IMPACT OF COVID-19 ON ONLINE

FOOD SERVICES: A CASE OF

ZOMATO
Course Name: Business Research Methods

Sl Name PLP Roll Number Section Campus

no. Group
1. Shagun Kshitij 17 IGSM/PG2020/0611 C IGSM

2. K R Remya 17 IGSM/PG2020/0070 A IGSM

3. Aniket Pathak 17 IGSM/PG2020/0615 C IGSM

4. Rahul Mishra 17 IGSM/PG2020/0201 A IGSM

5. Aiborlang G. 17 IGSM/PG2020/0188 A IGSM

Marbaniang

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 TABLE OF CONTENTS

Sl No. Particulars Page No.

1. Cover Page 1
2. Abstract 3
3. Introduction 4-5
4. Literature Review 6-7
5. Methodology 8-9
6. Data Analysis with Results 10-12
7. Findings 13
8. Conclusions 14-15
9. References 15
10. Appendix 1- Questionnaire 16-17
11. Appendix 2- Response Sheet of Data 18-19
Analysis
12. Appendix 3- Raw Data Sheet 20-21

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 ABSTRACT

This is estimated that in the coming future, there will be a rise in the problems which will be
faced by Zomato due to Covid-19. The advanced use of smartphones and the internet resulted
in improving online services. We are talking about online food delivery partners. Zomato is a
digital platform combining restaurants and an online food delivery system which is launched
in the year 2008.

In 2020, when the pandemic happened, we faced so many challenges and also faced many
worst situations. The implementation of lockdown to slow the spread of COVID-19 resulted
badly and affected tourism, transport, economy, and hotel industry.

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 INTRODUCTION

The global pandemic has hit most sectors in the world, severely affecting the entire world’s
economy. India remains impacted by the same, however, a lot of sectors have started picking
up the pace and run as they were before the lockdown hit us.

Food services and online food delivery is one such sector that was initially under the adverse
impact complying to the strict lockdown, dominated by platform like Zomato.

This research paper seeks to study the impact of covid-19 virus on Zomato and how it has
been recovering till date. People had shied away from ordering through Zomato in the earlier
phases due to safety measures and a general inclination towards home-cooked meals, but the
recovery has been faster now, as the norms have been liberal.

Food ordering is a crucial aspect of people’s life these days considering the fast-paced and
busy lives of people in (especially) tier-1 cities. Hence, we perceived the need of knowing
and understanding impact the pandemic had on such a profitable and potential start up as
Zomato.

As per a recent report shared by the company, it said that it had surely impacted the size of
their business but accelerated their journey to profitability. Their food delivery GMV hit
lowest in two years, but they are expecting things to get better with people moving back to
work and colleges from their hometowns as the office are getting reopened.

The rise of online food delivery is a worldwide trend with many countries in the world
having at least one major platform for food delivery. China leads the way in market share for
online food delivery, followed by the United States with the developing markets in India and
Brazil.

The industry has been proactive in developing new markets and cultivating consumers’
eating habits. A survey of 1000 students in year 2019 in Nanjing, China, had revealed that at
least 71.45% of them had used online food delivery for at least two years now and that 85.1%
of them orders more than once a week. These numbers and statistics would surely have
changed considering the pandemic now in all parts of the world.

Globally, all populations have different opportunities to purchase food online owing to
cultural, technological, and economic reasons and to study these, we surveyed over 170
respondents to analyse their online food delivery behaviors in respect to Zomato, with

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the

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main objective of understanding the response of customers towards the online food delivery
services after Covid.

The respondents were asked about their age, occupation and family financial health and their
frequency of online food ordering through Zomato on a per week basis- both pre-covid and
post-covid. They were also asked about their reasons of ordering/ not ordering through
Zomato; what changes, in terms of food quality, did they feel during the pandemic and if the
company itself had well instructed the delivery boys to follow health protocols.

We received fair responses and analysed the results of it by form of data findings and
conclusion, compiled in the later parts of this report.

