million monthly orders. Zomato, however, maintains that its average order value is higher than that of Swiggy, resulting in higher gross sales.
The company is currently operating in around 26 countries, and is said to be in advanced talks with Alibaba and its payments arm Ant Financial to raise around ₹12,800 ($200 million) in a new funding round.