1. Zomato: An Indian Startup acquiring the world
Zomato initially named as Foodiebay was started by Mr. Deepinder Goyal. It is a restaurant
searching platform providing in-depth details with autonomous reviews and ratings. Foodiebay,
the initial name was changed to Zomato in November 2010 to increase their reach among
people.
Zomato is a restaurant discovery platform providing comprehensive menus, reviews and contact
details for restaurants in 21 cities across the world. Territories include India, USA, United Arab
Emirates, Sri Lanka, Qatar, the Philippines, South Africa and now London. Founded in New
Delhi in 2008, Zomato employs approximately 1000 staff over the globe.
To differentiate themselves from their competitors, Zomato concentrated on adding approx.
18,000 new places to eat from. Along with they also decorated many special features, such as
pointed to particular dishes or opening times”.
2. To be the largest resource in food supply market, Zomato bought urbanspoon, a leading
restaurant service providing portal for $52 million to enter US, Canada and Australia to leverage
local insights and experience and to expand their business in overseas seeing the future goal
and objective.
Vision
To expand in more than 50 countries
Milestone
Number of listed restaurants: in 2008 it was 4000 restaurants which increase to 94000 in 2013
and currently 384,100 in Q1 of 2015.
Monthly visitors of Zomato increases to 35 million in 2014 which was 11 million in 2013 and
0.015 million in 2008.
Yearly revenue of Zomato in 2008 was 0.06 crores which increased to 11.3 crores in 2013.
Spread in 21 countries worldwide.
3. Success Factor:
First mover advantage
Strong content platform
Efficient employees
Good rating mechanism and social platform
Funding from experienced source
Strategy of Zomato:
Zomato works with keen interest on various strategies to achieve their goal. It includes
Financial strategy: To increase their fund and revenue
Marketing strategy: To tap their customers from across the globe
Growth strategy: To grow continuously and increase their customers and page traffic
Globalization strategy: To expand themselves across the whole globe as a leading service
provider
Marketing Strategy
Featured and user friendly website
Global mobile app
Focusing on digital marketing channels for potential customers
Acquire the competitors: To be the largest resource in food supply market, Zomato bought
urbanspoon for $52 million to enter US, Canada and Australia
Sales promotion: Coupons and price-offs
Direct Marketing: Phone call and direct mail
4. In August 2010, Zomato got its first round of funding of $1million from Info Edge, India. And in
September 2011, got its second round of funding of $3.5million from the same financier. Next
year Zomato upraised its third round of another $2.5 million from the same investor and again in
early 2013, Info Edge funded fourth round worth $10 million which gives them a 57.9% stake in
Zomato.
Seeing the future and growth of Zomato, Sequoia Capital and Info Edge, India in November
2013 funded Zomato with $37 million. Info Edge now owned 50.1% of Zomato on an investment
of INR 143 crores. The total funding raised by Zomato till November 2013 stands at $53.5
million.
In November 2014, Zomato came up with a fresh round of funding of $60 million at a post-
money valuation of ~US$660 million. This round of funding was jointly headed by Info Edge
India Limited and VY Capital, with involvement from Sequoia Capital. This made a total funding
of over US$113 million for Zomato.
Recently in a fresh round of funding in April 2015, Info Edge, India has invested an amount of
Rs 155 crore in Zomato.
Info Edge said in a statement “Being Info Edge’s fair share of Zomato’s recent fund raises of
USD 50 million”. Upon completion of the allotment of shares, Info Edge’s aggregate investment
in Zomato will be about Rs 484 crore.
As the website was launched, it became popular soon and expanded rapidly, covering many
important regions of India including Kolkata, Mumbai, Bengaluru and Pune by the year 2010.
Apart from being a service provider within India, Zomato.com now has branched to overseas in
the regions of Philippines, New Zealand, Qatar, South Africa, Sri Lanka, the United Arab
Emirates and the UK as well.
The website covers a list of over 1, 20,000 restaurants across all these regions catering to
more than 15 million customers worldwide. With its headquarter in New Delhi, Zomato.com is
providing career opportunity to over 350 employees all across the globe.
