In the first part of our interaction with Ritesh Dwivedy, Founder Hungry Zone and CEO of JustEat India, he spoke about the business of home delivery, table reservations, partnerships and the technologies used in JustEat.in. In this part, he shares about the marketing, branding, competition of JustEat India, acquisition by JustEat UK and scaling post acquisition.
Marketing, Branding and Competition
MediaNama: How do you market JustEat?
JustEat: Most of our marketing happens online. We focus a lot on search engine listings, ads, restaurant searches, Facebook, social media marketing. Apart from that we also do offline marketing by branding carry bags, giving out branded stickers, placed branded banners at restaurants etc.
MediaNama: How did you have to change your branding and marketing strategy when you rebranded Hungry Zone to JustEat?
JustEat: When we were Hungry Zone, we were present only in Bangalore. Therefore we thought that aligning ourselves with a big brand would help us in the long run. While we rebranded ourselves in Bangalore, we launched in Delhi and Mumbai at the same time. As for informing our customers in Bangalore, we educated them through PR, our customer service, sales guys and through our partner restaurants.
MediaNama: Why do you not have ads on your website?
JustEat: We can show ads on the site even now and we do some form of advertising for restaurants on a small scale. But more than that, we try to get business for them. If we can get business for them, we can add ads at anytime. We will be exploring ad sales in a large scale somewhere in the future.
MediaNama: Who do you see as competition?
JustEat: The real competition for us is the traditional form of ordering food which is phone ordering. Any restaurant that gives phone numbers is competition to us. There are small players in this space in Delhi, Bangalore and Chennai but there aren’t too many big player yet, since this space is still nascent.
MediaNama: What are you doing to tackle competition?
JustEat: In a way we want competition to exist. The market is large enough to have more than one player. Even in case of any competition, the best way to insulate from it, is to have the best processes. The business of home delivery is such that the problems are all mostly operational. So the company that is able to provide users with a seamless experience will be the winners in this case.
JustEat’s Acquisition of Hungry Zone
MediaNama: What motivated you to sell out 60% of Hungry Zone to Justeat?
JustEat: We had raised an angel investment from IAN in 2008 and the funds were used to check and test if the idea is working, is it scalable, is there a market available, and if we could solve the problem. Once we were satisfied with the answers we got, we started looking out for our next round of investment. That’s when we met JustEat, and we realized that they don’t just have money but they also have domain experience in other countries. So apart from money, they will also bring experience and that’s why we chose JustEat over any traditional VC.
MediaNama: Do you think you would have grown as much had you not sold out to Justeat?
JustEat: We wouldn’t have grown as much as we have grown now. For instance, if we start our service in a new city, we have to spend few months to get partners. Only after we get partners, we will be able to market the service to consumers. It takes time to sign up the right partners and we have to spend money till that point on staff and setting up the operations in that region.
MediaNama: What is the level of involvement or hand that JustEat UK has in decision making in India?
JustEat: It’s not the kind of relations that typically people think of. People feel that there will be interference but it is not so. Since they have not worked in a developing country market, all their learning from the developed country markets have to be customized to suit the Indian market. They have been very co-operative and it has been a pleasure working with them.
MediaNama: What has changed since the acquisition?
JustEat: The biggest change is that we have grown considerably from less than 20 to 100 people and from a base of 500 restaurants to 2,500 restaurants. We have also learnt a lot about the cities like how Bangalore is different from Delhi and what we need to do in Delhi to scale business which is actually different from Bangalore. What works in Bangalore doesn’t work in Delhi.
MediaNama: Is your company profitable?
JustEat: Not really. We are in the growth phase and we are investing in becoming the one-stop food solution for all so we haven’t really started making profits yet.
MediaNama: Have you scaled as expected since JustEat bought out stake from Hungry Bangalore? In 2011, you had mentioned that you are planning to expand to 22 cities by the end of 2012.
JustEat: We have not really scaled as expected. We initially thought that we know Bangalore because we have been around. But when we launched in Bangalore and Mumbai, we realized that this business is not a cake walk. The problems double when orders go up. All orders are concentrated in the same one hour during lunch and dinner and we need to process it to restaurants in 1 minute and they have to deliver the food within 30 minutes. In traditional e-commerce, they can time to deliver a book in 2 or 3 days. But if we are late by 5 minutes in delivering food, customers become angry. That’s when we realized that we need to automate everything without human intervention to make things faster and smoother. So yes, we will be growing but at a little slower rate than we had initially planned.
MediaNama: What has slowed down your scaling process?
JustEat: It is mostly the complexity of operational set and the time it takes to build a network of restaurants in a city.