AT and in November 2010 was renamed as Zomato.

AT
A GLANCE:

 

BRAND: Zomato

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YEAR: 2008

FOUNDER: Deepinder Goyal and Pankaj Chaddah

CEO: Deepinder Goyal

HEAD QUARTERS: Gurgaon,
Haryana, India

INDUSTRY TYPE: consumer
services

SLOGAN: never have a bad meal

OPERATING COUNTRIES: 23

 

INTRODUCTION:

Zomato is an online discovery
guide for restaurants, bars, pubs and clubs and for dine-outs. The registered
users are required to post reviews and rate (on a scale of 1 – 5 stars) the
restaurants on the basis of their choice, visit and experience. The website
helps in defining the restaurant/pub/club on the basis of presence or absence
of air conditioning, smoking area, WIFI Internet, stag entry, live performances
and outdoor seating or whether non-vegetarian food and alcohol are served or
not. Zomato also provides information related to cuisines served, operation
timings, approximate cost of meal for two, credit cards accepted or not.

 

 

HISTORY:

The service
began as Foodie bay, and in November 2010 was renamed as Zomato.

Between
2010-13, Zomato raised approximately US$16.7 million from Info Edge (India) giving them a 57.9% stake in Zomato.

By 2011,
Zomato launched in Bengaluru, Pune, Chennai, Hyderabad and Ahmedabad and introduced smartphone applications. With the
introduction of . xxx domains in 2011, Zomato also launched zomato.xxx, a
site dedicated to food porn. The company also launched a print version of the
website content, “Citibank Zomato Restaurant Guide”, in collaboration
with Citibank in May 2012,
but it has since been discontinued.

In September
2012, Zomato expanded overseas to the United Arab Emirates, Sri Lanka, Qatar, the United
Kingdom, the Philippines, and South
Africa. In 2013, the company
launched in New
Zealand, Turkey, Brazil, and Indonesia with its website and apps available in Turkish, Brazilian Portuguese, Indonesian, and English. In November 2013, it raised an additional US$37
million from Sequoia
Capital and Info Edge (India).

In April
2014, Zomato launched its services in Portugal. In July, it made its first acquisition by buying
Menu-mania for an undisclosed sum. The company pursued other acquisitions such
as Lunchtime.cz (from the Czech
Republic) and Obedovat.sk (from Slovakia) for a combined US$3.25 million.

In September,
Zomato acquired Poland-based restaurant search service Gastronauci for an
undisclosed sum. In October, the firm launched its services in Canada. Shortly after, in November, it extended its reach
to Lebanon and Ireland as well. In
December, it acquired Italian restaurant search service Cibando.

In November
2014, Zomato completed another round of funding of US$60 million at a
post-money valuation of ~US$660 million. This round of funding was being led
jointly by Info Edge and Vy Capital, with participation from Sequoia Capital.

Zomato
acquired Seattle-based food
portal Urban spoon for an estimated $60 million.

The
acquisition marked the firm’s entry into the United
States, Canada and Australia, and brought it into direct competition with Yelp, Zagat and OpenTable. In the same month, the firm also acquired
Mekanist in an all-cash deal.

April 2015
saw another round of funding for Zomato, led by Info Edge, Vy Capital and
Sequoia Capital, this time of US$50 million. In September 2015, Zomato raised
another US$60 million, led by Temasek, a Singapore government-owned investment company, along with Vy
Capital. Zomato’s total funding to ~$225 million which comes from a close set
of four investors: Info Edge, Sequoia India, Vy Capital, and Temasek Holdings.

In April
2015, Zomato acquired Delhi based startup Maple Graph that built MaplePOS.
Zomato renamed the MaplePOS product to Zomato Base. In the same month, the firm
also acquired NexTable, a US-based table reservation and restaurant management
platform.

In February
2017, Zomato in a company’s blog had explained the concept of cloud kitchen.
With its cloud kitchen, the company will help the restaurants to expand their
presence without incurring any fixed costs.

In September
2017, Zomato claimed that the company had “turned profitable” in the
24 countries it currently operates in. Furthermore, Zomato announced that the
“zero commission model” is to be introduced for partner restaurants.

Zomato
narrowed down its losses by 34% to ?389 Cr for the financial year 2016-17, from Rs
590.1 Cr crore in the previous year 2015-16.

