Inside Zomato’s Monetisation Stack: Where The Margins Come From In Food Delivery

Before 10-minute deliveries, dark stores and quick commerce wars, there were red-shirted Zomato riders racing across cities with pizzas, biryanis and Chinese food parcels in their delivery bags.

Over the years, that image became so omnipresent that food delivery and Zomato started feeling interchangeable. Much like “Google it” became a substitute for searching the internet, “Zomato kar lo” became a synonym for ordering food.

The company itself saw a high degree of success, and food delivery took it to the bourses single-handedly in 2021. However, the spotlight gradually shifted when Zomato acquired Blinkit (formerly Grofers) a year later, in an all-stock deal worth ₹4,447 Cr completed in August 2022.

As the quick commerce arm stood first in the race of 10-minute delivery, the name Zomato still stood stronger as the brand identity. In 2025, founder Deepinder Goyal restructured the parent company to form Eternal, with Zomato becoming the flagship, and Blinkit a close second. 

But under the Eternal umbrella, Zomato’s role became even more clear. It was to be the mature business that generates profits to support long-term investments in Blinkit, District and other areas.  

In Q1 FY27, Zomato’s food delivery business contributed ₹3,100 Cr to Eternal’s consolidated revenue of ₹20,211 Cr, accounting for just 15.3% of the company’s top line. Zomato is no longer the chief earner for Eternal. That baton has passed on to Blinkit, which brought in ₹15,664 Cr in revenue in comparison. 

But when it comes to profits, Zomato is well ahead, as we will soon see. 

This is why Zomato holds quite a lot of value for Eternal. It is the lynchpin of the business. But what are the various ways in which it is earning that profitability? Is it just about platform fees, or do other revenue streams play a role? First, the numbers so you have the context. 

Zomato’s Growing Profitability Is Pivotal

On paper, it would appear that the business that built the company has been overshadowed by the one it acquired. But revenue share doesn’t always tell the full story.

Despite accounting for a smaller slice of Eternal’s revenue pie today, food delivery remains the business most consumers associate with the company. Zomato’s food delivery business processes over ₹10,700 Cr worth of orders every quarter and serves more than 27.2 Mn monthly transacting customers.

Despite contributing just 15.3% of Eternal’s revenue in Q1 FY27, food delivery contributed ₹606 Cr to Eternal’s adjusted EBITDA, 6X more than Blinkit’s ₹102 Cr. That’s not pure profit but the gap is clear. 

On a per-order level, Zomato is more profitable than Blinkit currently.  

Further highlighting this is the fact that food delivery also delivered a 5.6% EBITDA margin on a net order value basis compared to Blinkit’s 0.6%. 

In the past two years, Zomato’s adjusted EBITDA has grown almost 128% from ₹912 Cr in FY24 to ₹2,079 Cr at the end of FY26. In comparison, its revenue has seen a 31% increase in that same time period. 

In the most recent Q1 quarter, Zomato’s food delivery business continued its steady growth trajectory and raked in an operating profit of ₹621 Cr. Zomato’s revenue increased 13% QoQ and 37% YoY to ₹3,100 Cr.

Let’s break this down further. 

How Zomato Earns Today

The revenue brought in by Zomato is often seen as a collection of delivery fees. But that’s a simplistic take. 

Every time a customer places an order on Zomato, multiple transactions unfold simultaneously, and even the way the customer arrived at the menu and the items they ordered might determine how much of the revenue Zomato takes. 

Consumers pay for convenience, restaurants pay for access to demand. That’s the basic foundation of the Zomato marketplace. Everything else is a bonus, but the bonuses can take on a life of their own if this core marketplace is running smoothly. 

Bonuses in this case include upselling higher quality services to restaurants, bringing them on to the food advertising programme, bringing other advertisers on board at key UI touchpoints, getting sponsors in for moment marketing or seasonal promotions and getting consumers to pay for additional benefits. 

None of this works if the marketplace does not fulfil its key promise. And even here, Zomato has squeezed in a direct monetisation lever in the form of platform fees. 

There’s a middle layer, which are the gig workers, which we will come to later. But this is the basic premise that many would be familiar with. 

The biggest contributor to this revenue stack is the commission, or service fee, that restaurants pay on every order processed through the platform. While the exact fee varies depending on factors such as the restaurant’s location, size and services availed, the proposition is straightforward — Zomato brings demand.

For restaurants, especially cloud kitchens and small eateries, the platform acts as a customer acquisition engine, connecting them to users without requiring them to invest in their own ordering infrastructure, marketing or delivery fleet.

