INTERACTIVE SESSION ORGANIZATIONS Zomato Scripting Success with E-Commerce Zomato was founded in the year 2008 as...

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INTERACTIVE SESSION ORGANIZATIONS Zomato Scripting Success with E-Commerce Zomato was founded in the year 2008 as Foodiebay by Deepinder Goyal, who is the CEO of the firm at present along with Pankaj Chaddah, the co-founder. It got its existing name in the year 2010. Currently, Zomato, an online restaurant search and discovery service provider has a major presence in 23 countries. Zomato's core features include the provision of information and reviews of restaurants through its portal, scanned menus, photos, and geocoded coordinates for restaurants. It also allows users to create their own network of foodies for personalized recommendations. The firm over the years has been able to receive substantial funding from investors with InfoEdge being a prominent one. At the same time, it has been able to spread its wings globally through some major acquisitions. Food oriented online commerce services in India have not flourished much in the past and recently, Zomato too took a dip when its net loss amounted to 590 crore rupees in the fiscal year 2015-16. However, it was far better than its competitors and the dip was short-lived with Zomato seeing surge in number of orders per day (2 million in 2017 compared to 0.5 million in 2016), in the number of monthly visits (71 million in 2017 compared to 120 million in 2016) and increase in operating revenue (185 crore rupees in 2017 compared to 334 crore rupees in 2016). Deepinder believes that constant effort towards improving its product with less room for error is the key to growth maintenance of the food giant. This holistic experience of restaurant discovery and dining provides them with an edge in competition. Zomato's business model is worth an insight i since this is the soul of the firm which enables: it to survive any crisis in the food industry or Indian economy for that matter. A core feature of Zomato's business model is restaurant. advertising, whi accounts for approximately 75 percent of the firm's revenue. While other competitors cave in business owners from a variety of segments, Zomato is focused on restaurateurs specifically based in the country of operation. For these business owners, Zomato acts as a highly targeted advertising platform allowing customers to effectively interact through its portal with the owners to cater to their dining options. Zomato has an extensive database of 1.4 million restaurants across 231 different countries. It lets the customers read menus, make table bookings, order food for delivery by accessing this database through its online portal. Although there are other players offering similar services such as OpenTable, Just Eat and Deliveroo who have been doing i this for years, what makes Zomato stand apart is its low overheads and a forward-thinking customer acquisition model. Goyal adds that his customer acquisition costs are considerably low compared to competitors who spend up to $15 per customer, while Zomato spends an average of just $0.04. This clearly adds to the profitability of the firm just after the customer places his first online order; since this is the moment firm. breaks even on its costs with the customer. In addition to this, Zomato has a large registered user base (19 million registered users till March 2016), so it charges relatively high for banner space on its app. The firm promises fresh data to its customers. that is refreshed every 3 months and hence, remains relevant and updated. For this purpose, Zomato has maintained its own team of foot soldiers who go to each restaurant and maintain their data. This feet-on-street model sure differentiates the firm from the rest and although the process is too intensive, the management believes that it's their strength. The collection of first-hand information from cafes, bars and restaurants allows the presence of rich content on their website and this is what (real-time refreshed data) attracts the customers back to Zomato. Another feature added on its portal is the ability of the users to review and give their opinions about a food space that they recently visited. The users are also encouraged to build and share stories of their food experiences which make the site more social and popular. A number of acquisitions made by the firm have allowed it an unprecedented diversification. For example, acquisition of food delivery start-up Runnrin in 2015 has let it diversify in food delivery services, an area which was overlooked by the firm in the past. With this, Zomato has launched a new service Zomato Valet which focuses on food delivery from high-value restaurants who don't deliver on their own. The main motive is to seek bulk orders for food delivery such as on some special occasions when the average order value will be high. The delivery for the same would be fulfilled through a hybrid delivery model currently adopted by the company. 