EBDI INDIVIDUAL ASSIGNMENT

Zomato and its success storyAn entrepreneurship venture which aims to become the google of food industry

Submitted by

Chirag Garg

Section B

140103050

It was a very pleasant evening and I was out with my friends. We decided to go out for dinner at a very renowned restaurant. It was situated on out-skirts of the city and hosted

few of the finest cuisines you can manage to get throughout the city. We made a reservation to the place at around 8pm. Incidentally, we reached half an hour late to the restaurant and when we asked for our place; they informed us that currently there is no vacant seat and we might have to wait for another hour or so before we can have a place. We got really furious

arguing how could it possibly happen when we made an advanced booking. Anyhow, we waited till there was a place for us, for 1.5 hours exactly. We made our orders and the food arrived in next 10-15 minute. We were shocked to see the quality of the food served; as if the leftover of the day were just passed on to us after some garnishing in order to give it a

better appearance.

We could not tolerate this anymore and we called up the manager to lodge a complaint. We got infuriated and got up to leave the place when suddenly the person sitting at the table

next to ours stopped us and mentioned: “Do write a review of your experience at the restaurant on Zomato to prevent other customers from facing the same.” We left the place. We emphatically wrote a review of the restaurant at Zomato and were surprised to see the

number of people who either seconded or supported our review.

The sort of response we received on our review was like a bolt from blue. Zomato, for all those who have not come across it yet, is an online restaurant search and discovery service

which provides information on home delivery, cafes, and restaurants along with menus, photos, reviews and contact details for credibility. It was started by two Indian Institute of

Technology, Delhi alumni Deepinder Goyal and Pankaj Chaddah in the year 2008 as Foodiebay.com as a listing of eateries in Delhi’s restaurant hub Hauz Khas.

ABOUT THE COMPANY

Zomato is an online restaurant search and discovery service providing information on home delivery, dining-out, cafés and nightlife in cities of India and 32 other countries. Started as Foodiebay in 2008 the company has witnessed impeccable growth over the past few years. Zomato never had an early-mover advantage. There were players like burp.com, dineout.com, placetodine.com. The driving factor behind their growth is the aggressive new country launch approach; this helped them enter the market at the right time and acquire a substantial market share.

It is one of the few companies to have acquired a global player named, Urban-Spoon to enter into the USA market.

Backed by Infoedge as it first investor it began generating revenue through selling online ad spaces to restaurant owners. As a medium for increasing revenue the company diversified in 2014 adding two more business verticals namely, “Zomato for Business, a subscription sales based model” and “Online Ordering” to their gambit.

Ad-sales: These are the sales made for the ad spaces available on the Zomato website. There are multiple ad slots/locations on a webpage, each having different price for itself.

The prices also vary with the location of the restaurants. For eg- A headline banner on the webpage for a south Delhi restaurant may cost as much as Rs 30,000 per month, whereas a normal side window ad for an east Delhi area may cost very less. The STMO under consideration is from ad-sales.

Zomato for Business: It’s a platform giving the restaurants the freedom to control their content on their webpage to some extent. This helps them target their audience on Zomato through a single application such as providing current offers, replying to reviews etc. It’s a subscription based model, where the payment can be done for a fixed period; so much so that the amount per month is debited directly from their account.

Online Ordering: It’s a new initiative supported through the mobile app and website. Still in its nascent stage, it only contributes to 2% of the revenue as of now.

Zomato White Label: Also known as BAKE is a service provided by Zomato to the restaurants helping them make their own mobile apps based on pre-set templates.

Search and discovery: The search and discovery section began by offering listings in major cities in India and now lists over 1 million restaurants across 22 countries. Zomato helps

Business Verticals

Ad- Sales Zomato for Business

Online Ordering

Zomato White Label

users make dining decisions by providing a variety of information (ranging from the basic like cost and popularity to the more minute like Wifi access and whether the place is pet friendly) to help them narrow down their choices. One can also search restaurants by location, dish, cuisine and establishment type.

Zomato also has a variety of social features. It encourages its users to share their recommendations in the form of reviews, photos and ratings for restaurants with others. Further, you can tag friends in your reviews and photos. Also, you have the option to mark restaurants as Been There, or on the app, Check-in. Your activity appears chronologically on your profile in the form of your Foodie Journey. You can also choose to follow foodies (in your city, or otherwise) so that you can read about their experiences in your Feed. Similar to personal Feed, there is a feature called City Feed, which showcases user reviews and photos, realtime so that you can know what's popular at that moment. You can also bookmark your favourite restaurants so that you're always updated on the happenings like events, promotions and specials.

Bringing together the discovery and social aspects of Zomato, the website and app also have a feature called Collections. Collections are theme based discovery search to help users make a choice. The themes are tailored to each city and are based on popular search categories (eg: Kickass Burgers in Delhi, Great Eggspectations in Melbourne, and Mexican Magic in Seattle). For a restaurant to feature in a category, it needs to be popular with the users in terms of reviews and ratings.

