Zomato: a shining armour in the foodtech sector

Abstract

ABSTRACTPurpose – The purpose of this case is to understand and study the life cycle of a technology start-up (Zomato in this case) right from scratch to its growth and consolidation phase. The consumer’s approach for information and the choice of decision-making related to products and services have changed considerably in the digital era. Zomato is one website/application that has pioneered the online search for information related to restaurants in India. The case tries to evaluate the opportunities and challenges faced by a start-up in an extremely competitive industry and deliberates on how an online restaurant discovery business can be monetized into a highly effective and profitable business. It also examines the diversification strategy (natural and acquisition) employed by Zomato.Design/methodology/approach – The case uses secondary research method. The information, interview excerpts and data related to the company are gathered from different sources such as online databases, magazines, personal blogs of founders and company websites. The case covers a wide range of topics and can be helpful to undergraduates, MBA students and executives in courses such as entrepreneurship, digital marketing, strategic marketing, and marketing management. Majority of the students and executives are familiar with the company and their personal experiences can definitely improve the class discussion.Findings – This case identifies the different factors that were instrumental to the success of Zomato, its various revenue sources, its development through new products and services and growth expansion through acquisitions. The company which was primarily known for restaurant reviews gradually expanded into other areas of foodtech business like online ordering and delivery of food, table bookings, and developing applications software for managing the operations of restaurants. Soon after conquering the Indian market, Zomato successfully expanded to international markets particularly Europe, US, UK, and Middle-East.Practical implications (if applicable) – India is at the cusp of a big e-commerce revolution. In the last 4–5 years, the e-commerce industry in India has witnessed a lot of activities. Many new companies have entered the arena, some got merged, a few got acquired and some had to shut up shops. The hottest trend which is driving the market today is of aggregators and one such aggregator market is the foodtech sector. In the Indian start-up e-commerce industry, Zomato is one tale that every Indian entrepreneur will want to imitate. It is one inspirational start-up that gives insights into inventive marketing techniques and services and shows how to diversify risk by getting into other similar businesses and when and how to opt for natural growth and expand through acquisition.Originality/value – The Indian technology start-up ecosystem is currently in an embryonic phase and companies are still trying to figure out the best path to success. This case gives an insight into the online restaurant discovery market and Zomato’s rise in the highly cash-risk industry. It provides a step-by-step analysis of the various strategies implemented by Zomato in different situations. The case study helps to enhance the existing research done in the field of entrepreneurship and marketing management. It provides the budding entrepreneurs and marketing practitioners a bird’s eye view to building a company from zilch.