93 percent of its order fulfilment occurs through the restaurants themselves where the orders have been placed, while the remaining 7 percent is fulfilled by third- party logistics firms roped in by Zomato. Another major acquisition for $52 million in an all cash- deal, is that of UrbanSpoon to mark its entry into the biggest of all markets-the US. UrbanSpoon has a strong presence on mobile apps in US, Australia, Canada, New Zealand, Ireland and UK, which makes way for the entry of Zomato too in these markets. The firm has also tied up with Ola for the year 2017 which allows the users to use apps of either firm and make payments. For example, Zomato app users can book Ola rides through the app while users can pay for Zomato online orders using Ola Money. A Zomato micro-app has been launched for Ola Play which provides many features of Zomato to Ola Play customers. A similar tie-up of the firm with Uber lasted for a year till 2016. Lately, the two have become rivals, following Uber Eats, an online food ordering company, becoming operable in India. In 2015, Zomato also acquired MapleGraph which had built Maple POS which is a cloud- based point-of-sale system restaurants. This has been renamed to ZomatoBase and is an Android-based POS system which is customisable. With this acquisition, inventory management at the firm has been automated and it also allows payment through debit and credit cards accepted via an inbuilt payment solution. Besides this, ZomatoBase also includes features for Menu management, Recipe management, CRM module, Data analytics, printing of electronic receipts to name a few. What really differentiates Zomato is the use of technology not just in building a customer base but also building relationships with restaurant owners. The food-tech company leverages technology to the business owners to facilitate their services and aid in their growth. The firm is also creating a marketplace for these restaurateurs where they can purchase products such as cutlery, or restaurant-related technological solutions, aid in licensing and choice of vendors. This will provide a one-stop platform required for the complete operation of a restaurant. Zomato is planning a massive rollout of this feature and aiming to eventually become an integrated platform for interaction between business owners and customers. Another product is for online table reservation and management named as ZomatoBook. The response towards the product is extremely variable in the country of operation since culture influences user behaviour. For example, in markets such as London and Dubai where users are accustomed to advanced table reservation, the product is a success. While in India, efforts are being made by the firm to promote the feature and gain customer attention. Another feather in the cap is the "Name and Shame" feature. When Zomato finds a restaurant guilty of obtaining reviews unethically, it displays a yellow badge against that restaurant (which stays there for 30 days) warning the consumers before browsing through the reviews. Although this has fetched mixed responses from both consumers and owners, the firm plans to continue with the feature. The latest concept launched in June 2017 is Zomato Treats which treats the subscribed users with free desserts. Users who have been loyal to the firm are invited for a low fee Zomato Treats membership and each time they place an order with the partnering restaurant, they receive a complimentary dessert free of cost. The firm has seen increased repeat usage that is a 25 percent increase in order frequency from the users who have already received a free dessert through this program. The company is working on increasing revenue profitability and reduction in inefficiency. Even in international operations, it is focusing on a few key markets and slowly expanding to reduce cash burn. The firm is a staunch believer in the use of technology to sustain growth and reap profits. CASE STUDY QUESTIONS 1. Provide a detailed insight into the core feature of Zomato business model which is restaurant advertising. 2. How does data add to the competitive advantage of Zomato? Discuss role of feet-on-street model in the same? Sources: Zomato Acquires Payments Platform MapplePOS to Launch Zomato Base, https://trak.in. Accessed on 23 July 2019; Zomato Base to offer a merchant marketplace for restaurant owners, https://tech.economictimes.indiatimes. com. Accessed on 24 July 2019; Zomato acquires 4-year-old Delhi based startup MapleGraph, https://m.yourstory.com. Accessed on 25 July 2019. Zomato's Success Story Is a First for India's Troubled E-commerce Sector, https://www.idealsvdr. com. Accessed on 25 July 2019; If you're a Zomato fan, here's what you should know, https://m.yourstory.com. Accessed on 25 July 2019; How Zomato managed to survive the carnage in the foodtech sector, https://economictimes.indiatimes. com. Accessed on 25 July 2019; Doing food delivery alone. is not sustainable, https://www.thehindubusinessline.com. Accessed on 24 July 2019. 3. How have acquisitions facilitated in flourishing online ordering business of Zomato? 