HISTORY OF BRAND ZOMATO

Zomato started as the website
Foodiebay.com, by DeepinderGoyal, a post-graduate from IIT Delhi. Foodie bay officially
started in July 2008 with a list of 1,200 restaurants in the Delhi NCR region.
This database expanded to 2,000restaurants by end 2008. Expanded its reach to Kolkata,
Mumbai, Bangalore and Pune within the next six months That is when Info Edge
(India), 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 possible move outside of the food vertical and
also to avoid possible conflict with eBay, because the earlier brand name Foodie
bay contained ‘eBay’ in it.

GEOGRAPHICAL COVERAGE

By 2011, Zomato’s coverage
reached Chennai and Hyderabad as well. In 2011, Zomato also launched applications
for iOS, Android, Windows Phone and BlackBerry devices. 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, The Philippines, South Africa, New Zealand, and more recently
to Brazil, Turkey and Indonesia.

OVERVIEW

Brand Elements

Brand Name: Zomato named after
Foodie bay to avoid conflicts with eBay. It is an arbitrary brand name (no
relationship with the company/product)

Brand Tagline: “Discover more
places to eat around you”

Brand Logo: Simple and classy

 

PESTLE Analysis of Brand

·       
Political

The political situation in India is favorable for Zomato. Accompany
entering a global market is always prone to political risk.

·       
Economic

ü
Global expansion
requires the firm to raise more funds

ü
The banking system is
different, so setting up bank accounts and carrying out transactions also takes
time to settle.

·       
Social

It was difficult to operate in a new language while also trying to reinvent
their operations.

 

·       
Technological

Superior technology allows Zomato to better meet the needs of their customers
in ways that competitors can’t imitate.

 

POSITIONING STRATEGY OF BRAND ZOMATO:

The brand/website is very
popular and common these days among the youth especially, since they want to
experiment new places to dine-out or enjoy with their friends and family. Such
experiments require reviews.

Positioning Zomato has a
presence in 11 countries and lists more than3,00,000 restaurants. Its website
gets 15 million visits month. It has a very strong online presence along with below
the line to TV advertising to remain on top of the user’s mind. The sheer
amount of content aggregated daily sets them apart from its competitors and
gets connected to their customers.

Zomato is present across all
social platforms such as Facebook, Twitter, Pinterest and Google Plus which
allows it to keep interacting with its customers base on a regular interval and
communicating the fact that Zomato is for the love of food and is the first
place to reach out to when it’s about food.

Engaging stuff on Twitter
(#FoodieFriday quiz) has worked very well, TV advertisements for New Year
Ticketing in December were very aggressively implemented and established Zomato
as a brand to watch out for among both users and merchants. Getting involved
with users, especially the ones who are very active on Zomato, with physical
activity like the Food Sprint in Delhi and Zomato in Bangalore, has given
Zomato a lot of brand ambassadors who are always very highly valued. Zomato
Print Restaurant Guides -The Connoisseur’s guide to eating out have really
helped establish Zomato as an authority in the restaurant space.

Zomato’s initiative
“Menus for Change” to work for the less privileged, a program that
aims to give back to society and help provide nutrition and overall health to
children less fortunate than us has positioned it as a much superior brand than
its competitors and enhancing its brand value.

CUSTOMER SUPPORT

Thousands of customers view
and use the Zomato website daily. These customers belong to India, Dubai, UAE.
This was followed by quick expansion into Silence, Qatar, the United Kingdom,
the Philippines, South Africa, New Zealand, and more recently to Brazil, Turkey
and Indonesia.

PRICING STRATEGY

 

Pricing Model-The company earns revenue from advertising by listed restaurants.
Ad rates vary between Rs. 5,000 and Rs.3 lakh a month, depending upon location,
cuisine and other factors.

 

ADVERTISING OPTIONS:

1. Headliner Strip

2. Hover Advertisement

3. Banner Advertisement

4. Enhance your business page

 

 

 

 

COMPETITOR ANALYSIS:

Local Competition

 Food Panda and Just Eat- Food Panda gained
first mover advantage by launching the online order facility earlier than
Zomato, thus resulting in Zomato losing relevant market share

Justdial- Justdial offers a
wide range of restaurant listings; however, it loses out against Zomato as it
doesn’t have an equivalent collection of reviews, photos and user engagement.
Also, in the minds of consumers, Zomato offers a specialized and differentiated
service thus making it a natural choice.