This value proposition becomes even more compelling when viewed through the lens of scale. In Q1 FY27 alone, Zomato’s food delivery business served 27.2 Mn average monthly transacting customers and worked with more than 3.28 Lakh active restaurant partners. For a restaurant, getting that reach independently would be nearly impossible.

On the other hand, consumers contribute through delivery fees and platform fees. Delivery charges compensate workers for the convenience of getting food delivered to their doorstep. The tips paid by consumers are said to be directly passed on to gig workers. 

It is the per-order platform fee that has proven to be a game changer. Introduced in August 2023 at ₹2 per order, Zomato’s platform fee has steadily increased over time and now the company charges ₹14.9 per order in most major cities.

We have already written about the role of platform fees in the consumer services and ecommerce space, which is a direct monetisation push because here Zomato — and others too — stand to make a fixed sum of money even if the overall order is less profitable or loss-making. 

Platform fee is among Zomato’s cleanest monetisation levers because it adds a fixed amount to every eligible order without requiring a corresponding increase in delivery effort.

Overall, the company has earned around ₹995 Cr from platform fees since they were introduced in 2023. In Q1 FY27, this brought in ₹154 Cr, or just under 5% of the revenue in the quarter. That’s not an insignificant chunk.   

Stepping back a little, Zomato’s monetisation story began long before it started delivering food. The company was originally built as a restaurant discovery platform, helping users find places to eat through menus, reviews and ratings. Zomato continues to offer this service and run a high-margin revenue stream — advertising.

Today, restaurants can pay for sponsored listings on a cost-per-click (CPC) basis, typically ranging from ₹5 to ₹15 per click, helping them appear higher in search results and category rankings. For greater visibility, brands can also run banner advertisements priced between ₹30 and ₹300 per 1,000 impressions. With more such plans under its advertising business, this stands as a leading revenue stream for Zomato.

The final layer comes from subscriptions such as Gold, priority deliveries and other products upsold to a regular Zomato user. While membership revenue forms a relatively smaller part of the business, it plays an important strategic role by encouraging customers to order more frequently, improving retention and deepening loyalty to the platform.

In comparison to the average order value on Zomato, the ₹30 that the company typically charges for a three month Zomato Gold subscription seems a trivial amount for the most active Zomato users. 

Together, these revenue streams ensure that a single food order generates value from both sides of the marketplace. Customers pay for convenience, restaurants pay for demand, and advertisers pay for visibility, allowing Zomato to monetise far more than just the act of delivering food.

The High Cost Of Delivering Convenience

Despite all those revenue levers, the food delivery business is fraught with unpredictability in terms of costs.

For all the commissions, platform fees and advertising revenue that Zomato earns, food delivery remains one of the most crucial costs incurred by the platform. The last-mile food delivery requires adequate logistics, which is one of the largest cost components for the parent entity. 

Unlike traditional ecommerce, where products can be shipped in batches, food delivery requires a rider to fulfill every order individually within a limited time window. This means delivery partner payouts remain directly linked to order volumes, distance travelled and demand conditions. 

While Eternal did not disclose the bifurcation for Zomato’s expenses standalone, the consolidated delivery and related charges  for the June quarter this year increased 68.5% YoY to ₹3,150 Cr  from ₹1,869 Cr in the same quarter last year — indicating growing cost incurred for gig worker compensation and end mile logistics.

The industry is also witnessing growing scrutiny around gig worker welfare increases. In recent years, policymakers have proposed social security frameworks for platform workers, while states such as Rajasthan and Karnataka have introduced legislation aimed at extending benefits to gig workers. 

On this, Eternal said that the labour codes and the Karnataka legislation have not had a material impact on its financial performance so far. However, it added that the financial implications of the remaining provisions will only become clear once the corresponding rules and regulations are notified. 

Apart from logistics, customer acquisition is another persistent pressure point for Zomato.

As the food delivery competition intensifies, Zomato continuously invests in advertising, discounts and loyalty programmes to acquire new users and retain existing ones. The parent entity has spent ₹945 Cr on advertising in Q1 FY27 against an expense of ₹671 Cr under this head in the same quarter last year. 

At the same time, restaurants are becoming more vocal about platform economics. Over the years, restaurant associations have repeatedly pushed back against commissions, visibility charges and other fees levied by food delivery platforms. For Zomato, increasing monetisation too aggressively may impact the very partners that power its marketplace. 

Zomato can increase monetisation through commissions, ads and visibility products. But if it pushes too hard, restaurants may resist, build direct ordering channels or support lower-commission rivals.