Objectives of the study

1. Understanding the response of customers towards the online food delivery

services after Covid.

2. Impact of COVID-19 on the online food delivery system in the context of Zomato.

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 Literature Review

The COVID-19 virus outbreak has not only taken the lives of people but also severely
crippled the Economy as a whole. Because of strict protocols and lockdowns, manufacturing
and logistic activities had been suspended. This has affected the supply and demand of many
products and services, resulting in restrictions imposed on distributers (Wholesalers &
Retailers).

According to India today, Corona virus had impacted at least 40% of restaurants and say that
these restaurants may go out of business soon. 10% of all dine-out restaurants in the country
have closed down while 30% are at risk of never opening again.

Zomato had around 4,000 employees in different roles. Seeing the company facing financial
challenges and not being able to go forward, they had to lay-off 13% of its workforce. Costs
grew by 47%, as revenue in the Financial Year 2020 grew by 105% as compared to Financial
Year 2019.

As COVID-19 had impacted the size of the business, opportunity seizes to accelerate
Zomato’s journey to profitability. Since many Dine-Ins were not allowed, Zomato seizes this
opportunity by supplying their services to every corner of India.

Zomato’s Financial Year 2020 India Food Delivery GMV (Gross Merchandise Value) grew
by 108% over Financial Year 2019.

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Zomato had also made a great contribution to society by creating a Feeding Foundation
community which is a non-profit Organisation which aims in solving hunger in the
developing country like India. Like many other non-profit organisations, Zomato Feeding
Foundation wanted to help the daily wager community especially at the time of the Covid-19
crisis, leading every daily wager to starve with hunger across the country. They had launched
a ‘Feed the Daily Wager’ campaign to raise money and provide food support to daily wagers
who lost their livelihood during this Covid-19 lockdown. They collected Rs. 32 Cr and used
it to distribute over 65 Million Meals in the form of ration kits to the Daily Wager
community.

During the initial days of the COVID-19 crisis, Zomato had requested their staff for
voluntary salary cuts. This helped in quickly reducing the costs. Hence 75% of the employees
volunteered for partial salary cuts resulting in 14% reduction in Payroll costs.

There can be some mishaps in the services provided by Zomato but one way or the other it
finds a way to satisfy each individual with its different strategies and management
Techniques. There have been few reports and news in Live Mint, Statista and also on the
company’s own website regarding how covid 19 impacted the company the frequency
of food delivering after lockdown.

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 RESEARCH METHODOLOGY

We have attempted to find out the primary factors that impacts the consumers intention to
order food from online food delivery services such as Zomato. We have conducted this
research study from across metropolitan cities in India. For this exploration, we have chosen
the most suitable methodology which is collecting data through questionnaires. This method
was also used in several empirical studies in the past. The questionnaire was administered
through online mode which is ‘Google Form’ and the link was sent through Whatsapp to the
customers of Zomato. The questionnaire was floated to the customers and we got 172
respondents. Out of the 172 respondents, 93 were from 18-25 years of age, 23 were from 26-
35 years of age and 6 were from above 35 years of age. It is found that people of age group
between 18-25 years are frequents customers of Zomato and order food from the
company and they were mainly students. Majority of the respondents had a family income of
more than Majority of the respondents had a family income of more than 50k per month.
Therefore, from the data, we can conclude that covid 19 has impacted a lot in Zomato but the
company was able to generate revenue even in the pandemic as they started to adapt to the
new rules and protocols.

Development of survey instrument plan

The questionnaire was prepared with the help of the questionnaires prepared in the mentioned
papers. The questionnaire was divided into various segments to capture demographic details
as well as relevant information needed as per the variables for the survey. The questionnaire
had questions based on few open-ended questions, few quantitative based questions etc. we
have collected both primary and secondary data for this research paper.

Sampling plan

The sampling method that we have adopted for conducting this research paper is judgmental
sampling because we have judged the respondents according to our convenient. We floated
our questionnaire to those respondents based on convenient accessibility and proximity of the
research.

