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Zomato Looks To Pump Up Revenue With ‘Infinite Dining’ Option

Zomato Looks To Pump Up Revenue With ‘Infinite Dining’ Option

Zomato infinity dining is an exclusive feature for Zomato Gold users

This feature can potentially reduce company’s dependence on deep discounts

Zomato’s dining out business had contributed $49 Mn to the company’s revenue as compared to $155 Mn from delivery vertical

After launching its own food and music event Zomaland, and a user loyalty programme Zomato Gold, the company has now announced another new feature, Infinity dining, to seemingly inspire higher retention among the Zomato Gold subscribers in India.

Infinity dining will allow users to avail unlimited servings of the whole menu at a fixed per person cost depending on the restaurant, according to a company blog. Only eligibility criteria for users to qualify for infinity dining is a Zomato Gold membership, which is priced at INR 599 for a three month subscription. 

Initially, infinity dining option is made available at around 350 restaurants and bars in Delhi NCR, Mumbai and Bengaluru. Some of the restaurants partners of Zomato Infinity Dining include Punjab Grills, Yeti, The Bombay Cartel and more, the blog added. 

In its annual report for the fiscal year 2019, Zomato’s has reported its delivery business to have contributed $155 Mn to the company’s FY19 revenue, as compared to $49 Mn contributed by the dining out business (majorly driven by Zomato Gold).

However, the company had also attributed major portion of its $294 Mn loss in FY19, to its food delivery business in India. The company claimed to be losing INR 25 per delivery as of March 2019, which is 43% less than what the company was losing on each delivery (INR 44) in March 2018. 

Overall, Zomato claimed to have earned $206 Mn in revenue during FY19, as compared to $68 Mn in FY18. Along with a jump in revenues, the company’s expenses have also increased to $500 Mn in FY19 from $80 Mn worth of expenses in the last year. 

If infinity dining leads to increase in dine out customers, Zomato will be able to reduce its reliance on food delivery discounts to drive orders, and also save its delivery logistics’ expense. This way, the company’s promotional marketing expenses can be brought down and  can eventually lead to a hike in the company’s net revenue. Also, the users will benefit from infinity dining when dining in groups or attending office dinners. 

According to RBI Economic Survey 2019, Zomato has raised $370 Mn funding in 2018, as compared to Swiggy raising $310 Mn in funding during the same period. The survey has also noted 2018 as the year of foodtech startups.  Further, a report by Netscribes has estimated the online food delivery market in India to grow by 34-36% from 2015 to 2020.