Evolution of online consumer services

industry, in particular the restaurant

search and discovery, with focus on

About Zomato
Zomato is a restaurant search and discovery service
It was founded in 2008 by Deepinder Goyal and Pankaj
Chaddah.
It currently operates in 23 countries, including India,
Australia and the United States.
It features restaurant information such as scanned
menus and photos sourced by local street teams, as
well as user reviews and ratings.
The company also provides cashless payment, online
ordering, white-label apps, table reservation, and pointof-sale systems.

Introduction
The service began as "Foodiebay", conceptualised in the
cafeteria of Bain & Company.
Customers would line up to look at the menus to order food
during the lunch hour.
Realizing this took up a large amount of everyone's time on a
daily basis, Deepinder and Pankaj decided to scan restaurant
menus and upload it on an intranet website for Bain employees.
The website saw a lot of traffic and was launched publicly in 2008
And now Zomato have listed 1.4 million restaurants in 10000
cities of 22 countries with 80 million users, 8 million reviews and
2700 employees

Culture

Mission and Vision

Zomatos mission is to ensure nobody has a bad
meal.
Zomatos vision is to be the global platform when
someone is looking for food locally
The said mission and vision is achieved by:
Helping people discover great places around them.
Building amazing experiences around dining.
Enabling restaurants to create amazing experiences.

Funding
Zomatos total funding to ~$225 million which comes from a close set of four
investors Info Edge, Sequoia India, Vy Capital, and now Temasek.

Critical Success Factors Local

First mover advantage
Strong content platform
Efficient employees
Great Product

Critical Success Factors Global

Merger & Acquisitions route for global entry
Strong content platform
Hiring local employees
Local management reporting to Head office
Culture fit

Globalization Strategy
To expand themselves across the globe as a leading
service provider
As part of further Globalization Strategy, Zomato
recently started online food delivery system using
Zomato money, making it a end to end experience for
its customers.
Hiring skilled local people
Robust IT software system
Local tie ups, mergers & acquisition

Major Acquisitions
Company

Country

MenuMania

New Zealand

Lunchtime

Czech Republic

Obedovat

Slovakia

Gatronauci

Poland

Cibando

Italy

Urbanspoon

USA

Mekanist

Turkey

Maple POS

India

NexTable

USA

SWOT
Strength
Innovative
Culture
Financial Leverage
Technology
Brand name
Global presence

Weakness
High staff turnover

Opportunities
Emerging Markets
International
Expansion
New business
verticals Online
food ordering
Rising internet
penetration

Threat
Rising competition
Changes in Govt.
Policy
Easily imitated
Business model

Frugal Innovation
A flexible and breakthrough idea
A common system that can be customized as per
country requirements, and can be centrally used
globally.
Learning with greater efficiency
Multilingual system
Customized user experience
Promoting Entrepreneurship

GCM Framework
Global Competitive Matrix ( GCM ) Framework
National Ethos
High on base on
mobile + vast talent
pool of IT engineers

Public Policies
Under startup India
campaign zomato
has the right
environment to go
global

Firm Culture
Global delivery,
Strategy
Differentiation
Applied Innovation

Company strategy
Content driven
innovative product
solutions - Customer
oriented and employee
friendly Policies.

Porter Diamond Framework

Firm Strategy
- Large pool of
engineers
- Growing
internet
penetration

Demand
Condition
- Rising demand
in food industry
- Innovative new
digital solutions
for the industry

Factor Conditions
- Developed
Telecom Industry
- Developed
Computer Hardware
Industry

Relating &
supporting
industries
- Rising demand
in IT
- Digital solutions
on boom

Global Presence

Entry mode strategies implemented

Mergers & Acquisitions
New Zealands MenuMania
US based Restaurant search
engine Urbanspoon
Italys restaurant search portal
Cibando
Lunchtime in Crezch Republic,
Obedovat in Slovakia and
Gastronauci in Poland
Turkey based Mekasnist

Localization
1.4 million restaurants in 10000
cities of 22 countries
Developing & customizing website
and app in local language
Local language communication
with customers
More visibility in the market as
compared to their competitors like
Yelp, Burrp, Just Eat, Timeout, etc .

