We’re Closing in on the #1 player in Online Ordering in India: Mukund Kulashekaran, Zomato
Zomato, the India-based global restaurant search and discovery service, has been on an acquisition spree lately, in a bid to help the brand foray into new markets, and offer a comprehensive suite of restaurant services including discovery, online ordering, delivery, table reservations and payments, to its customers. We got talking with Zomato’s India Business Head for Online Ordering, Mukund Kulashekaran, who tells us why the brand decided to enter the online ordering space and also reveals the company’s plans to enter into new markets, and launch new services. Here’s the unedited transcript of that interview:
Q. You recently launched your online food ordering service – Zomato Order, in select cities; what prompted this move?
We’d wanted to venture into online ordering for a while now, but were waiting for the restaurant-merchant community to evolve in the country. Based on a lot of user and merchant feedback we realized there was a need for a seamless product experience in the online ordering segment. We’d taken restaurant search and discovery by storm and decided to take a larger piece of the pie by entering online ordering. The restaurant scenario has definitely evolved a lot over the past couple of years. The community is a lot more cognizant of customer needs today and they will not risk losing brand equity for any short-term gains.
Our vision is to be a global platform when someone is looking for food locally. As a product the idea is that when a user wants to communicate with a restaurant – be it finding out which restaurant you want to go to, calling a restaurant, booking a table, making cashless payments and even ordering food online, you should be using Zomato to do it. Introducing online ordering is one more step in the direction of bridging the communication gap between restaurant owners and consumers. Zomato Order is currently available across 14 cities in India. We’re seeing an average of 10,000 orders on the weekend. Now with online ordering already launched, its initial success is driving strong word-of-mouth effect for us and getting us newer partners on board quickly.
Q. What was the reasoning behind making Zomato Order a standalone app? Wouldn’t it have been a smoother transition if the online ordering service was integrated with the legacy app, which already has a substantial user-base, across mobile platforms?
There are primarily two different use cases. One includes users who order meals frequently. For them, the online ordering app fills the void perfectly as they have set choices and may not be looking to explore other options. They can directly go to the restaurant page and place an order. The other use case consists of those who access Zomato for search and discovery purposes. The integrated app helps them place an order if they wish to as they can easily get redirected to the Zomato Order app.
Q. There has been a flurry of new entrants in the online food ordering space over the past few years, including the likes of JustEat and FoodPanda; do you think there is enough room for more players to enter this market?
There are plenty of other platforms that have recently ventured into online ordering, which I think is a good thing. I believe that competition is good as it ensures a constantly improving customer experience.
Q. In the short time since the Zomato Order mobile app launched, have you seen enough traction on the platform to convince you that this move was justified? How have your customers reacted to this new initiative?
The biggest advantage we have over any of our competitors is that we don’t have to acquire customers to use our products. We’ve got fantastic order volumes and are growing 20% week on week – we are already closing in on the number 1 player in this space in India.
Our focus has always been on making dining experiences more convenient for users and we are certain this (online ordering) among the other products that we are introducing is going to change the way people dine. We have around 12,000 restaurant partners across the 14 cities that we are present in (India). On an average, we get around 10,000 orders over the weekend; our target is to hit 100,000 orders a day in India.
Q. Zomato recently started monetizing the mobile platform by introducing in-line ads; how does this tie into your Zomato for Business initiative? Are there any other revenue generation models in the works?
Zomato’s revenue model is primarily based on hyper-local advertising contextual to the user search criteria, where users searching for restaurants in a particular area see ads for other relevant dining establishments in and around that location. This allows restaurant businesses to target customers already searching for dining options in their catchment area. At present, over 7,000 restaurant businesses advertise with us in India alone, with the number of merchants increasing by the day.
3-5 years down the line, advertising will become a third of our revenues - @mukund1981 @Zomato Click To Tweet
The new transactional products that we have introduced such as Zomato for Business, online ordering, in-app payments and the soon to be introduced table reservations and a point of sale system will bring in two-thirds of our revenues. We launched our online ordering feature in April this year. We will be launching table reservations a couple of weeks from now in India and the point of sales system later in November.
Q. Could you tell us something about your Urbanspoon and MaplePOS acquisitions, and what are some of your immediate expansion plans for other markets?
We acquired MaplePOS, a cloud-based POS product in April this year, which will serve as the foundation for Zomato Base. Zomato Base is a cloud-based point-of-sale product being developed by Zomato for restaurant businesses.
The system uses custom hardware for a more reliable product experience, and will include a host of powerful features to help restaurants manage their back-end operations. In addition to menu and inventory management, CRM tools, Zomato Base also has a built-in payment solution that will accept debit and credit card payments. The product will help provide business-focused solutions for restaurants, which in turn, will help us at Zomato to offer highly differentiated services to our end consumers.
In January this year, we acquired Urbanspoon to make our entry into the US and Australia markets. Overnight, our traffic grew 3x, the number of restaurants listed grew 7x, and the number of cities we cover crossed the 10,000 mark.
In the next 3-4 months we will focus on growing our services in the countries that we are present in. We are not looking to expand into more than two new countries over the next couple of months.
We’re currently focused on launching in more countries in Europe and a few in Southeast Asia. Scandinavia, Spain, Belgium, Netherlands, Malaysia and Vietnam are priority markets. Maintaining a strong content platform, hiring the right people and focusing on product improvements to keep up with the need of the hour is our focus as we look ahead. Over the next five years, we are focused on taking Zomato to 100 countries with the full suite of our products.
Q. What is your take on digital wallets – based mobile payments? Is this an area you would consider exploring, in addition to cashless payments, which is already being readied?
We are already working on the idea. With the introduction of the integration with Paytm Wallet we intend to further cut down on the steps involved when you’re making a payment while ordering food through Zomato. We are also in the process of integrating other similar wallets. Our idea is to give the users a seamless payment experience through a mobile wallet solution. Food ordering is a prime use case for digital wallet users, and this association will be great for our users. The mobile wallet is integrated across all the online food ordering platforms on Zomato. A consumer can use the Zomato Order app to pay seamlessly for their online orders using the Paytm Wallet.
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