Social media Strategy
Zomato uses different platforms to engage their customers with them.
5. Facebook
There is a huge engagement of customers on Facebook. Zomato has more than 600k strong
Facebook community.
Twitter
Twitter is a place where Zomato is sparkling. It has more than 114 k followers there. Used as a
conversation platform with the customers, Zomato is doing a great job in engaging their
customers on their page. They answers all the queries raised over the platform by the
customers.
Blog
Sharing and updating with all the latest updates is a key point for any organization. Zomato uses
their blog as their mouthpiece to share all the latest updates.
Pinterest
The platform shares the food experience with great content to attract their customers. The
company needs to do a lot of job to make its followers on this platform which will certainly work
in their promotion.
6. Instagram
This platform lets the user share the foodie photographs just by sharing it using the tag #
Zomato. The image automatically gets shared on the microsite.
Success Story
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.
Facebook, Twitter and Pinterest are the 3 main platforms which made the base for the success
of Zomato with a deep presence among their customers. Other than that, Zomato has
extensively invested a lot over SMO’s, SEO’s and has worked a lot to improve its UI and make it
more user interactive. Side by side with a goal to branch globally, they also invest much on TV
ads to bombinate Zomato.
Pankaj Chaddah, the co-founder of Zomato agreed, “ads on the mobile app have changed the
revenue game for them”. More than 50% of their total traffic comes from their mobile apps.
“Using location-based services to target ads around a consumer’s physical location helps make
this decision easier” said Chaddah.
Sanjeev Bikchandani, co-founder of Info Edge and Zomato’s largest shareholder said, “the firm
will focus on segments such as online food ordering, restaurant booking, subscription-based
services and billing inside of restaurants”.
7. It all started in an office cafeteria five years ago in Delhi, India. Zomato's founders used
to sit with their colleagues and stare at the same five menus from restaurants near their
workplace. Bored with the limited choice, they started collecting restaurant menus and
placed them on a website. Four years and fourteen cities later, Zomato was ready to
spice up the UK food market.
The India-based restaurant discovery service set up in London with help
from London & Partners.
Business aim
As part of its global expansion plans, Zomato saw an opportunity to enter and dominate
London's restaurant review and bookings market. But the company needed a trusted
partner to help it understand the sector, establish an office and recruit the right staff.
London & Partners services
Finding an office: introductions to serviced office providers; guidance on office space in Tech
City
Recruiting staff: advice on salaries, recruitment and work placements
Market intelligence: providing information on London restaurant, hotel and venue listings
Professional services: advising on accountants and legal firms
Business success in London
Zomato set up its sales team in London in November 2012 and launched its website just
three months later in January 2013. By April 2013 the London operation had 16,900
restaurants on its books and employed nine people. It is on track to employ 25-30
people within three years.
8. In their own words
What advice would you give a company trying to expand to London?
“Take advantage of the resources that the Government provides. London & Partners
and UKTI have been brilliant. And take advice from London & Partners about who you
should be talking to. The teams at London & Partners have very deep knowledge of the
industry. We were able to verify what we were doing by talking to them.”
What difference did London & Partners make?
“We wanted to be ‘in market’ a few months before the summer. If we hadn’t had their
support we wouldn’t have launched before June 2013. Regarding choosing London over
other cities, I think we would have still considered London but it would have moved
down the priority list.”
What is Zomato?
“We are a restaurant discovery platform providing in-depth information including
independent reviews and ratings. It’s a one-stop shop for diners and offers a way for
restaurants to differentiate themselves. We are funded by advertising and do not take a
cut of bookings. It’s proved to be a big success world-wide.”
London & Partners can introduce companies like yours to hundreds of vetted
professionals. Who did they introduce to you?
“They connected us to the right people. They put us in touch with office spaces and
lawyers. They also sent recruitment companies our way so we could also find talent
very quickly.”
Why expand to London?
“London hit the sweet spot for us. It’s a very significant market but there’s no dominant
player. We are confident that we can become that dominant player. London has a lot of
websites where you can book a meal online but 85% of bookings are still done on the
phone. We aim to change that.”
