PASSIONATE ZOMANS

GROUP 10
063/2018 - ANKIT SHARMA
064/2018 - SHUBHRIKA TYAGI
065/2018 - KRISHNA SHARDA
066/2018 - PUNEET DANG
067/2018 - ABHISHEK BHARDWAJ
068/2018 - RISHABH WADHWA
 ABOUT
Zomato is a name which provides for human’s very basic need called food. It is an application which provides a
complete information to the users about the restaurants and food joints for over 1.4 million restaurants in around 10000
cities across 23 countries. It is a restaurant searching platform and discovery service founded in 2008 by Mr. Depinder
Goyal and Mr. Pankaj Chaddha. They have faced numerous challenges right from its inception to its expansion. Now the
focus lies on further expansion in 27 more countries.
ZOMATO was initially named foodiebay in 2008 but later on, the name changed to ZOMATO in 2010. Its functional
and main revenue generating cities in India have been New Delhi, Mumbai, Bangalore and Pune. The competitors have
been FoodPanda and Just Eat. It has carved a name for itself through proper customization of services, taste and
language. It has more than 2000 employees working on whom nearly 35% of the revenue expenditure is spent.
It has heavily worked on customer satisfaction and happiness by providing them with very user friendly products and a
fully maintained platform. They are now aiming to become a go to restaurant discovery service across the globe and the
company is heavily working on its business strategy to achieve its vision.
 BUSINESS MODEL OF ZOMATO
ZOMATO follows a very simple, specific and structured business model. It has always been solely dependent
on advertising. With strong focus on mobile, the concentration started in building a business app. Right from
the entry into a new city, some people are assigned in each city to get the data on its clubs and restaurants.
There is a centralized team which processes and cross checks the data to confirm the validity. This data is
then further processed and cross checked. This data is then processed to be put up on a website. Here, there is
a separate team for advertising which sells the website to the restaurant owners. This further attracts them to
advertise with ZOMATO. This helps in generating a huge amount of revenue. i.e. 80% of the revenue is from
the advertisements.
This resulted in the evolving of product offering which was further followed by the expansion of the product
portfolio in 6 products. E.g. Zomato for business, Zomato Order etc. The focus was on building a seamlessly
integrated dining experience. Zomato was not handling the logistics of the actual delivery of food but was
acting as a facilitator between the consumer and the restaurants offering home delivery. Charging of a
commission from the restaurant acted as a additional source of income.
 BUILDING AND GROWTH
OF ZOMATO
ZOMATO was started to fulfill one of the most basic needs of people i.e. food. The structured and specific was of
its implementation led to its huge success. The growth of ZOMATO was noticed by a venture capitalist MR.
Sanjeev Bikchandani, the founder of Naukri. Com , Shiksha. Com and Jeevansaathi.com. He liked the idea and
services of ZOMATO and invested around 1 Million dollars in seed funding through his company Info edge ltd.
And repeatedly invested 4 times. The accumulated amount reached 25.4 million dollar and increased the share of
Info Edge to 50.1%.
Now they started working on the website information in order to rebrand Zomato’s previous name Foodiebay as
Zomato. An official app of Zomato was made which first successfully ran on Android, then Windows and finally
IOS. By 2015, this app developed further covering 180500 restaurants in 36 cities and 11 countries.
The revenue also started increasing significantly from 2 crore to 11.5 crore from 2012 to 2013. The regular updation
of food and restaurant kept customers highly satisfied, thereby, also providing them a competitive advantage.
Finally by the end of 2013, there was a huge expansion in Zomato’s scale of operations and it was able to access 23
countries covering 300000 restaurants.
 SWOT ANALYSIS
STRENGTHS – 1) First mover advantage
2) High area coverage
3) Evergreen Industry
4) In depth Knowledge of food
5) Excellent Funding Available
6) Innovative Market Strategy
7) High number of users

WEAKNESSES- 1) High Competition

2)
OPPORTUNITIES 1) Scope for further expansion
2) High adoption of internet &
smartphones
3) Technology development
4) Possibility of Acquisitions

THREATS 1) Intense Competition

2) High Possibility of Replication
 “ BUSINESS STRATEGY
1) ACCURATE DATA - They aim at getting the fresh and exhaustive information and make sure that their team
works on this “market focusing” in order to prove to be highly relevant and reliable for
customers. It helps them in developing a product for the customers which they love.

