500 Words Essay

From Food Deliveries to Super Cloud Kitchens

-Atul Kattakayam
Is Zomato a gold mine in the making? The recent issue of 9375 crore Zomato IPO is
one of the biggest and most awaited ones in the Indian market which has raised mixed emotions
among the investors. Experts and fundamental analyst suggest to abstain from subscription
citing that the company is stuck in a vicious cycle of cash drain. Even though the revenue has
increased from USD 65 million to 368 million from 2018 to 2020, the losses have also
multiplied twenty times from USD 15 million to 304 million during the same period. But there
is one factor by which Zomato can turn from a mere food delivery start-up to create a revolution
in the food-tech space and that is – Data.

Zomato has a database of thousands of restaurants and millions of consumers that uses
the platform to deliver/order food. These data can be used to draw useful insights like the
demand of different dishes in different areas and how they vary across different seasons. As
we say data is the new oil, Zomato can provide consultations to restaurants using these data to
identify the best locations and food options. This brings in revenue for the company as well as
for restaurants that uses its features.
However, the real potential lies behind the concept of cloud kitchens where the
company uses its data to establish own restaurants without outlets. These cloud kitchens are
more efficient as they save up space, initial and operating investments and can serve the
demand of consumers through deliveries at lower rates. Zomato can also provide the space and
machinery for other cloud kitchens to operate together which brings in the concept of super
cloud kitchens that are more efficient as many restaurants can operate in the space of a single
restaurant.

Zomato as an aggregator can also venture into supplying raw materials to all these
restaurants thus gaining control over the entire food chain and turning into a super profitable
business. The automation of cloud kitchens, drone delivery etc. will transform the food-tech
industry in the tech driven future. The interesting fact here is that the company has already
ventured into these curve with the introduction of Zomato Kitchens and Zomato Hyperpure.
The growth trajectory of other similar start-ups in the foreign markets gives a positive outlook
to this business model.

‘Innovation always happens in the next curve and those who look for it owns the future’.
Rather than looking at the present numbers of a company its always better to understand the
story behind it and identify the real potential and invest especially in start-ups as they lose
money and clocks in very little profit while setting or expanding themselves up. Even though
Zomato will be facing tough competition from its competitors like Swiggy and Amazon, its
IPO is the beginning of a next generation food tech revolution in India and can surely be bet
upon!