4. Discuss with examples key features of Zomato e-commerce services and how do they differentiate it from its competitors? INTERACTIVE SESSION ORGANIZATIONS Zomato Scripting Success with E-Commerce Zomato was founded in the year 2008 as Foodiebay by Deepinder Goyal, who is the CEO of the firm at present along with Pankaj Chaddah, the co-founder. It got its existing name in the year 2010. Currently, Zomato, an online restaurant search and discovery service provider has a major presence in 23 countries. Zomato's core features include the provision of information and reviews of restaurants through its portal, scanned menus, photos, and geocoded coordinates for restaurants. It also allows users to create their own network of foodies for personalized recommendations. The firm over the years has been able to receive substantial funding from investors with InfoEdge being a prominent one. At the same time, it has been able to spread its wings globally through some major acquisitions. Food oriented online commerce services in India have not flourished much in the past and recently, Zomato too took a dip when its net loss amounted to 590 crore rupees in the fiscal year 2015-16. However, it was far better than its competitors and the dip was short-lived with Zomato seeing surge in number of orders per day (2 million in 2017 compared to 0.5 million in 2016), in the number of monthly visits (71 million in 2017 compared to 120 million in 2016) and increase in operating revenue (185 crore rupees in 2017 compared to 334 crore rupees in 2016). Deepinder believes that constant effort towards improving its product with less room for error is the key to growth maintenance of the food giant. This holistic experience of restaurant discovery and dining provides them with an edge in competition. Zomato's business model is worth an insight i since this is the soul of the firm which enables: it to survive any crisis in the food industry or Indian economy for that matter. A core feature of Zomato's business model is restaurant. advertising, whi accounts for approximately 75 percent of the firm's revenue. While other competitors cave in business owners from a variety of segments, Zomato is focused on restaurateurs specifically based in the country of operation. For these business owners, Zomato acts as a highly targeted advertising platform allowing customers to effectively interact through its portal with the owners to cater to their dining options. Zomato has an extensive database of 1.4 million restaurants across 231 different countries. It lets the customers read menus, make table bookings, order food for delivery by accessing this database through its online portal. Although there are other players offering similar services such as OpenTable, Just Eat and Deliveroo who have been doing i this for years, what makes Zomato stand apart is its low overheads and a forward-thinking customer acquisition model. Goyal adds that his customer acquisition costs are considerably low compared to competitors who spend up to $15 per customer, while Zomato spends an average of just $0.04. This clearly adds to the profitability of the firm just after the customer places his first online order; since this is the moment firm. breaks even on its costs with the customer. In addition to this, Zomato has a large registered user base (19 million registered users till March 2016), so it charges relatively high for banner space on its app. The firm promises fresh data to its customers. that is refreshed every 3 months and hence, remains relevant and updated. For this purpose, Zomato has maintained its own team of foot soldiers who go to each restaurant and maintain their data. This feet-on-street model sure differentiates the firm from the rest and although the process is too intensive, the management believes that it's their strength. The collection of first-hand information from cafes, bars and restaurants allows the presence of rich content on their website and this is what (real-time refreshed data) attracts the customers back to Zomato. Another feature added on its portal is the ability of the users to review and give their opinions about a food space that they recently visited. The users are also encouraged to build and share stories of their food experiences which make the site more social and popular. A number of acquisitions made by the firm have allowed it an unprecedented diversification. For example, acquisition of food delivery start-up Runnrin in 2015 has let it diversify in food delivery services, an area which was overlooked by the firm in the past. With this, Zomato has launched a new service Zomato Valet which focuses on food delivery from high-value restaurants who don't deliver on their own. The main motive is to seek bulk orders for food delivery such as on some special occasions when the average order value will be high. The delivery for the same would be fulfilled through a hybrid delivery model currently adopted by the company. 