When Zomato had acquired Urbanspoon in the US and subsequently laid off employees in India, critics had said that it had spread itself too thin. The company wasn’t profitable in India, and it had tried to make its mark in competitive markets abroad. Zomato had trudged on though, and eventually expanded to 23 markets globally.
It seems to have worked out well for them. In a blogpost, Zomato CEO Deepinder Goyal has said that in terms of monthly users, Zomato is the number one player in 18 of the 23 countries they’re present in. Of these, 6 markets are profitable as well.
And the cities that Zomato’s doing well reads more like travelers’ checklist than an Indian company’s international portfolio – Zomato’s a big player in places like Auckland, Melbourne, Dubai, Manila, Istanbul and Jakarta.
There are some names that are conspicuously missing in the list, most particularly the US cities which would’ve come to Zomato’s portfolio with the acquisition of UrbanSpoon. But Goyal has earlier said that Zomato wants to focus on markets where it can be the dominant player, and the US, which is heavily dominated by Yelp, doesn’t seem to figure in Zomato’s future plans in a big way.
Instead, Zomato is focussing on smaller markets, such as Auckland in New Zealand. Goyal goes on to explain that even though Auckland is small (you can fit 42 Aucklands into NCR), and has fewer listings than NCR (6k compared to 16k), the higher average order value in these markets, thanks to dollar rates, could make these cities crucial to Zomato’s overall business.
And perhaps the number that jumps out of the report is this – 80% of Zomato’s traffic comes from outside India. Zomato started its international expansion just 4 years ago. Since that time, its number one spot in the restaurant reviews category in India has been untouched, and after waiting for the longest time to jump in, has also become a big player in the food ordering market . All this while, it has been furiously expanding internationally, so much so that a vast majority of its users are not Indian.
While there are still the niggling questions of profitability, one thing’s for certain – Zomato’s gone international in a way that has no precedent in the Indian consumer startup ecosystem.