2) BRANDING

3) COST LEADERSHIP
- They rely heavily on their branding through various social media platforms. ”
- Of each order size, Zomato charges restaurants less as compared to the other rivals. Hence, it
helps them in keeping the prices low and providing food, thereby ensuring value for money.

4) CAPITAL INVESTMENT - Zomato has always relied heavily on huge capital investment. This has paved them good
results as well. E.g. Nearly 5 crore by Info Edge Ltd. Followed by another 13 crore, 2.5
million and 10 million dollars.
 EXPANSION STRATEGIES

• For the expansion, they entered into new markets after seeing the product market fit. They always aimed at
acquiring the existing strong players in the market to leverage their brands and local food knowledge and
preferences.
• Hence, the expansion in Europe was one of the key areas of Zomato
• One of the examples was the acquisition of Urban Spoon for 52 million Dollars. This gave them an entry into
Australia, USA and Canada
• It also brought six other restaurant search companies which helped them to enter New Zealand, Czech Republic,
Slovakia, Poland, Italy and Turkey.
 MARKETING STRATEGY
• Community Engagement - They went out to bloggers every week for their opinions which acted as a valuable
feedback for improving their product in addition to building relations with the
media.
• Online Campaign - Behavioral Targeting was one of the methods adopted by Zomato to spread tis
message. The primary focus was on food bloggers and various online food
communities as these would be the one who would be most benefitted from the
product and the ones who were most likely to use it.
• Message spreading - They spread the message by adopting an innovative strategy. Instead of focusing on
the product, they started focusing on the humorous side of it. Here, the main focus of
branding was relevance.
• Friendly Approach - Zomato came up with a very different approach for customer interaction. Here, the
aspect was to be there for your customers when they needed you just like your
friend.
 COMPETITIVE ADVANTAGE

1) SIMPLICITY - The model of Zomato as mentioned earlier was very specific, simple and structured.
There were various companies like Snapdeal, Trip Advisor and JustDial which came
up with same agenda but faded away because of their complex structure. But
Zomato sailed easily by rightly targeting food and restaurant segment.
2) IMPORTANCE TO - Zomato offered customers to have an access to all restaurants through a database,
THE USER types of food menu, location of the eateries and most importantly, their feedback
and reviews. Also, “on the go mobile apps” also provided convenience, easy
interface, presence on social media like Google Plus, Facebook etc contributing to
increase in information and revenue.
3) THE RESTAURANT - Another competitive advantage which Zomato enjoyed was in the form of Restaurant
FINDER finder. It was available both on website and as an app and soon became a boom.
People found it very useful to browse, find nearby restaurants etc.
 FINANCIAL DATA
Investments – Zomato was growing at a phenomenal rate. In 2011,
After taking 2.5 billion dollars from investors, it spent 2 billion
dollars on buying a New Zealand’s Menu Mania. In 2014, it also
aimed at spending another 2 billion dollar in another project for
further expansion. EXPENSES
40
35
Expenses – They spent only 3% on internet related expenses, 35% on
30
manpower for their business analysis, 35% on advertising and 25
promotion. A substantial part was also passed on to the share holders 20
at the rate of Rs. 2.5 per share in addition to an approved dividend of 15
1.5 Rs. per share. 10
5
They also suffered from losses at a particular point of time when had 0
Internet Manpower Advertising Investors
to spend a huge amount on these expenses. E.g. When Zomato
founders got a money of 226 crore, as a result of losing financial
autonomy beaucse of increase in the share of investors, they had to
go for public shares.
 CHALLENGES
1) LANGUAGE - Currently, Zomato is available only in English. Hence, it creates a language barrier as there are
various people who are not very comfortable with the language. So, it creates a barrier for them
to access Zomato.
2) INNOVATION - Zomato has so far been accessing a growth and expansion strategy. However, in order to survive
in the coming era, it would require to be innovative. Secondly, the path break through
innovation would also help Zomato in having its stance in various continents where it has
established itself.
3) THREAT OF - Just like in Singapore, where the restaurants refused to disclose their menus leading to an
NON DISCLOSURE increase in the number of losses. So, for further expansion, it all depends upon the response, the
company gets from the stock exchange from public investment.
4) NO MEDDLING - Its major investor wouldn’t meddle much with the takeovers of Zomato mainly because of a fear
WITH TAKEOVERS of eating itself and because of primarily being a venture capitalist.
5) SKILLED - Zomato in the coming times would be requiring highly skilled manpower to come and prove
MANPOWER themselves within a week of all the expenses paid.