Zomato mobile app: Zomato is a food application which is currently available in 22 countries worldwide, with more locations on the way. If you’re a food person and like to know about new openings and where to go for decent food and where to avoid, then Zomato is something you’ll find very useful.

Reviews are posted by other food enthusiasts and food bloggers, whether for a living or something they do on the side from their day job. With over 30 million foodies worldwide it is a great way to interact with other users and read their restaurant reviews.

The app has recently been re-launched with new features which make it even simpler and fun to use. On the home page you’ll find different options from ‘trending this week’ to ‘new openings’ to ‘boozy brunches’, so whatever you’re in the mood for there will be something you can find.

Zomato has created a search function you can use, so whichever part of a city you’re in you won’t get stuck locating somewhere to eat. The app also has a ‘nearby’ function to make it even easier. You just select the nearby option and a list of eateries and bars are listed that are close by, informing you of distance, cost, cuisine etc. Another great function is being able to draw an area on the map yourself, which lists all the food venues within this area.

Each user has their own profile and the more reviews you post and more photos you upload, determine your foodie status, from foodie to connoisseur. You can choose to follow your favourite users, check in to restaurants and tag people who have a profile on Zomato. Like other social networks you have a feed page, so when people you follow post a new item you can comment and like them.

Each review you write, Zomato gives you the option to automatically post on your Twitter feed and a link to your blog, if you have one, is incorporated at the bottom of the review. You can also connect with friends and accounts on Facebook and Instagram.

What I love about the Zomato app is the simplicity and how easy it is to navigate. It’s current, has up to date information and I enjoy the social side of it too.

HISTORY

The website Foodiebay.com was started by Deepinder Goyal, an IIT Delhi graduate. The journey to the present-day Zomato started as a small exercise to help his colleagues negotiate huge stacks of menu cards with ease. It was in 2008 when he was working with Bain and Company, a management consulting firm, when he put all menu cards in his

office on the internet. Deepinder’s juniors from college, Pankaj Chaddah, Gunjan Patidar (who are now Chief Operating Officer and Chief Technology Officer respectively) and Amar, joined him in building the database. Foodiebay officially started in July 2008 with a list of 1,200 restaurants in the Delhi NCR region. This database expanded to 2,000 restaurants by end 2008. Within the next six months, Kolkata and Mumbai were included on the website.

In 2010, the website was named among the top 25 most promising internet companies in India by the SmartTechie Magazine. By June 2010, the website broke even and had expanded its reach to Bangalore and Pune. That is when Infoedge, the parent company of the Naukri.com group, invested 4.7 crore (US$1 million) in the business.

In November 2010, Foodiebay.com was renamed Zomato.com. The brand name was changed due to a possible move outside of the food vertical and also to avoid a possible conflict with eBay, because the earlier brand name Foodiebay contained ‘ebay’ in it. By 2011, Zomato launched coverage in Chennai, Hyderabad and Ahmedabad. Also in 2011, Zomato launched applications for iOS, Android, Windows phones and Blackberry devices.

Zomato also launched a print version of the content on the website in collaboration with Citibank in May 2012. The guides were marketed and sold under the name "Citibank Zomato Restaurant Guide". During the launch, these guides were made available for four cities in India—Delhi NCR, Mumbai, Bangalore and Pune. As per press reports, Zomato got around 2.5 million visitors on its website in March 2012.

In September 2012, Zomato expanded to its first overseas location by launching its services in Dubai, UAE. This was followed by quick expansion into Sri Lanka, Qatar, the United Kingdom, and more recently, the Philippines and South Africa.

The company launched in Auckland and Wellington in New Zealand in July 2013, and Hamilton in December 2013.[17] It made its way to Turkey, Brazil, and Indonesia in November 2013, with its website and apps available in Turkish, Brazilian Portuguese, Indonesian, and English.[18]

2014 was a year full of expanding international reach and acquisitions. In April, Zomato launched its services in Portugal. In July, Zomato made its first acquisition by buying New Zealand's Menu-mania for an undisclosed sum. In August the focus was on Europe. The company acquired online restaurant guides Lunchtime.cz (from the Czech Republic) and Obedovat.sk (from Slovakia) for a combined $3.25 million. In September, Zomato acquired Poland-based restaurant search service Gastronauci for an undisclosed sum. In October, Zomato finally entered North America by launching its services in Canada. Shortly after, in November, it extended its reach to Lebanon and Ireland as well. In December, Zomato acquired leading Italian restaurant search service Cibando.

Zomato started 2015 by acquiring Seattle-based food portal Urbanspoon for an undisclosed sum. The acquisition marked Zomato's entry into the United States, Canada and Australia, and brought it into direct competition with Yelp, Zagat and OpenTable. In the same month,

Zomato also acquired Mekanist, one of Turkey's largest restaurant search players, in an all-cash deal that makes Zomato the most exhaustive restaurant search service in the country. he acquisition increased Zomato's coverage from about 27,500 restaurants in Istanbul and Ankara to more than 50,000 restaurants across Turkey.