The UK capital offers a springboard to global growth. Where next?
“We already have 16,900 London restaurants on our site. We had hoped to break even
within 12-18 months but I’m confident that we should break even in London within six
months. We will develop the London market first and move to the European market from
there.”
London offers one of the largest concentrations of ICT expertise in the world.
Have you exploited this?
“London has a very big talent pool. I don’t think we would have been able to ramp up in
the same way in our home market. We don't rely on users to post reviews; we are an
independent platform so hired interns from the London School of Economics to visit and
review each restaurant.”
9. Londoners are among the most technologically sophisticated consumers in the
world. Was this a factor?
“Yes. The customer here is very educated. They appreciate that we offer an
independent content platform and they are accustomed to being online. London is a
huge market.”
London & Partners is expert at helping overseas companies like yours set up in
London. What did you think of the service generally?
“They helped us get all the practicalities out of the way so we could get on with the
business. It seems like easy stuff but when you are entering a new market as a foreign
company these are huge challenges. They got our office up and running in 24 hours.
London is one of the easiest places in Europe in which to set up a new company.
What do you think?
“In terms of regulation, London is a walk in the park. Coming to London was so much
easier compared to other cities. We had a lot of support from London & Partners.
Payroll…bank accounts…what normally takes three months took one week.”
Zomato UK CEO Pramod Rao explains: “For four years India was our main focus. For
the next phase we realised there were other markets where our product would fit in and
there was a need for it as well. So we started expanding in September 2012 last year.
We looked at English speaking countries or places with similar demographics to India."
Although the UK market looked tasty, Zomato ran into lots of competition. It needed to
stand out. “With our campaign, we wanted to bring out the key aspects that
differentiated us from the rest of the market. Our model is completely different from our
competitors as we rely on ourselves when it comes to content such as listings
information,” he says.
Before every launch, Zomato collects data. The team visits restaurants, takes pictures
and uploads the menus. “We can then socially build on that with people adding their
own reviews. No other player has such a comprehensive database. So we try to build a
social community around food,” Rao says.
The business model clearly stood out from the crowd, but what problem was Zomato
trying to solve? “From a user point of view, our product could come across as just
another website that has come onto the market. So we wanted to make the discovery
aspect crystal clear. With our campaign, we focused on discovering 18,000 new places
to eat. But we also highlighted special features, such as searching for particular dishes
or opening times,” he adds.
10. The Strategy
Rao pinned down three major factors that would make the campaign a success: in-
house PR, community engagement and the right timing.
Zomato believed its staff could talk most passionately about the brand. This is why Rao
kept the PR in house. He explains: “We wanted to do our marketing efforts internally
because we personally wanted to build relationships with the media over time. If you
change from one agency to another, you lose that contact. It’s about taking a friendly
approach when it comes to PR. It was definitely cheaper to do it ourselves as well.”
Simultaneously, Zomato built a social media community. It reached out to bloggers
every week, collecting valuable feedback and improving the product. As most of the
marketing was done in house, it was also important to get a taste for the media’s
11. opinion.
Six months in, Zomato had been cooking up ideas with the online community side-by-
side. At this point, half a million users were coming onto its website every month.
Zomato’s recipe was going to plan. Now it was time to launch its campaign to increase
brand visibility.
“We had a good momentum going, so all we needed was that push to make the next
stage a success. We felt the timing was right. The feedback had been integrated, our
product was very good and we had a strong user base. We wanted to take it to the next
level, which meant more people should know about Zomato,” Rao says.
In order to reach the greatest number of hungry commuters, timing was very important.
Rao explains: “We could have run the campaign in July, but many people would have
been on holiday so we decided to wait until September.”
Zomato’s campaign resembled a tightly run kitchen, with Rao as its head chef, knowing
exactly what results he’d like to see served up. “We wanted a three-fold increase in
website traffic, but we also focused on mobile apps. We weren’t looking at a three-fold
increase, but were hoping to have the amount of downloads doubled.”