93 percent of its order fulfilment occurs through the restaurants themselves where the orders have been placed, while the remaining 7 percent is fulfilled by third- party logistics firms roped in by Zomato. Another major acquisition for $52 million in an all cash- deal, is that of UrbanSpoon to mark its entry into the biggest of all markets-the US. UrbanSpoon has a strong presence on mobile apps in US, Australia, Canada, New Zealand, Ireland and UK, which makes way for the entry of Zomato too in these markets. The firm has also tied up with Ola for the year 2017 which allows the users to use apps of either firm and make payments. For example, Zomato app users can book Ola rides through the app while users can pay for Zomato online orders using Ola Money. A Zomato micro-app has been launched for Ola Play which provides many features of Zomato to Ola Play customers. A similar tie-up of the firm with Uber lasted for a year till 2016. Lately, the two have become rivals, following Uber Eats, an online food ordering company, becoming operable in India. In 2015, Zomato also acquired MapleGraph which had built Maple POS which is a cloud- based point-of-sale system restaurants. This has been renamed to ZomatoBase and is an Android-based POS system which is customisable. With this acquisition, inventory management at the firm has been automated and it also allows payment through debit and credit cards accepted via an inbuilt payment solution. Besides this, ZomatoBase also includes features for Menu management, Recipe management, CRM module, Data analytics, printing of electronic receipts to name a few. What really differentiates Zomato is the use of technology not just in building a customer base but also building relationships with restaurant owners. The food-tech company leverages technology to the business owners to facilitate their services and aid in their growth. The firm is also creating a marketplace for these restaurateurs where they can purchase products such as cutlery, or restaurant-related technological solutions, aid in licensing and choice of vendors. This will provide a one-stop platform required for the complete operation of a restaurant. Zomato is planning a massive rollout of this feature and aiming to eventually become an integrated platform for interaction between business owners and customers. Another product is for online table reservation and management named as ZomatoBook. The response towards the product is extremely variable in the country of operation since culture influences user behaviour. For example, in markets such as London and Dubai where users are accustomed to advanced table reservation, the product is a success. While in India, efforts are being made by the firm to promote the feature and gain customer attention. Another feather in the cap is the "Name and Shame" feature. When Zomato finds a restaurant guilty of obtaining reviews unethically, it displays a yellow badge against that restaurant (which stays there for 30 days) warning the consumers before browsing through the reviews. Although this has fetched mixed responses from both consumers and owners, the firm plans to continue with the feature. The latest concept launched in June 2017 is Zomato Treats which treats the subscribed users with free desserts. Users who have been loyal to the firm are invited for a low fee Zomato Treats membership and each time they place an order with the partnering restaurant, they receive a complimentary dessert free of cost. The firm has seen increased repeat usage that is a 25 percent increase in order frequency from the users who have already received a free dessert through this program. The company is working on increasing revenue profitability and reduction in inefficiency. Even in international operations, it is focusing on a few key markets and slowly expanding to reduce cash burn. The firm is a staunch believer in the use of technology to sustain growth and reap profits. CASE STUDY QUESTIONS 1. Provide a detailed insight into the core feature of Zomato business model which is restaurant advertising. 2. How does data add to the competitive advantage of Zomato? Discuss role of feet-on-street model in the same? Sources: Zomato Acquires Payments Platform MapplePOS to Launch Zomato Base, https://trak.in. Accessed on 23 July 2019; Zomato Base to offer a merchant marketplace for restaurant owners, https://tech.economictimes.indiatimes. com. Accessed on 24 July 2019; Zomato acquires 4-year-old Delhi based startup MapleGraph, https://m.yourstory.com. Accessed on 25 July 2019. Zomato's Success Story Is a First for India's Troubled E-commerce Sector, https://www.idealsvdr. com. Accessed on 25 July 2019; If you're a Zomato fan, here's what you should know, https://m.yourstory.com. Accessed on 25 July 2019; How Zomato managed to survive the carnage in the foodtech sector, https://economictimes.indiatimes. com. Accessed on 25 July 2019; Doing food delivery alone. is not sustainable, https://www.thehindubusinessline.com. Accessed on 24 July 2019. 3. How have acquisitions facilitated in flourishing online ordering business of Zomato? 4. Discuss with examples key features of Zomato e-commerce services and how do they differentiate it from its competitors?

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1 Insights into the core feature of Zomato bussiness model which is restaurant advertising Through the food delivery bussiness zomato charges a commis... View the full answer