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Data collection plan

The data collection for completing the research paper was done through floating Google
Form to the respondents who were suitable for this paper. We also had asked respondents in
person to fill up the form rationally.

Statistical tool used

Following are the statistical tools which was used for the completion of the research
paper are:

 Media and Mode

 Correlation
 Anova analysis

Software used for analysis

 Microsoft Excel

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 DATA ANALYSIS & RESULTS

Data output using descriptive statistics ¡]#⬛¡

We collected a total of 172 responses for our questionnaire out of which 69.8% of
respondents which is 120 respondents were age between 18-25 years and for the rest 20.9%
and 9.3% were age between 26-35 year and above 35 years respectively.

For the second question we asked respondents about their monthly family income, for which
42.4% of respondents which is 73 respondents responded as income above 50k.

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For the rest of 57.6% of respondents we received 22.7% responded as income between
40- 50k,

18.6% between 20-40k and remaining 16.3% as income between 10-20k.

Then we went to know more about their taste and preferences and asked them about
the number of times in a week they ordered the food from zomato before and after COVID-
19

And results came a little shocking to our end as 50.6% of the respondents told that they order
food from zomato almost once or twice in a week where as after COVID there has been

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certain growth in order from zomato.

As the respondents showed the interest in zomato even more after the COVID so we wanted
to know what made them order food much more often from zomato and why they choose
zomato only and not any other delivery partner as well as we also wanted to get the
idea about the food.

So 29.1% respondents responded as proper follow up of protocol made by government which

is being followed by zomato , while 22.1% of respondents specified as reason not mentioned
in the list.

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 FINDINGS

We have studied the behaviour of Zomato users based on the following basis:
 Their age groups
 Income levels
 Frequency of ordering online food pre Covid-19
 Frequency of ordering online food post Covid-19

A total of 172 people participated in the survey, and 69.8% belonged to the age group of 18-
25 years old.
 42.2% stated to have a family income of 50K and above.
 It was surprising to find out that 50.6% of the people ordered food once or twice
before the lockdown, which now has increased to 52.3%, at present. This percentage
has increased instead of going down even after the market conditions and the
stringent norms.
 Zomato has maintained to keep their food quality similar and let it remain unaffected
by the externalities, as 47.7% of the respondents felt no change in the quality of food.
 Only 8% of people said that the Zomato delivery boys never followed delivery
protocols or did not take care of the rules.
 75% of the respondents said they would still recommend Zomato to deliver online
food during the pandemic.

We conducted hypothesis testing and found out the correlation between various variables.
For example, the corelation between age group and how many times a week do they order
food on Zomato at present is positive, with a value of 0.984584819.

The corelation between How many times a week did you order food on Zomato before Covid
19 and how many times a week do they order food on Zomato at present has a value of 1.

We also conducted Annova testing and found out that the F-value is less than F-crit, so
we are accepting null hypothesis.

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 CONCLUSION

The initial stages of the covid-19 pandemic and the ensuing strict lockdown had an
adverse impact on Indian online food delivery companies, broadly dominated by Zomato.
Consumers had shied away from online food ordering due to apprehensions on safety and
a general preference for home-cooked food.

Zomato had over 110 thousand active restaurants on a monthly average during the first
half of the financial year 2020, a significant increase from the previous year. The food
delivery company offered its delivery services in about 500 cities across India with over
200 thousand delivery partners at that time .The food delivery company also launched
‘Contactless Dining’ in India and eight more countries. With Contactless Dining, users can
enjoy visiting a restaurant without touching any menu cards or interacting with the restaurant
staff. Being concerned about the social distancing, Zomato has opted for contact less delivery
and dining to help foodies continue living up their life even when going out is a challenge. It
has been observed that the online ordering has not taken a complete dip and the demand
along with long lasting trust with Zomato Delivery continued with the customers. Perception
of getting infected while ordering online has almost went off with all the precautions taken
by the customers and Zomato.