In October 2014, Zomato introduced a new logo — the Zomato heart, which in February 2015 was updated to the Urbanspoon's Spoon logo in Zomato red. This was done to ensure that the transition for users from Urbanspoon to Zomato was easier. As per press reports, Zomato now attracts 90 million monthly visits.

Zomato has recently also broadened its reach and acquired companies that focus on other aspects of restaurant businesses. In April 2015, they acquired a 4 year old Delhi based startup MapleGraph that built MaplePOS, a cloud-based point of sale product for restaurants. Zomato renamed the MaplePOS product to ‘Zomato Base’. MaplePOS was Zomato’s first acquisition of a restaurant-focused product outside their core business. In the same month, Zomato also acquired NexTable, a US-based table reservation and restaurant management platform. Together, NexTable and Zomato will launch Zomato Book, a table reservation system for merchants

The Story behind How Foodiebay became Zomato

One afternoon, in the last week of November 2010, Deepinder Goyal and Pankaj Chaddah went for lunch at a cafe in the Ambience Mall in Gurgaon, a satellite town outside Delhi. The visit changed the way the two gentlemen thought of their business.

It had been three years since Goyal and Chaddah had set up Foodiebay.com - a website that posted hundreds of restaurant menus, reviews of eating joints and recommendations.

As the two walked the mall, they realised that most of the people visiting the mall did not even know about the eating joints that dotted the mall's fourth floor. Wouldn't it be great if restaurant names and their menus were available to people on the move? The co-founders discussed as they dug into their lunch.

After they returned to work, they summoned their chief technology officer and asked him to build a restaurant application that people could access on their smartphones.

Over the next month and a half, two things happened - Foodiebay metamorphosed into Zomato, and a Zomato application became available for Google's Android operating system. Zomato doesn’t mean anything, it's just a word that rhymes with tomato! (Easier to relate with food, and remember)

The app was launched around the time the smartphone wave was picking up in India. Since then, about eight and a half lakh Zomato applications, or apps, have been downloaded on Android phones, BlackBerry, Windows Phone and the iPhones. The app currently has 35,000 menus.

Right now, the smartphone app does not make any money for the company but is a novel way to increase stickiness amongst users.

Marketing and Sales Strategy of Zomato

Zomato believes in having strong content on their website; they believe in first hand data collection for their portals. Hence, they do not need to spend a lot of money on Ad words as search engine optimisation gives them an upper hand over their competitors.

Listing of the restaurants is free of cost on the website. Thus adding a free clientele base which could be further explored for revenue generation based on various offerings and products which may include paid listing for better visibility.

As a part of their strategy they believe in BTL marketing compared to ATL marketing. Collateral such as door stickers, tent cards, badges etc. are widely distributed to restaurants as a part of the strategy.

The posters put in the restaurants have barcode scanning options linked to the mobile app, which can provide instant offers if applicable.

Certain restaurants have specific offers for customers where they can like/follow/review the restaurant on the app for discounts or free meals.

Regular foodie meets are organized in restaurants which help the foodie community connect with each over meals, where discussions and reviews take place, thereby helping Zomato market itself as a brand that values its users. This also helps in marketing the restaurant where the meets are held.

In developing markets, events such as restaurant summits are held, which provide a common platform for the hospitality industry to come together for discussing and deliberating upcoming trends.

The sales team at Zomato are believed to be the backbone of the organization that bring in revenue for the company and act as brand ambassadors as well as relationship builders. They are trained to become the face of the organization as they are regularly in touch with the key stakeholders who are the restaurant owners helping them market and sell products that the company provides. They not only bring business to the company but also promote it in the market.

Reasons for Success

Zomato is striving to make it easier for people to share and discover good places to eat – which is something very basic to human nature. We all want good food. At Zomato, they provide an opportunity to work on something they believe in – something that solves a problem, something that provides value, and something that matters.

Zomato website, its simplicity, its robustness, it’s beautiful web design and super easy to use UI. (Cheers for the development team)

Working at Zomato will give you an opportunity to:- work with an experienced and a talented team on challenging products used by millions of people- work with latest cutting edge web and mobile technologies (Apps, Web 2.0) and be part of the exciting internet and mobile revolution- work with amazing techies and learn how to get stuff done

Another reason is its amazing reach to connect to customers by building Applications for Blackberry, iOS, Android, Windows phone.

Zomato’s amazing work culture and the facilities they provide.o The employees do cool things that mattero When you want people to think creatively and push the boundaries of what’s

possible, their workspace shouldn’t be a drab maze of beige cubicles. Their offices have become well known for their innovative, fun and—some might say wacky—design. Like most of their decisions, data shows that these spaces have a positive impact on productivity, collaboration and inspiration.

o They always wanted Zomato to be a place that brought together smart, talented people from a diversity of backgrounds, and where you could bring your whole self to work.

Their mission is to organize the world’s information about restaurants and leisure and make it universally accessible for all