Product Offerings
Restaurant Search & Discovery
Cashless Payments
Recommendation Engine
Online food ordering
Table Reservation
Whitelabel Apps
Zomato DB

New Innovations
Table Booking
Online Food Ordering
Cloud solutions for Restaurants

PESTLE ANALYSIS
Sl.
No.

EFFECT ON ZOMOTO BUSINESS DUE TO MACRO ENVIRONMENT IN

USA
FACTOR

DETAIL

USA like India is a democratic country and has a consistent record of uninterrupted
democraticelections. .
Stable political country. Elections are held freely and fairly contested and have been held
POLITICAL on schedule. General elections are held every 4 years.
No major labour/trade union unrest.
One of the least corrupt country (ranked 16 th out of 168 countries in Corruption
Perception Index, as per Transparency International 2015).
There are no exchange controls in USA. Profits can be freely remitted and capital moved
in and out of the country without restriction.
High per capita income, GDP Per Capita 54 629 USD

USA has high level of business freedom (7th in ease of doing business out of 189
countries)
ECONOMI High economic freedom (12th rank out of 178 countries) (Index of Economic Freedom
C
determines whether individuals in a country are free to work, produce, consume, and
invest without being constrained by the state).
Member of NAFTA (The North American Free Trade Agreement is a treaty entered into by
the United States, Canada, and Mexico; it went into effect on January 1, 1994) and APEC
(Asia-Pacific Economic Cooperation is a forum for 21 Pacific Rim member economies
that promotes free trade throughout the Asia-Pacific region).

EFFECT ON
ZOMOTO
BUSINESS
+
++
+
++
+
+
+
++

EFFECT ON ZOMOTO BUSINESS DUE TO MACRO ENVIRONMENT

IN USA (contd.)
Sl. No.

FACTOR

SOCIOCULTURAL

DETAIL

EFFECT ON
ZOMOTO
BUSINESS

High literacy rate

Only 14.80% of the total population of 32 Million is under poverty line

Culture of USA is different from India. Religion, customs, food habits are different
though language is common (English).

+/_

Highly technology based and innovative country. R&D expenditure is 2.8% of GDP.

TECHNOLOGIC 92% of US youths (15-34 years of age) have access to computers (as on 2013).
AL
USA is 34th in KOF Index of globalisation (out of 185 countries) (KOF Index of
Globalization measures the economic, social, and political dimensions of
globalization in each country) (As per Swiss Federal Institute of Technology,
Zurich) .
USA is part of the Basel Convention (reg. disposal of hazardous waste), the
(Ramsar Convention), the
ENVIRONMENT Convention on Biological Diversity
Kyoto Protocol, the Montral Protocol, the Nuclear Test Ban Treaty, and the UN
AL
Conventions on the Law of the Sea, Climate Change, and Desertification etc.

++

EFFECT ON ZOMOTO BUSINESS DUE TO MACRO ENVIRONMENT

IN USA (contd.)
Sl. No.

FACTOR

LEGAL

DETAIL

EFFECT ON
ZOMOTO
BUSINESS

Robust legal system and strict enforcement of laws. Approval of food items
and drugs are routed through FDA (The Food and Drug Administration is an
agency within the U.S. Department of Health and Human Services). Highest
quality standards are followed and stringent punishment (including blanket ban
on product) is awarded for the defaulters.

As per world bank data, Strength of Legal Rights Index of USA is very goof (11
at a 12 point scale. (Strength of legal rights index measures the degree to
which collateral and bankruptcy laws protect the rights of borrowers and
lenders and thus facilitate lending. The index ranges from 0 to 12, with higher
scores indicating that these laws are better designed to expand access to
credit).