Zomato continues its operations with leading the market in food delivery. The dine out
facility took a strong hit with lockdown restrictions. It was also noted that the dine out also
increased rapidly in the non- containment zones. Zomato also maintained its legacy of
respecting it’s every employee and didn’t fire any of its employee when lockdown fell off for
an indeterminate period.

Food delivery companies are generating positive contribution margins in FY2021 which can
likely sustain." the COVID‐19 pandemic has ushered in a new threat to the business of food
delivery, which could potentially affect the Online Food Delivery services. However, we
believe Contactless Dining will play a critical role in building confidence for post lock-down
dining out. Users who have opted for dining out seem to enjoy the contactless dining
experience."

With the end of this report, it can be said that Zomato sustained very well with all the hits
taken due to covid-19 breakout. Zomato has been constantly educating its delivery
partners

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on safety and hygiene practices recommended by WHO. The delivery partners also
undergo virtual training sessions on how to perform contactless delivery.

REFERENCES

 https://www.zomato.com/blog/performance-report
 https://www.livemint.com/market/mark-to-market/why-covid-19-
has-been-a-shot-in-the-arm-for-online-food-delivery-firms-
11611558506486.html
 https://www.statista.com/statistics/1126046/india-coronavirus-
restaurant-food-via-food-delivery-apps- impact/#:~:text=COVID
%2D19%20impact%20on%20ordering%2 0restaurant%20food
%20via%20apps%20India%202020&text=Acc ording%20to%20a
%20survey%20about,days%20following%20the
%20survey%20period.
 https://www.statista.com/statistics/1126046/india-coronavirus-
restaurant-food-via-food-delivery-apps-impact/

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 APPENDIX 1- QUESTIONNAIRE

1. Name and Occupation

2. How old are you?
o 18-25 years
o 26-35 years
o Above 35 years
3. What is your monthly family income?
o 10k-20k
o 20k-40k
o 40k-50k
o Above 50k
4. How many times a week did you order food on Zomato before Covid 19?
o 0
o 1-2 times a week
o 3-4 times a week
o More than 5 times a week
5. How many times a week do you order food on Zomato at present?
o 0
o 1-2 times a week
o 3-4 times a week
o More than 5 times a week
6. Why do you order food from Zomato and not from any other apps, during
pandemic?
o Proper follow up of protocols and safety measures
o Low cost/offers and discounts
o Hygienic food
o No touch delivery
o Cashless delivery
o Reason not mentioned
7. During lockdown, was the quality of food same as before Covid 19?
o Yes
o No
o Can't say

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8. Do delivery boys follow proper delivery protocols, as per the company mandate?
o Always
o Sometimes
o Never
9. Would you recommend ordering from Zomato during pandemic?
o Yes
o No

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APPENDIX 2- GOOGLE FORM ANALYSIS

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 APPENDIX 3- RAW DATA

COUNT of
How
many
How many times a
How many COUNT of How COUNT of times a week week did
times a many times a What is What is did you order you order
week do you week do you your your food on food on
COUNT of order food order food on monthly monthly Zomato Zomato
How old How old on Zomato Zomato at family family before Covid before
are you? are you? at present? present? income? income? 19? Covid 19?
21.50 120.00 0.00 46.00 25.00 28.00 0.00 23.00
30.50 36.00 2.00 90.00 35.00 32.00 2.00 87.00
47.50 16.00 4.00 26.00 45.00 39.00 4.00 41.00
5.00 10.00 55.00 73.00 5.00 21.00
Grand Grand
Total 172.00 Grand Total 172 Total 172 Grand Total 172

1-2 week
is the
MODE 90 is max
MEDIAN the most 172/2=86th frequency
Median Mode 172/2=86 frequency used median mode term used
Above
Max 50k is the
times most 1-2 times a
172/2=86th frequency 1/2 times a 1/2 times a frequency week is 76th
term used week week 172/2=86 used term
76th
term is
18-25 between
18-25 year year old 30-40k

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