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Zomato’s Earnings After #LogOut Campaign: Have Protests Eaten Into Growth, Revenue?

Zomato’s Earnings After #LogOut Campaign: Have Protests Eaten Into Growth, Revenue?

Have the protests by restaurant owners and controversies around Zomato impacted its numbers?

Zomato claimed that it has expanded food delivery services to 500 cities and managed around 214 Mn orders

Zomato Gold has registered 180% increase with 1.4 Mn users, the company claimed

Despite a year marred with controversies and protests, Zomato has recorded a 225% rise in revenue in the first half of FY2020. According to the company’s biannual report, it has registered $205 Mn in revenue, compared to $63 Mn in the first half of last year.

The report also mentioned that there has been a 40% decline in Zomato’s EBITDA (earnings before interest, tax, depreciation and amortization) loss from March to September 2019. The company has also pointed out that its monthly burn rate, which measures at what rate a company is losing money, is down by 60%.

Zomato’s Service Expansion And Gold Revenue

Zomato claimed that it has expanded food delivery services to 500 cities and managed around 214 Mn orders during this time. The gross merchandise value (GMV) has also increased to $821 Mn in H1 of FY2020 from $254 Mn in H1 of FY2019.

The foodtech unicorn has also announced that its order volume in the top 15 cities has doubled in the last year, while the other cities contribute to over 35% order volume. Zomato has also recorded an increase in the average user order frequency from 3.1 in H1 FY2019 to 3.6 in H1 FY2020. The average monthly transactions also increased from 3.6 Mn to 11.2 Mn in the same time frame.

Despite facing issues with the restaurant partners, Zomato has registered an increase of 177% of restaurant partners after getting an additional 73K restaurants on board. In the H1FY20, the food aggregator and delivery startup has around 119K restaurants, compared to 43K last year.

The controversial Zomato Gold service, which provides free food and drinks on orders in select restaurants, has registered 180% increase with 1.4 Mn users, according to the report. Zomato claimed that it has also expanded its Gold services to 54 new cities globally. Moreover, the exclusive dining-out membership programme was expanded to its food delivery options last month.

Zomato Reels Under #LogOut Protests

Zomato has been under the scanner of various restaurant associations for its policies and deep discounting technique over the past few months. In August 2019, more than 300 restaurants started a #LogOut campaign protesting against Zomato’s Gold programme.

The restaurants, registered on this platform, also raised concerns over the food deliveries, contracts with partner restaurants and the heavy commissions the platform was charging.

Moreover, the National Restaurant Association of India (NRAI), a restaurateurs body with five Lakh members, backed the campaign. Other organisations, like the Federation of Hotel and Restaurant Associations of India (FHRAI), had raised concerns regarding the policies and business structure of the platform.

Amidst the protests, Zomato was forced to shut down its Infinity Dining service that allowed customers to enjoy unlimited food and drinks at a particular price.

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