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.