BackDeepinder Goyal | The food network
The CEO and founder of Zomato on why a Google or a Facebook is unlikely to be born here
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Restaurant search engine Zomato turned its founder and CEO Deepinder Goyal into a “foodie" over the course of five years of cataloguing places to eat, in India and around the world.
When we meet for lunch (chicken tikkas and a club sandwich), Goyal says he picked the Oberoi hotel, Delhi, after looking at options on Zomato, then grins quickly and I realize he’s joking.
Dressed casually in a T-shirt and jeans, he doesn’t look like the successful head of a fast-growing corporation, but rather like the young programmer that he still is. He is slim, so when I ask if he eats out a lot, he laughs, and admits that when the company first launched, under the name Foodiebay.com in 2008, he was an “enthusiast. I really liked food, I love eating pretty much everything still, but it’s taken a few years to learn about food, to understand different cuisines".
Renamed Zomato (to avoid confusion with eBay) in 2010, the company has rapidly grown to be one of the better-known names in Indian online services. In the earnings call of its primary investor Info Edge, it was revealed this July that Zomato’s business is now profitable in India.
Goyal, “30 and a half", graduated from Indian Institute of Technology Delhi in 2005 and joined consulting firm Bain and Company in the same year. But he quit his job in 2008, to start his own company—the idea came to him during an office lunch, where everyone started searching for takeaway menus from nearby restaurants to find out what was available. He realized this was just inefficient, and got started with Foodiebay.com, and has been in “start-up mode" ever since.
The focus has been on growing in reach—Zomato is now active in 26 cities across eight countries. “We go where there is a need for the service. A small town with a hundred restaurants doesn’t really require something like Zomato because people are familiar with the good options already. We’re looking at cities with a minimum of 500 restaurants," says Goyal.
“Launching in a new market isn’t expensive," he adds, “but the day-to-day running of the office is. So Manila was the easiest launch we had, while London will take the longest to break even."
To make the most of this, the company looks at localizing content for each region, so you get a customized experience wherever you are. “The kind of data we gather for each market is different, so in London, we’ve got a fish-and-chips section. People were searching for that a lot. Street food is a popular tag in Delhi. But it’s not used in Mumbai much."
This is made more complicated by the variations in usage: Bangalore, for example, sees most users looking up restaurants and menus during the week, while Delhi sees a surge on weekends. All this data has to be analysed, and used as the basis for planning localization of the content on Zomato’s website and apps used around the world.
As the company grows, it’s also coming into contact with international players, with large, established audiences. “We’ve mostly stayed away from (social reviews site) Yelp, except in London, which is a calculated risk," he says. “In all the other markets, we’ve dominated with no major competition. We’ve been able to figure out our own unique advantage, and with London, we believe we’re going to be able to do some subtle things in a better way."
Goyal says they collect all of their data on their own, by hiring people to physically visit restaurants. “We print out maps of the neighbourhoods, and hire people to walk down the streets," he says, “and these people go to the restaurants on their route, getting menus, contact information, all the other data on Zomato." Once the person getting data visits every restaurant on their street, they cross the path out on the map, so that effort isn’t duplicated in getting data.
This intensive process is obviously better suited to a country like India, where manpower is cheap, and computerized databases are largely non-existent. But even in London now, Zomato has listings of over 18,000 restaurants.
While Zomato has been able to build a successful business that’s breaking even, Goyal isn’t pleased with the start-up situation in India. “It’s a new concept here and when we started in 2008, early stage and angel investors didn’t even exist. In 2008, people were turning us down because we had zero revenue, even though we had a model in place."
Despite a risk-averse market, there are some investments and new ventures coming up, but Goyal says this isn’t enough. “We won’t get a Google or a Facebook here because no one would fund them. People are starting to get comfortable with proven ideas only now," Goyal says.
While he is keen to open up more markets and increase Zomato’s reach against international brands like Yelp, he says the company isn’t going to lose focus and add features that they aren’t ready for in the rush to grow.
The other way would be to let restaurants handle deliveries, and act as a payment medium. Goyal isn’t keen on that idea either. “If we don’t handle fulfilment, then we can’t guarantee the quality of service. But the customer doesn’t think about that—they place an order with Zomato, and if there is a problem, then the customer loses faith in both the restaurant and Zomato. That’s not a good situation for us."
As the industry matures though, Goyal thinks it will be possible to see more features get added, but he says it will take at least three to four years to happen.
Along the way, Zomato’s goal is to help build up “a foodie culture" in India. “Indians love eating, but there aren’t many foodies here," Goyal says. “There aren’t too many people who care about authenticity, or have too many questions about food. This is changing now, with Bangalore and Mumbai at the forefront, and we want to be a part of this movement."
Goyal says Facebook has also given a big boost to foodie culture in India. “These groups and blogs have been able to build strong communities around food which is great. People are asking really smart questions, and they’re even getting answers now. From a business perspective, this is pretty much parallel to what we’re doing at Zomato, and even helps, because people link to us from the groups. In the interest they are generating about food, I think it’s great."
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