The Execution
The next step was to take a closer look at its users. “We noticed that in London at least
95 per cent of our users take the Tube at some point. So we considered that would be
the best way to reach out to them. We also saw that 70 per cent of our users are young
professionals who work for corporations. When looking where to advertise, we selected
the City and Canary Wharf because they were Zomato’s most popular subzones,” Rao
explains.
The £500,000 campaign also enticed people by advertising its tasty wares through other
mediums. “From the total budget, a significant amount went on Tube advertising. But we
also decided to advertise in print. So we ran ads with The Evening Standard, City AM,
The Wharf and outer-London trade publications,” he says.
For the company’s online campaign, Zomato used a display ad platform and
behavioural targeting to get its message out. “From the categories that we selected, we
focused primarily on food blogs and online communities. We also targeted people
whose online behaviour showed an interest in food and e-commerce websites. While
food websites ensured relevance, the e-commerce sites were added so that we could
12. target people who have a certain disposable income and can afford eating out.”
But the heat almost got too much in the kitchen, as the team struggled to decide on its
main message. “Our initial USP was that we had lots of rich content. But we also liked
the simple message explaining how we started. Up until the deadline we had several
messages in place. In the end, we decided to forget about everything and go back to
basics,” Rao says.
To get Zomato’s ravenous followers to share the company’s content, a friendly tone was
considered the best way forward. “Our social media strategy never involved too much
talking about the product itself. The posts on social media, especially on Facebook, are
more about showing our humorous side. People prefer to share that content. Our main
intent was for people to link Zomato with restaurants and food.”
The Outcome
The campaign ran for two and a half weeks, leading to some tasty results. “We saw a
five-fold increase in the number of reviews that were submitted; 70 per cent of those
came through the mobile apps. The numbers were significantly higher than in India,
where we saw a two-fold increase in reviews after our campaign,” Rao says.
The mobile apps proved particularly popular. “The apps were being downloaded much
more, which pushed up the rankings and the amount of people interacting. From a user
point of view, that was the biggest indication that outdoor advertising impacted user
interaction. When you’re in the Tube you don’t have connectivity, so to see such an
increase is great.”
After the campaign, the apps shot through the ranks. The Zomato iOS app is now
placed at number eight in the food and drink category, having jumped from slot 84 in
under two weeks. The company’s web traffic has also increased from 5 per cent to 10
per cent week-on-week. When looking at the complete 10-month period, Zomato has
gone from zero to 20,000 restaurant listings, 700 to over 700,000 unique monthly visits
and from zero to 12,000 restaurant reviews.
Big food brands have also become more receptive to Zomato’s services. “The bigger
brands are getting to know about Zomato, which is a good sign. Many have been e-
mailing us, asking to update their listings or for a meeting to discuss what more can be
done on Zomato,” he says
The Analysis
13. Looking back, Rao would have liked to get more for his money. “This campaign was
only focused on brand visibility. But ideally I would have also done a campaign with a
call for action. In some time we will start to think about doing that.”
The challenge Zomato now faces is to maintain the impression it has made. “The main
objective of brand visibility we’ve achieved. Now the campaign is over, the challenge
lies in sustaining our impact. So we’re refocusing the campaign to make sure that
happens. We’ve visited restaurants and put over 2,000 stickers up to ensure that the
campaign is prolonged over time,” Rao says.
For Zomato’s next campaign, the company will be going back to the whiteboard to
explore what zero-cost marketing efforts it can use. “It’s about PR, putting stickers up in
restaurants and getting more bloggers on board. We’re also looking at further
expanding within the UK. So for 2014, our budget will be invested in city expansion,
improving content and doing events related to food.” So expect more results to be
served up, coming to a city near you.
In News
Zomato Media Pvt. Ltd, which owns the eponymous restaurant search portal and app,
said on Monday that it has had acquired Seattle-based bar and restaurant guide
Urbanspoon in a move that gives the Gurgaon-based company a toehold in the
competitive US market.
The company did not disclose the size of the all-cash deal.
For Zomato, founded in 2008, the US acquisition—estimated at between $50 million
and $60 million according to a person with direct knowledge of the matter—marks its
most ambitious move.
