Zomato – Delicious taste of success

The following article is based on my own interpretation of the said events. Any material borrowed from published and unpublished sources has been appropriately referenced. I will bear the sole responsibility for anything that is found to have been copied or misappropriated or misrepresented in the following post.

Ruchi Patel ,MBA 2015-17, Vinod Gupta School of Management, IIT Kharagpur

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Leading online restaurant booking and food ordering application firm Zomato claimed achieving break-even or operating profit in its business across India, Lebanon, Qatar, the United Arab Emirates (UAE), Indonesia and Philippines on Feb 8th, 2016. The company plans to use its profits in operations for organic growth and stay ahead of rivals.

Zomato, co-founded by Deepinder Goyal and Pankaj Chaddah in 2008 primarily as, an online restaurant discovery service which provided detailed information of countless eating places. Providing menu and location coordinates for the restaurant was their USP. Also, they positioned themselves as social network for foodies, which became their mantra to success.

In 2011, they launched android mobile app. This was the first android phone local-search application by an Indian company which allowed users to find nearby eating joints depending upon their location. Moreover, Zomato raised Rs 4.7Cr from Info Edge to be used for marketing and product development.

In 2013, Zomato made its international debut by launching itself in Dubai. Following the suit Zomato was launched in UK, Sri Lanka, Philippines, South Africa, US, Turkey, Indonesia and Brazil with its app and website in Portuguese, Turkish, Indonesian, English and Brazilian languages.

In November 2014, Zomato raised another $60 million in a joint effort by Info Edge, Vy Capital and Sequoia Capital.  In 2015, Zomato stood at a valuation of $1 billion. Also, Zomato started making acquisitions in international market. Zomato made changes in leadership as they hired Surobhi Das as its new Chief Operating Officer (COO). The former COO Pankaj Chaddah started heading the new initiatives including food-ordering and table-bookings. In September 2015, Zomato Media Pvt Ltd., the restaurant review platform has raised another round of $60 million from Temasek Holdings Pte (Singapore) and existing investor- Vy Capital.

After breaking even in 6 markets, Zomato hopes to raise $200 million from new and current investors in April, with Baidu- China’s web services giant leading the round (making it Baidu’s 1st investment in India). The company has expanded to over 100 cities across India, the UK, Ireland, Canada, UAE, South Africa, New Zealand, Philippines, Portugal, Brazil, etc. with a 1 million restaurant database.

Zomato has been successful in acquiring a huge user base in its target segment (i.e. Young population, working professionals looking for information of restaurants). Aggressive and Innovative marketing strategy has aided Zomato in reaching out to its target users. Zomato has been benefitted by High awareness. . Simple and user friendly interface helps them acquire new users that later on turn into a loyal user base.  For most of the young smart phone users it is a Top of the mind product. They have managed to leverage superior technology with a strong workforce of over 1200 people. Zomato has also been backed by strong brand recognition and has won several accolades and awards.

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