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We aim to have presence in 2 more international cities by the end of the year

Deepinder Goyal is the Founder and CEO of Zomato. Prior to starting
Zomato, Deepinder 
worked as a management consultant with Bain and Company in New
Delhi. It was at 
Bain that Deepinder conceived the idea of an online restaurant
information service after 
seeing the demand for menu cards among his colleagues. He left Bain
in 2008 to start 
Zomato out of his apartment and has since overseen strategy and

Deepinder Goyal is the Founder and CEO of Zomato. Prior to starting
Zomato, Deepinder 
worked as a management consultant with Bain and Company in New
Delhi. It was at 
Bain that Deepinder conceived the idea of an online restaurant
information service after 
seeing the demand for menu cards among his colleagues. He left Bain
in 2008 to start 
Zomato out of his apartment and has since overseen strategy and
product development. In an exclusive interview with India Digital Review, Goyal
discusses his company’s plans for the future.
 

Zomato was earlier called FoodieBay. What was the idea
and story behind the launch of FoodieBay and then the transition to Zomato?

While I was
working at Bain & Company, a leading management consulting firm, I noticed
that a lot of my colleagues were queuing up in the office cafeteria to have a
look at the menu cards to order food. Most of these people were young, affluent
bachelors who did not have access to home-cooked food. I just asked myself
“What if these menus were available online?” That was how Foodiebay was born.
Pankaj and I then went on to build this database and soon we had gone live with
menus for 1,200 restaurants in Delhi NCR in July 2008 which expanded to 2,000
restaurants by the end of the year.

We re-branded to
Zomato in November 2010. The primary reason was that we wanted to gradually
diversify into non-food categories and also to avoid a possible conflict with
eBay, because Foodiebay had “ebay” in it. Re-branding was a big risk but it
worked out well for us in the end. Zomato had a little more zing to it compared
to Foodiebay J and was short and easy to remember. We focused a lot early on
communicating the change, redefining our culture and establishing our new
identity and when I look back I think we got most of them right.

Recently, Zomato had expanded its operations in
international markets with the launch of its services for Dubai. Your reasons
behind choosing Dubai and future expansion plans?

Expanding into
markets outside India was always on the cards primarily because there is a need
for such a product in several countries. Dubai being one of the most popular
business hubs globally with a very vibrant restaurant industry and a high
Internet penetration was a good market for us to start off with. We have
received tremendous response so far with over 5,000 users visiting the website
everyday. Post the Dubai launch, we have moved on to Sharjah and Abu Dhabi is
on decks. We are already the biggest restaurant guide in UAE, and will now have
coverage of all three major cities in the country.  In addition, we have teams in other parts of
Middle East and South East Asia that are setting up operations.

Info Edge has increased its stake in Zomato Media Pvt
Ltd to 48.5% with a total investment of Rs 31.06 crore. How are you using the
funds?

We like to use
our funds in a measured way with the goal of breaking even in any new market
within 2-3 quarters. We feel that we can comfortably invest in expanding our
reach in India and also invest in new markets; the success of our Indian
operations is a big reason here.

What is your business model? Are all adverts listed on
Zomato paid?

Our revenue
model is based on hyper local advertising. Close to 6 million users visit
Zomato just before lunch or dinner, to decide which is the best place to eat
out or order in from around them. This forms a highly targeted platform for
players in the food and beverage sector to promote their product. Yes, all
adverts on Zomato are paid for, however the listings of course are free of
charge.

Zomato has partnered Citibank to launch print
handbooks for four cities. What was the idea and objective behind that?

The Citibank
Zomato Restaurant Guide 2012 was launched in May with the idea of introducing a
unique ‘occasion based’ guide to the market that would recommend restaurants to
the user based on his/her mood. The guide gives you the best restaurants (10-20
recommendations) for any key occasions for dining out (e.g. Romantic Dinner,
Beer in a Bar etc). Restaurants included in the guide are an unbiased choice of
seasoned foodies (Zomato users), who appreciate good food and great experiences
more than anything else.

How big is the overall Zomato team now?

We are currently
150 Zomans strong and growing rapidly across functions!

What are your plans for Zomato going forward?

We will continue
to expand aggressively in India – we have rolled out three new cities in the
past month (Lucknow, Ludhiana and Indore) – but are also scaling up our
operations overseas to access a bigger market. We aim to have presence in 2
more international cities by the end of the year. We have also started
evaluating select markets in Eastern Europe and Africa and should have a better
idea by the end of October.

Do you plan to include more categories on Zomato.com
in the future?

Right now, our
sole focus is on becoming the world’s most passionate online community centered
on discovering places to eat around you. We are growing stronger and getting
more social day by day. Within the restaurant space, we might explore
opportunities, which will lend more depth to our content, business and adds
significant value to our users.

What are your revenue expectations this fiscal?

We are expecting
an exponential increase over last year’s numbers. However I cannot disclose the
exact figures since we are a private company.

From which geographies are most of your users coming
from presently?

Delhi NCR,
Mumbai, Bangalore and Pune are the key markets from where we see most of our
users. We have had a presence in these cities both online and offline for
longer duration than the others so that could be one of the reasons. Chennai,
Hyderabad, Kolkata, Chandigarh and now Dubai are growing very fast and will
form a significant chunk of our user base very soon.

How big is the competition in the Indian market
presently?

There are two
kinds of people who visit us – those who already know where they want to go and
those who don’t and are looking for options. For the first lot, there are
multiple options, like Just Dial and Ask Laila, where they can get a phone
number. For the second lot, there is no option; they have to come to Zomato.

Local Search, as a category, was once the darling
segment of internet in India. Today no one speaks about this. Your thoughts.

I would put that
differently. Local search or discovery is still a darling segment today and is
getting stronger by the day. As a result, several concepts around location
based services – both web and mobile based – have come up over the last couple
of years. Local, Social and Mobile are the three hot keywords one should look
out for over the next few years.

Many consumer internet companies, including your
investors have built their brands on TV. Your TVC didn’t work well. What are
your marketing plans going forward?

Zomato is a very viral product as it surrounds a
basic necessity – food. So we have always focused a lot on word of mouth. That
clubbed with SEO, SEM has resulted in quick and loyal growth since initial
days. Today we also do everything from BTL to TV advertising to remain on the
top of the user’s mind, but we are very frugal compared to others in the
industry. On TV, we follow a very niche approach and it has worked very well
for us going by the response we have received. We selected our creative was
selected via a crowd-sourced contest and aired it on programs, which were all
about food so it made an instant connect. Building a brand name and brand
ambassadors for your company is a long-term investment and is a tough task to
achieve as well, but it pays off in the end as you make a powerful association
with your customers. Our focus going ahead is to achieve that end goal and for
that you don’t need to go all-in on one single medium – TV. We believe that it
has to be a combination of a building a world class product which people value,
use and talk about, and selectively marketing it and engaging with users where
possible.

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