Zomato, the online food delivery giant, has experienced tremendous growth over the years, expanding its operations to 24 countries and over 10,000 cities globally. However, managing such a vast delivery network with hundreds of thousands of orders per day posed significant logistical challenges. To address these issues, Zomato invested heavily in developing a robust inventory management system that streamlined its supply chain operations.
The Evolution and Expansion of a Food Tech Giant:
Zomato was founded as FoodieBay in 2008 by Deepinder Goyal and Pankaj Chaddah who worked for Bain & Company. The website started as a restaurant-listing-and-recommendation portal. They renamed the company Zomato in 2010 as they were unsure if they would “just stick to food” and avoid a potential naming conflict with eBay.
Later, Zomato announced the acquisition of Blinkit on June 24, 2022, for a total price of Rs 4,447 crores in equity. The board of Zomato has authorized the purchase of up to 33,018 equity shares of Blink Commerce Pvt Ltd from its shareholders for a total purchase price of Rs 4,447.48 crores, according to Zomato’s letter to the BSE
In its initial years, Zomato and Blinkit faced significant hurdles in managing inventory across its decentralized warehouses. With a rapidly growing customer base and an expanding product catalog, the company grappled with stockouts, overstocking, and inefficient distribution. These challenges not only led to dissatisfied customers but also incurred substantial operational costs.
Zomato and Blinkit relied on traditional methods of inventory management, which proved inefficient and error-prone as the company scaled rapidly and recognized the need for a more sophisticated approach.
Understanding the Zomato/Blinkit Seller Ecosystem:
At the heart of Blinkit’s seamless operations lies its robust seller ecosystem, designed to facilitate smooth interactions between sellers and the platform. The journey begins with Blinkit’s seller onboarding process, where aspiring sellers are welcomed into the Blinkit community and guided through the steps necessary to establish their presence on the platform. This onboarding process is meticulously curated to ensure that sellers are equipped with the knowledge and resources needed to navigate Blinkit’s dynamic marketplace effectively.
Once onboarded, sellers seamlessly integrate their inventory and product listings into Blinkit’s platform, gaining access to a vast network of customers eager to engage with their offerings. Blinkit’s integration process is designed to be user-friendly and intuitive, enabling sellers to showcase their products to a broad audience with ease.
Changes in the Inventory management systems and the way forward:
One of the key components of Zomato’s inventory management strategy was the adoption of real-time tracking and analytics. By integrating advanced sensors and IoT devices into its delivery fleet, Zomato could monitor the location and status of each order in real time. This data-driven approach enabled the company to optimize delivery routes, minimize delays, and ensure timely order fulfillment.
In 2017, Zomato became increasingly aware of the pain points of database management. With over 17.5 million customers, 220,000 restaurant partners, and 350,000 delivery partners at that time.
“Zomato was expanding at a remarkable pace,” said Abhishek Jain, senior software engineer, “We realized that it would be prudent to migrate all our self-hosted clusters to a managed platform, which is when we integrated with MongoDB – A NoSQL Database which is used to manage huge volume of unstructured data.
Using features such as index suggestions, geospatial queries, and analytics nodes, MongoDB helped many of Zomato’s key operational systems:
- The Order Tracking system covers live order statuses as well as live locations of delivery partners.
- The Order Assignment system is one of the most critical components of the entire system. The Order Details system displays items and quantities for each order to ensure smooth fulfillment.
- The Delivery Partner Expected Earnings feature combines key information such as a rider’s location, their distance from the partner restaurant and customer, and the type of transport used.
- The Featured Restaurants system is what most people see when using the Zomato app. A key marketing tool, it creates bespoke campaigns and offers and suggests local restaurants to users.
- The Delivery Partner Onboarding system simplifies the onboarding process by collecting and storing drivers’ names, addresses, driving licenses, vehicle types, and more.
Zomato’s Tech Stack
One critical tool, the Delivery Partner Location System, is central to Zomato. With thousands of riders on the streets of India continuously publishing their locations at very high rates, flexible and responsive persistent storage is vital.
Furthermore, Zomato leveraged machine learning algorithms to forecast demand patterns accurately. By analyzing historical data, customer preferences, and external factors like weather and events, the company could anticipate surges in demand and adjust its inventory levels accordingly. This proactive approach helped Zomato avoid stockouts and minimize waste, resulting in significant cost savings and improved customer satisfaction.
Another critical aspect of Zomato’s Inventory Management System was the implementation of a centralized order management platform. This platform seamlessly integrated various stakeholders, including restaurants, delivery partners, and customers, facilitating real-time communication and collaboration. Restaurants could update their menus and inventory levels instantaneously, while delivery partners received optimized route assignments based on real-time traffic conditions.
Final Impact and Statistics:
The impact of Zomato’s inventory management system on its business growth has been remarkable. According to the company’s financial reports, the implementation of these advanced systems contributed to a 40% reduction in operational costs and a 25% increase in order fulfillment rates. Moreover, customer satisfaction scores soared, with over 90% of customers reporting on-time deliveries and accurate order fulfillment.
Zomato’s growth numbers reflect the success of its inventory management strategies. In the fiscal year 2022, the company reported a staggering revenue of $1.8 billion, a 73% increase from the previous year. The number of active delivery partners grew by 54%, reaching over 350,000, while the average order value increased by 12%, indicating higher customer satisfaction and loyalty.
In conclusion, Zomato’s investment in a robust inventory management system has been a game-changer, enabling the company to efficiently manage its massive delivery network and meet the ever-growing demand for online food delivery services. By leveraging cutting-edge technologies and data-driven decision-making, Zomato has not only streamlined its operations but also achieved remarkable growth, solidifying its position as a market leader in the highly competitive food delivery industry.
