Since its launch in 2012, Zomato has regularly transformed its business strategy to target fresh customers and stay well ahead of its competitors. Now, it prepares for new highs. Rohin Thampi, Regional Director, Zomato MEA, speaks exclusively to SME Advisor…
What was the biggest challenge to Zomato’s growth in 2016?
2016 has been an incredibly interesting year for us as an organisation. We took a lot of corrective measures towards the end of 2015 and saw the benefits to the overall growth of the business as a result of the same in 2016. I would also like to think 2016 was a pivotal year for us because it defined the kind of the company we could/would build and become in the truest sense. We became more prudent in how we spent our time as an organisation, as well as how we spent our management team’s bandwidth. We also exercised prudence in where we deployed our capital. As a result we brought down our burn which peaked at US$9 million sometime early 2015, to ~1 million by the end of 2016. Over the first six months of 2016 we also doubled our revenue, and were able to do so while bringing down the cost, and the high risk, high burn areas of the business.
What were key achievements?
We were able to successfully set up and hit the ground running with two new business verticals: Online Ordering and Table Reservations. In addition, we continued honing our largest B2B offering Zomato Base, which is our Point of Sales product for restaurants. Outside of that, we are focusing on building a technology-driven organisation and are looking to introduce more meaningful and intuitive products for our users as well as our commercial partners. We also built better tools for our internal teams to empower them to realise their potential and boost their productivity. Aside from that I think we were able to very successfully lay down the foundation of the kind of organisation we want to build. We went back to the whiteboard and unlearnt and re-learnt a lot of things as a collective, which I think has been one of our largest wins in 2016.
Why is UAE an attractive market for Zomato?
The Middle East, and specifically the UAE, presents a tremendous growth opportunity over the next three to five years. Let me give you an example to explain the power of the product in this region. In Dubai alone, a whopping approx. 90 per cent of the addressable population (people in the 18-45 age bracket living in the metropolitan area with enough disposable income to dine out) uses Zomato. The UAE is a cosmopolitan market in the true sense of the term, and the potential for user engagement, partner growth and reception of our product offering is truly immense here.
We launched Zomato in Dubai in September 2012, with approximately 3500 restaurants listed on the website. Today, there are over 8000 Dubai-based restaurants listed on Zomato! This effectively means that the users get an exhaustive list of restaurants to make an informed decision about their next meal. The traffic on our website and app has grown consistently over the last four years. We have over half a million app downloads and over 1.8 million unique users in UAE that access Zomato each month. More and more people are using the Zomato app to order food, which is a remarkable trend. We have over 900 restaurants advertising on Zomato in the UAE (of which over 600 of them are in Dubai); and have broken even on the classifieds business in the UAE. In fact, our revenue growth from the UAE has even helped fuel the growth of Zomato in other geographies and adjacent business like the Online Ordering. The UAE is a large component of this growth and has definitely been a significant contributor to our business globally. We launched our online ordering business in the UAE about a year and a half ago and currently offer our users the choice of ordering from nearly 3000 restaurants. We are seeing a healthy growth rate of 25 per cent month on month, on the order volumes. Dubai is already one of the most profitable cities for our online ordering business.
What’s particularly worked for your company in the UAE?
Given that over 1.8 million unique visitors use the platform every month in the UAE to look for menus, pictures and other restaurant details which help them plan their next meal; I think the exhaustiveness and depth of content we offer is our biggest USP. Add to that tech enabled services such as online ordering and table reservations, which make it all the more convenient for users to make a decision on where to have their next meal from, and order online or book a table at the restaurant in a couple of clicks.
Can you identify a trend that has reshaped the local food market?
The UAE food scene was quite active in 2016 with new trends popping up, from the rising popularity of home-grown brands to delicious ‘freak shakes’. We also saw food trucks and Michelin Star Chefs’ restaurants bursting into the food scene and promoting overall growth in both fine dining and street food categories. Molecular gastronomy also became more mainstream in the region over the past year, and pop-up restaurants could be seen at most of the outdoor events that happened over the past year, reaffirming the importance of food amongst the population.
What is your data telling you about customer preferences? Is there anything that stands out?
From our online ordering data, we have seen that pizza and Lebanese dishes were amongst the most ordered in 2016. The UAE market also loves its Asian food – from Chinese to Indian – which has been the most searched and popular cuisine of 2016. But it’s important to add that user behaviour is also affected by seasonal shifts. For instance, Biryani is the most sought after dish during the Holy Month of Ramadan.
Zomato has been talking about cloud kitchens and infrastructure services. Will these services be launched in the UAE as well?
We have recently launched our first Zomato Infrastructure Services (ZIS) site in Delhi, India, and will invest the next few weeks/months to learn the nuances of the operations, before we expand this further. The UAE has always been an important focal market for us. Both the users as well as our restaurant partners have always been very receptive to any of our new products. We’re all looking forward to bringing ZIS to the UAE over the next few months.
What’s your take on food trucks? Disruptors or just a passing fad?
Food trucks, or street food in general, was on the back burner in the UAE food market, but over the past couple of years street food concepts have become trendy and seen an upswing in the UAE. Many international concepts mixed with home-grown food trucks are now emerging across the country.