Zomato

a case study on zomato

1. A case study on Entrepreneur development Title – ZOMATO: An Indian start up acquiring the world Presented By- Shikhar Gupta Himani Sharma Suraj Malik Aditya Bhanot

2. Introduction . Zomato is a restaurant searching platform and discovery service founded in 2008 by Deepinder Goyal and Pankaj Chaddah . It currently operates in 23 countries, including India, Australia and the United States. It is named by foodiebay in 2008 but in 2010 it was changed as ZOMATO. Service provided by zomato i.e restaurant searching , discovery, online ordering and table reservation etc. Employees working in industry 2000+. Users of the consumer service industry is above 19 millions visits monthly It is available in the various language i.e English, Turkish, polish, Indonesian, Spanish, Italian etc. Compititors – Food panda and just eat. Internet and mobile app are the only channel used for the whole process for customers to find a suitable restaurant with better discount deals and place an order

3. HISTORY The service started as “ Foodiebay ” in the cafeteria of Bain and Company. Customer looks up the menus at the lunch hour then then the entreprenuer scan the menus on the websites and the websites have lots of the traffic and was lauched publicly in 2008. The websites cover the delhi NCR restaurants, kolkata and Mumbai. In november 2010 the company renamed as ZOMATO and covers the world. In 2011, Zomato started to cover in Banglore , pune , chennai , hyderabad and Ahmedabad and they launched applications for ios , android, Window phone, and blacberry devices. Zomato expand most of the contries that is the world in 2012 – 2013. In 15th October, 2015 Zomato changed business strategies from a Full-Stack market to an enterprise market. This led to Zomato firing 10% of its workforce which equals about 300 people. Zomato covers over a million restaurants across 10,000+ cities in 23 countries

4. Reasons for upliftment of their business: .To differentiate themselves from their competitors, Zomato concentrated on adding approx. 18,000 new places to eat from . .The key factor for Zomato success is its marketing strategy and in-depth knowledge of their competitors. Zomato aims to be a place where the foodies hangout . .The company has spread in 20 countries with its headquarter in New Delhi, India providing service to over 35 million values customers per month. The list of registered restaurants on the website has increased to 384,100 till March 2015

5. Zomato was based on the simple idea of providing scanned menus to customers, along with contact numbers of restaurants, to enable them to order food over the phone. In a span of seven years, it has emerged as the country’s largest online and mobile restaurant discovery service, with over one million restaurant listings across 500 cities in 22 nations, clocking more than 19 million monthly visits on an average

6. Strategies adopted by Zomato: Cost Leadership Zomato charges restaurants 7% of each order size, compared to 15-20% charged by rivals because of it, restaurants are able to keep their prices low and provide the customers quality food, giving customers an experience of value for money and a reason to come back. 2 . Capital Investment Zomato received an initial investment of Rs.4.7 crore from Info-Edge India in August, 2010. Due to high growth rate of the company, they witnessed an increase in capital fund investment by Info-Edge. Info-Edge subsequently invested Rs. 13.5 crore in September, 2011 followed by a $2.5million and $10million investment in year 2012 and 2013 respectively. By the end of this period, Info Edge almost had 57% share in the company.

7. 3. Business Model Zomato follows a simple business model. While starting afresh in the new city, some number of people is assigned in each city to collect data about the restaurants and clubs around the city. There is a centralized team based out of NCR which processes and cross-checks the data to confirm the validity. The data is then processed to be put up on the website. There is a separate team for advertising, which sells the website to the restaurant owners and attracts them to advertise with Zomato. 95% of the revenues are earned from advertisements from the local restaurants, while the rest can be attributed to event ticketing and restaurant booking. 4. Marketing Strategy Zomato started with direct marketing techniques like SMS and Direct mailers. Through direct SMS, Zomato targeted six lakh unique customers as a first stage. Irrespective of users’ responses Zomato blasted them with 6 SMS per day for one month. Zomato believes it increased their reach with this technique. Next is direct email, where they effectively reached corporate in bulk and hence reached the professional employees which are their primary target. They distributed pamphlets in specific areas. The pamphlets were very specific to their business. They were attractive, colorful and of good quality to customers.

8. 5. Online Food Delivery The next food order that you place from your favorite restaurant online might be delivered to your doorstep by Zomato itself.

9. Right now Zomato promotes itself as Food Network. On Social Media, they follow simple strategies of always be there for your customer and only best content needs to be sent to customers. They treat Face book and Twitter as two different platforms. Twitter is more used . For interaction and conversations and Face book is primarily used to push their content and to reach more people. Once a user logs into Zomato with the help of Face book or Google account, his/her friends will be automatically identified on the site and they can easily follow their friends. As the friends’ ratings are more trusted by users when compared to Zomato’s influencing factor is much higher with the help of social media. Approach towards social media:

10. Challenges faced in online food delivery: 1. Being in the daily meals market, they have to work with very low ticket sizes starting at Rs 50/- with no minimum order requirements or delivery cost. Considering the costs associated with food production, packaging and delivery, maintaining a strong unit margin is the biggest challenge. 2. A very high competition is already present in the market, who have set the parameters to be a successful among customers. 3. Confusion may happen between the restaurant and Zomato which may effect the end customer and the customer has to suffer. 4. Brand Zomato puts its name on stake if anything gone wrong because of restaurants or the delivery will surely effect its image . 5. Keeping track of their competitors. It is always important to know what other brands in the same space are doing since there is a strong overlap in target audience.

11. Strategy suggestions for further globalization : Relevant & Constantly updated information needs hiring the skilled local people, in more numbers at ground level. 2. Local level tie-ups , acquisitions & mergers to support the aggressive expansion plans, requires continuous capital funding as well. 3. Company should try and work with every new country as a separate unit as that will give more flavor of localness, Different Marketing & Promotional campaigns keeping in mind local taste & preferences. 4. Improvised customer engagement on social media to retain brand loyalty.

12. Reason behind success First mover advantage. Strong content platform. Efficient employees Good rating mechanism and social platform.

13. Milesstones of zomato Number of listed restaurant: In 2008-4000 restaurants 2013-94000 restaurants Monthly visitors of visitors: In 2008-0.015 millions 2013-1 millions Yearly Revenues: In 2008-0.06 crores 2011-11.3 crores

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