Last year, Zomato was also in talks with restaurants to collect feedback and consider alteration in its commission structure. However, nothing concrete came out after that.

Why Food Delivery Is Still Eternal’s Flagship 

Now that you have a clear understanding of how Zomato earns every penny, here’s why its profitability matters at the Eternal scale. 

We spoke about the dynamic shift in Zomato’s journey in the past five years. For most of its history, Zomato was not the food delivery segment in Eternal, but the entire business. 

It was the business that went public in 2021, and the investment thesis at the time was straightforward. The company was riding India’s food delivery wave, acquiring customers, increasing ordering frequency and expanding its restaurant network. Food delivery was the only business worth investing in at the time of the IPO. 

In 2022, Blinkit was acquired by Zomato, sowing the seeds for Eternal in the future. Deepinder Goyal is a close friend of Blinkit founder Albinder Dhindsa as was well known in the startup ecosystem, and there were natural synergies between Blinkit’s quick commerce model and Zomato’s food delivery. 

The ensuing quick commerce boom in 2022 more or less vindicated this notion. And it compelled Deepinder Goyal to take the step to rebrand to Eternal. Blinkit was the revenue leader in no time, at least when compared to Zomato’s own revenue. 

But even though Zomato contributes 5X lower revenue than Blinkit, it is the stability point for Eternal.

This distinction becomes particularly important when viewed against Eternal’s current strategy.

The company is aggressively expanding Blinkit’s footprint through new dark stores, higher inventory investments and deeper penetration into smaller cities. During its Q1 results, Eternal announced an expansion of Blinkit’s dark store network, adding 200 net new stores during the quarter to take its total count to 2,443 across the country.

While these investments have helped quick commerce become Eternal’s largest revenue contributor, they also come at a cost. Building and operating a nationwide quick commerce network remains a capital-intensive exercise, requiring continuous spending on infrastructure, inventory and customer acquisition.

The QIP at the tail end of 2024 helped offset some of the costs associated with this expansion spree since early 2025, but Eternal has had to dip into its cash reserves, which are no doubt healthier because of Zomato.  

On the other hand, food delivery has largely moved beyond the land-grab phase. With a mature restaurant network, established customer base and improving monetisation levers such as platform fees, advertising and memberships, the business has become far more predictable in its economics.

In many ways, Zomato plays the role of a stabiliser within Eternal’s portfolio thanks to its maturity, as other segments, such as Blinkit, and we haven’t even touched on how the Zomato brand pull is critical for other verticals such as Hyperpure, Nugget and District as well. 

Not the focus, is on improving this profitability and pulling all the levers to their limits. The company has relied on platform fees, advertising and memberships to improve margins, and we believe there will be a significant focus here as well as category expansion. 

Most recently, this manifested itself in the form of the healthy food subscription offering launched by Zomato. 

New Competition, New Leadership

Chief rival Swiggy, meanwhile, continues to see significant room for category expansion. In FY26, the company reported its strongest food delivery growth in nearly four years, with GOV growing 22.6% YoY and annual adjusted EBITDA crossing ₹1,000 Cr. At the time, CEO Sriharsha Majety attributed this growth to initiatives centred around “selection, speed and affordability”, including products such as Toing and 99 Store.

The competitive landscape is also evolving beyond the Zomato-Swiggy duopoly.

Over the past year, newer entrants such as Ownly have attempted to disrupt food delivery by promising restaurants lower commissions and consumers lower prices. Their pitch is simple — reduce platform take rates, pass the savings on to customers, build brand loyalty and create a more restaurant-friendly marketplace.

However, Zomato is unconvinced by the model.

In his Q1 FY27 shareholder letter, Eternal CEO Deepinder Goyal argued that these platforms are largely offering the same restaurants, similar delivery times and lower menu prices funded by lower commissions and delivery fees. According to him, the customer traction generated by such platforms is primarily price-driven and lacks a structural advantage that can sustain the business over the long term.

He further mentioned that Bistro by Blinkit is Eternal’s answer to the problem these platforms are attempting to solve. Food delivery at the ₹50-150 price point cannot be made sustainable merely by lowering commissions or delivery fees. Instead, it requires fundamental innovation in the supply chain itself, Goyal added.

But Goyal has stepped aside from day-to-day operations at Zomato and Eternal, and Dhindsa is leading the way. 

It’s a new reality for Zomato, where not only is it in the unfamiliar place of having profits to rely on, but yet its position is not completely comfortable. The challenge now is balancing the interests of customers, restaurants, delivery partners and now even shareholders as it settles into a profitable life. 

[Edited By Nikhil Subramaniam]

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