Deepinder Goyal, Zomato.com: “We have scanned menu cards for 96% of the restaurants in our directory.”
Deepinder, please introduce us to the concept of Zomato, as you see it.
Zomato helps you discover more places to eat around you. At Zomato, you can also share your experiences at restaurants and help other foodies make a choice. In short, Zomato is all about food and where you can find the best of it.
How is Zomato different from other online restaurant directory portals?
We are not different. We are much better. Zomato’s key focus area is coverage and depth. We list almost twice the number of restaurants than any other restaurant directory portal inIndia. Also, our content is much richer. For instance, we have scanned menu cards for 96% restaurants in our database. Also, we have ratings and reviews for most of the restaurants listed at Zomato. No other portal even comes close to what we have.
How did the business idea for Zomato about? You started off as ‘Foodiebay’ and then, rebranded to ‘Zomato.’ Can you take us through that as well?
While working at Bain & Company, a leading management consulting firm, we noticed a lot of people queueing up in the cafeteria section to have a look at menu cards to order food. Most of these people were young, affluent bachelors who did not have access to home-cooked food. What we did was just put these menu cards online. That was how Foodiebay was born.
We rebranded to Zomato for multiple reasons. The primary reason was that we wanted to gradually diversify into non-food categories. And rebranding early on comes at a lower cost. So, we gathered some guts and made the switch possible within a month. We also wanted a more powerful brand name. Zomato is already a better brand that Foodiebay could ever be.
We never zeroed onto the name Zomato. We have a few options and everybody unanimously loved Zomato. Then, it was a no-brainer.
Tell us about your backgrounds.
Pankaj is also from IIT Delhi. He’s a Mechanical Engineer (2007 batch). He joined Bain right out of college. He too quit Bain a couple of years ago to devote more time to Zomato.
Where do you see the vertical-based online directory space, local search and Zomato five years from now? Are you looking at creating sub-brands?
I would be the richest person in the world if I knew the answers to all these questions. The reality is that the market is growing and changing so fast that a lot of times, we have to react to what our customers want from us and not what we want to create. This strategy has been working well for us since we are growing very fast and our customers and clients are extremely happy with us.
According to you, what is the size of the market that you’re addressing? How much of it do you currently own (in terms of market share) and what’s the target looking like?
A recent estimate says that the restaurant industry was worth $3 billion inIndiain 2010. Aggregators typically command 5-10% of the industry size. So, we are easily looking at a $300-600M market opportunity.
However, the aggregators inIndiahaven’t matured yet. But we will see that happen in the next 3-5 years. In 2015, our target is to hit $50-75 million in revenues at a 15-25% market share. Currently, most of the market share is dominated by voice (JustDial) and internet itself only has about 10% market share. We have close to 35-45% market share within the internet aggregator space.
What is Zomato’s revenue model? We understand that you’ve raised a round of funding from Infoedge. Apart from the money component, how have your investors added value to Zomato?
The revenue model is primarily advertising. By advertising, we mean hyper-local advertising. There is a lot of money to be made in that space. And we are doing well in terms of our revenue growth.
Also, we believe that investors should only be brought in for the value they can add apart from the money. In the form of Infoedge, we are very lucky to have such investors. Unlike most VCs, our investors have hands-on experience in creating multiple successful internet businesses. With a flexibility to call them up anytime we want, it helps us a lot especially when we get stuck with difficult decisions.
What are the challenges that you faced while developing your platform? How did you overcome those challenges?
Ours is a content platform. We used to and we still face problems in making our content as rich as it is right now. We often get into a fight with restaurant owners who refuse to share their menu cards on Zomato. More often than not, we win.
How big is the team behind Zomato? Are you looking at hiring?
We are a total of 65 people now. And we are constantly evolving and hiring. With the speed at which we are growing, everyone we hire starts getting overworked pretty soon. Our tech team has 10 people in total. A couple of them are from IIT. But most of our brilliant engineers are from colleges other than IIT. We do not hire much from IITs, as we don’t see much stickiness in IITians.
We have a very strong sales and marketing team. We have people from IIMs heading our sales teams in different parts of the country and they are doing very well. Overall, we are very proud of the team we have built and we think that this is one of the best ways to build a long term sustainable business.
So, how has the Zomato journey been so far? Can you take us through some interesting trends that you’ve noticed with respect to people’s ‘eating out’ habits?
It’s been very satisfying. We see about 750,000 users per month on Zomato. We’ve gotten about 325 clients on board. After the website, the BlackBerry app is the most popular entry point into the world of Zomato. Mumbai andDelhiare our strongest markets.
And we’ve noticed that people eat out the most on Fridays. And most people sleep through the afternoon on Sundays to wake up to hog a lot of food on Sunday evenings.
We understand that you’ve also got Blackberry, Android, iPhone & Chrome apps out for Zomato. How are those working out for you? Also, what are the other platforms that you’re looking at?
We launched our mobile apps to take a dig at voice. We are very happy with the response we have been getting from them. In about 4 months of the launch of our apps, we have seen an installed base of about 100,000 apps, which is huge given that we have only released apps for smartphones.
We are one of the only Indian companies to have a custom app for the Blackberry Playbook. Blackberry is also using the app to advertise Playbooks to the Indian consumer. We are also coming up with apps for Nokia phones very shortly. Also in the pipeline is a generic J2ME app, which can be installed on virtually any phone available in the market.
Let us know about your plans for expansion.
Our immediate goals are to add 6 more cities to Zomato (we are already at 10). We have already added the Nightlife section to ourDelhi, Mumbai andBangaloresections. We need to add Nightlife to Pune andHyderabad. Then, we are planning to launch the Events section toDelhi, Mumbai,Bangaloreand Pune. That should keep our ‘expansions’ team busy for another year or so.
Sriram Mohan | YourStory | 26th July 2011 |Bangalore