It puts the company in direct competition with Yelp Inc. and other similar restaurant
search and review apps.
Zomato plans to invest $50 million in the US to stay in the game and expects to
overtake Yelp within 12 months.
“Usually it takes us 12 months to penetrate a market and be the market leader; however
in this case we would like that to happen sooner,” said Pankaj Chaddah, co-founder of
Zomato.
14. Zomato, which has thus far raised $113 million, said it will raise more in the next three
to six months.
“Our biggest differentiator will be content. We have much better and relevant content
and we will continue to follow the model of collecting and publishing the content
ourselves rather than crowd-sourcing it,” said Chaddah.
Yelp crowd-sources menus, contact details, and pictures.
Urbanspoon, one of the largest restaurant guides in the US, is Zomato’s sixth
acquisition in the last six months. In December, Zomato acquired Italy’s Cibando for an
undisclosed amount.
The deal also establishes Zomato’s presence in Australia and Canada and enhances its
position in the UK and New Zealand, countries where Urbanspoon has a presence.
It helps Zomato expand its presence to 500-plus cities in 22 countries and increases its
restaurant coverage from about 300,000 to more than one million.
According to Zomato, its traffic will more than double—from nearly 35 million visits per
month to more than 80 million visits per month—as a result of the acquisition, making it
the largest restaurant search company in the world.
“Our US entry has been on the cards for a while now, and we’re delighted to be doing
so by welcoming Urbanspoon into Zomato. It has a strong presence in the US and the
UK, and also dominates restaurant search in Australia and Canada,” said Deepinder
Goyal, co-founder and chief executive (CEO) of Zomato, in a statement.
The US will not be an easy market to crack, said Sandeep Ladda, technology leader at
PricewaterhouseCoopers India. However, given the core advantages and competencies
that Zomato has built, the acquisition puts Zomato in a “win-win situation”, Ladda said.
An integrated entity (Urbanspoon with Zomato) will be an additional layer of competition
for Yelp, he said.
Zomato will soon integrate the two products and Urbanspoon’s traffic will move to
Zomato.com. Launched in 2006, Urbanspoon was founded byAdam Doppelt and was
sold to Internet conglomerate IAC in 2009. It currently has 50 employees in the US.
According to Zomato, the entire Urbanspoon team will join Zomato and the integration
will take place over the next three months.
15. “Zomato has experienced phenomenal growth in recent years, and our customer bases
complement each other’s perfectly,” Urbanspoon’s CEOKeela Robison said in a
statement.
In December, Mint reported that Zomato was looking to expand its international
presence by entering 15 more countries including the US in 2015.
Founded in 2008 by Goyal and Chaddah, Zomato has received investor backing
from Info Edge (India) Ltd, Vy Capital and Sequoia Capital. Info Edge currently owns
over 50% in Zomato.
Zomato is currently valued at $660 million.
Zomato’s larger vision is to be a one-stop shop for everything from restaurant discovery
to restaurant payments, Chaddah said in an interview in December. The company will
soon be introducing a payment option in the app in some markets, including Dubai.
However, it will take some time to implement this in India.
For the year ended 31st March 2014, Zomato posted a loss of Rs.37.2 crore on revenue
of Rs.36.11 crore. For the previous year, the company posted a loss of Rs.10 crore on
revenue of Rs.12.30 crore.
Blog
http://blog.zomato.com/
References
http://www.letsintern.com/blog/zomato/
http://www.socialsamosa.com/2012/07/zomatos-social-media-strategy-explained-
interview/
http://www.digitalvidya.com/blog/top-7-content-marketing-case-studies/
http://www.livemint.com/Consumer/LKn4cGrmrQwLdrirZvixnK/Zomato-enters-US-with-
Urbanspoon-acquisition.html
http://www.slideshare.net/manoharguptha1/from-zero-to-zomato-in-five-years
http://dsim.in/blog/zomato-an-indian-startup-acquiring-the-world/
http://invest.london/about-us/case-studies/zomato-case-study