 Global Competition

 Yelp-Basic difference between Yelp and Zomato
is that while Yelp publishes crowd-sourced reviews, organizes social events and
provides basic data about businesses, Zomato provides information (photos, menus
and geographic coordinates) and allows users to create their own network of
foodies for personalized recommendations. The flipside for Zomato: Total number
of unique monthly visitors to Yelp is a staggering 139 million, amounting to
four times Zomato’s existing traffic of 35 million. In terms of revenue, Zomato
earned $6 million in revenue compared to Yelp’s $232 million in 2014.

Time Out- Founded in 1968, it
has become a global authority on entertainment and events all across the world.
With a reach to 39 million people, it has a huge market share, however is more known for
providing information on events and happenings than restaurant listings and
reviews Since majority of users check rating and not reviews, it is very
important to maintain fair ratings on the website.

Geographical Factors affecting
Competition

Food Panda is present in 200
Indian cities and has made huge strides in the recent past however it is still
considerably lagging Zomato in terms of territory covered as Zomato has
presence not only in huge number of Indian cities but also in 22 different countries
and they are taking strides very fast. Tying up with restaurants and getting
the information organized in the way Zomato has done is a huge challenge for
any new entrant. However, seeing the pace at which Zomato has reached out and
expanded it seems possible and thus Zomato will have to constantly maintain
that advantage and keep coming out with new and innovative models.

INDUSTRY RIVALRY:

Food panda– food panda who has
also acquired Tasty Khana and Just Eat is a competitor to Zomato in this
marketspace. But, as per one of interviews with Mr. Deepinder Goyal, Zomato
doesn’t consider it as a threat because food panda in spite of being present in
market for 3 years has clocked only 10,000 orders a day whereas people visiting
Zomato has 1, 00,000 searches a day. Zomato’s large sales team gives an added
advantage to Zomato.

 Burrp! – Burrp! is a competitor to Zomato. But
due to its expansion from restaurant listing to other divisions such as events
and retail outlets, the company’s focus has been distributed whereas Zomato has
stuck to its core functions.

TinyOwl – TinyOwl is an
emerging start-up with business model of food ordering through App on smart
phones. It is currently present in Bangalore, Mumbai, Gurgaon, Hyderabad and
Pune. Yumist – Yumist is a new player in this market started by Ex-CMO of
Zomato which is targeting customers who want low priced daily meals market.
Although it has received the investments worth US$ 1 million, but these investments
are till now not significant to compete with Zomato.

Yelp – Yelp is the biggest
competitor to Zomato in US. It is present in 31 countries. To counter Yelp,
Zomato acquired Urban Spoon in US but still there is major gap to reach no.1 in
US market.

Hunger Go – Hunger Go is major
player in Singapore where Zomato doesn’t want to enter due to tough competition
poised by Hunger Go. Yadig & Timeout – Yadig and TimeOut are other major
players in UAE but Zomato is market leader in UAE with 65% market share.

Other New Start-ups – There
are other new start-ups which are nascent in stage but growing. Some of them
are FRSH, Eatlo, Holachef, SpoonJoy, DELIVERY CHEF etc.

ANALYSIS OF
CONSUMER RESPONSES

 

ü
Zomato has an excellent
Brand Equity

·       
Most consumers are
aware of the brand Zomato

·       
Most consumers can
easily recall the brand Zomato

·       
Consumers can recall
the brand logo

·       
Consumers have a great
degree of loyalty for Zomato

ü
Sources of equity

·       
It caters to the most
relevant needs of the customer, and fulfilled them better than the competitors

·       
It gives ROI to the
advertiser/ restaurant owner

·       
It is the leader in the
segment which it serves (food)

 

 

CONCLUSION & RECOMMENDATIONS

 

It was found that social media platform is not being properly utilized. The
Facebook page should be more active to interact with consumers. Also, Zomato
needs to keep innovating. New features like virtual tour of restaurants should
be added.

Live video shots from café/pubs can be added if some famous band is
performing over there. The brand should build on its most used features. It
must ensure that Authenticity of the reviews should be maintained. Paid reviews
should not be encouraged, as it will dilute the brand.