[TIL] Evaluating Business Decision: Expansion Strategy for Zomato

I would have never guessed the answer to this poll lmao. As a shareholder, I would not want anything apart from 4. No expansion until you are the only king in India.

Zomato can try with minimum cash, looking at their way of marketing.

Not heavy cash, looking at the regulatory hurdles and being non-local.

You are looking at it too narrowly as only a food delivery company. Here what I think:

Based on zomato commentary it seems like food delivery is saturated & Blinkit is the next growth lever. Zomato along with Blinkit has a daily relationship with customers. When you have such strong relationship brands in other parts of the world have added more verticals vs. growing in other markets. Other markets were explored by all of these guys but eventually everyone realised that I am a gunda of only my gully. Zomato delivery was already doing great in UAE but they sold it off because fighting home market was support important & it still is.

In this scenario, I would say that zomato should focus more on share of wallet. Blinkit is enabling that by targeting groceries + some part of ecommerce now. The type of consumers who can afford to spend on food outside & also use Blinkit are your India 1 and above. These folks are loaded with discretionary income & if we have learnt anything from Goldman Sachs recent affluent Indian report the biggest sector to benefit from this is going to Travel.

Now, hold your horses, you might be wondering what can zomato do differently in travel and go against likes of MMT. Well first they are 2x the size of MMT, travel business is not as operationally heavy as food or grocery delivery. Today most of the brands that exist in travel - the only difference in pricing is the bank offers that they get at the end. I am sure there isn’t a single bank in India who doesn’t work with Zomato + Blinkit.

It will all come down in brand marketing and positioning. How people got used to Blinkit via zomato app and eventually it took off. Zomato’s brand already stands for going out - be it restaurants or further out to their zomaland live concerts to even stand up comedy show tickets that they sell. Travel will be an extension of that same core brand ethos - going out.

This can potentially give them another multi-billion dollar market. Can’t type more..

Anyone with logic and knowledge of how Indian startups have operated globally and its results, would choose no. 4

Identify the key competitors, and try game theory to identify what outcome suits best, that's how it actually would/should be done

Great question! If this were a consulting interview, option 4 would ideally be the answer to "structuring" this problem: ie, company capabilities, market capabilities and limitations.

But honestly? I was there in Zomato, I'd ideally want to build a strategic alliance with the local players just to check if the market research's results are executable. so, option 3

First start getting less commission from restaurants. They are getting 25% in rural non popular hotels and ~16% in popular hotels

Don’t know if this was meant as a hypothetical scenario but Zomato has already tried European markets (Poland) and failed

Look at it from a european angle, With their host of GDPR, Etc Etc rules. It makes sense to start slow, get traction and then increase speed.

I personally think that retail players like livespace and Lenskart can run their business in other countries because of their products and their business model, which make them different from others but in the scenario of Zomato mostly in Western European countries this type of service is provided (don't know about eastern part) rather that Europe should be focused on underdeveloped of developing countries in which they can easily sustain in the market.