As per World Justice Project, USA is ranked 19th out of 102 countries (The World
Justice Project is an independent, multidisciplinary organization working to
advance the rule of law around the world. The rule of law provides the
foundation for communities of opportunity and equity communities that offer
sustainable economic development, accountable government, and respect for
fundamental rights).

++

INDIA
Sl.
No.

FACTOR

POLITICAL

ECONOMIC

SOCIOCULTURAL

DETAIL
Since independence in 1947, India has maintained a strong belief in democracy
(world's largest democracy), with a consistent record of uninterrupted
democraticelections since its independence.
Stable political country. Except for a short duration in 1977, elections are held
freely and fairly and on schedule at every 5 years.
No labour union unrest since independence

EFFECT ON
ZOMOTO
BUSINESS
+
+
+

Moderately corrupt country (ranked 76th out of 168 countries in Corruption

Perception Index, as per Transparency International 2015).

Indiahas low level of business freedom (142 nd rank in ease of doing business
out of 189 countries) (World Bank Data)

GDP growth of 6.5%, Imports 479 Bn. USD, Exports 291 Bn. USD. Per capita
Income is 1596 USD (World Bank Data)

Low economic freedom (128th rank out of 178 countries) (Index of Economic
Freedom determines whether individuals in a country are free to work, produce,
consume, and invest without being constrained by the state).

Availability of skilled manpower at a cheaper rate.

Adult literacy rate is 65% (as per 2011 Census).

As per 2011 Census, 41% of the populations is under 18 years of age.

+
+

Comprises of different customs, religions, languages (though English is the

common language) and food habits.

--

EFFECT ON ZOMOTO BUSINESS DUE TO MACRO ENVIRONMENT

IN INDIA (contd.)
Sl. No.

FACTOR

DETAIL

As per Mckinsey report, technology sector in India is one the fastest growing
sector , the most potent of these is the mobile Internet, will likely reach 700

million to 900 million Indians by 2025.Collectively, the technological sector in

TECHNOLOGICA
India could contribute $550 billion to $1 trillion of economic impact per year
L
in India by 2025.
Extensive laws to safeguard environment viz. Air (Prevention and Control of
Act,
1981,
Biological
Diversity
Act,
2002
ENVIRONMENT Pollution)
Environment (Protection) Act, 1986,Forest Conservation Act, 1980, Indian
AL
Forest Act, 1927, National Green Tribunal Act, 2010 etc.
As per World Justice Project, India is ranked 59 th out of 102 countries (The
World Justice Project is an independent, multidisciplinary organization working
to advance the rule of law around the world. The rule of law provides the
foundation for communities of opportunity and equity communities that
offer sustainable economic development, accountable government, and
respect for fundamental rights).
LEGAL
As per world bank data, Strength of Legal Rights Index of India is moderate
(6 at a 12 point scale. Strength of legal rights index measures the degree to
which collateral and bankruptcy laws protect the rights of borrowers and
lenders and thus facilitate lending. The index ranges from 0 to 12, with higher
scores indicating that these laws are better designed to expand access to
credit).

EFFECT ON
ZOMOTO
BUSINESS

+/-

+/-

Global Competition - Zomato vs Yelp

vs Opentable

Moving from 2EE to 3EE

Zomoto doesnt own a single restraint but controls
business for 1.4 million restaurant
Zomato which started as content portal providing menu
restaurants from a hard copy to a readable digital
softcopy has moved way ahead of it convention model.
Zomato now offer customized cloud pos solutions for
restaurants
Acts as a event advertising platform
Works as a recommendation engine

Conclusion
So far Zomato is profitable from only profitable from the
UAE and India market.
Its biggest acquisition of Urbanspoon Is yet to publish
fruitfull results.
2015 will be showing greater impacts of its Acquisition
strategy
As per company Zomato will continue to focus on
acquisitions of companies which have a strategic fit