Platform Aggregators and Revenue opportunities for Brands through alternate channel

Article written in May 2021 (Image source: Medinama)

Summer is here! I remember as a kid, I would visit the nearby ice-cream vendor with my mother to buy an orange bar. Amidst the pandemic peaking here in Delhi-NCR and my cravings for ice-creams, I felt a sudden thrill on seeing I could order Kwality walls on Zomato. This got me thinking on the relationship between platform aggregators, brands and consumer in the changing times. 

Online platforms, or ‘Aggregators’ in today’s world have changed consumer habits and at the same time presented an opportunity for brands with an alternate channel for revenue. Adapting to an alternate channel cuts down on operational costs and drives operational efficiencies for a brand. Among the many stakeholders in this transaction, the key stakeholders are the ABC’s of this cycle, i.e. Aggregator, Brand and Consumer (ABC).

Let’s take an example to see the effectiveness of leveraging an aggregator for the objectives of a brand and the changes this relationship brings to a consumer. Kwality Walls (brand of HUL) setup Zomato Accounts for their ice-cream vendors and through Zomato, the brand has been selling frozen desserts to the customers. For cold chain storage during delivery, soft-gels were used to ensure the product is delivered without melting. The following numbers in a particular district (Gurgaon, Haryana) gives perspective to the depth of influence of this relationship between ABC:

• For an Ice-cream vendor: With a daily order of 25 and an average ticket size/order ~ Rs.200, an Ice-cream vendor earns an income through Zomato of ~ Rs.19K/month with a monthly revenue of ~ Rs.1.5 Lakhs/month.
• For the brand Kwality walls : In Gurgaon, 23 Vendors sell through Zomato and with 25 daily orders on the app, the brand’s revenue through the app ~ 34.50 lakhs/month and total orders/month is ~ 17,250 for Gurgaon district.
• For the aggregator: The total orders in Gurgaon for Kwality walls is ~ 17,250, which ensures engagement with customers in the frozen desserts category. As per Zomato’s 7.5% commission rate, Zomato earns ~Rs.2.6 Lakhs/month in commission from the vendors selling the brand, simply in Gurgaon district.
• For the customer: Total orders of ~17,250/month means customers are beginning to order frozen desserts through a food aggregator and food cravings during the pandemic, have fueled these orders through an aggregator.