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Update: Zomato Breaks Even In India; Expands To New Zealand

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Update: Info Edge said on its earnings conference call that Zomato’s Indian business has broken even, even as it expands internationally. While specific revenue figures for Zomato were not disclosed, the company said that Zomato and Meritnation had combined sales of Rs 8 crore, but lost only Rs 6.4 crores at EBITDA level, around 25% lower than last year.

Earlier (July 22nd): Continuing its international expansion, online restaurant and events guide Zomato has now entered New Zealand by launching operations in Auckland and Wellington. It has also strengthened its operations in South Africa and United Kingdom by launching operations in Cape Town (South Africa) and Manchester & Birmingham (United Kingdom) respectively.

Back in India, Zomato has added Guwahati section and now offers listings for 14 Indian cities. Globally, it now claims to offers listings from 114,500 restaurants across 27 cities in eight countries including India, UAE, Sri Lanka, United Kingdom, Qatar, Philippines, South Africa and New Zealand. Zomato CEO Deepinder Goyal informed that they plans to expand to Australia, Turkey and Indonesia over the next few months. They also plan to expand to continental Europe, South America and strengthen its presence in Middle East and South-East Asia during the current calendar year.

Investment: As per a PTI report citing Goyal, Zomato plans to invest $2.5 million for these new five cities. The company told MediaNama that this is a combined budget set by them for these regions but it declined to share any further details on this.

Website Revamp: Coinciding with this International expansion, Zomato has rolled out a new redesigned version of its website, bringing in new features like reformatted search results which now clubs all the listings of a specific fast food chains into a single listing, ability for advanced users (or Super Foodies and Connoisseurs as Zomato calls it) to report reviews as suspicious or fake, threaded comments to allow users ask follow up questions in reviews and the ability to allow users send private messages to other Zomato users and upload photos to restaurant listing pages.

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It has also introduced personalized ratings which allows users to view restaurant ratings only from their social media connections and people they follow on Zomato. We feel this feature is quite significant since we tend to believe reviews from our social media connections rather than an anonymous person.

Zomato Homepage

Home Delivery In Future? Whats particularly interesting is that Zomato now allows users to explore restaurants based on the occasion (home delivery, meals, drinks or catching up with friends) rather than location in its previous avatar. We wonder if this is just a precursor for the company to launch an online home delivery service. While Zomato has been really vocal about not launching an online home delivery service earlier, it has a pay per lead model with select restaurants, through which restaurants pay Zomato for every conversion or any food delivery order.

Besides this, Zomato has now started showing reviews from only approved reviewers on its site and claims to have put in place improved checks for spam reviews on its site. All new reviewers will have to at least publish 10 reviews and get their profiles approved by Zomato moderators before their reviews becomes publicly visible on the site. We believe this feature will probably avoid incidents like the recent Lemp Brewpub incident where the ratings of the restaurant suddenly dropped significantly, following a barrage of negative comments in a short period.


Chart: Zomato Ad Revenues vs Event Ticketing Revenues For FY13
Zomato In FY13: Rs 11.38 Crore Operating Revenues, Rs 10 Crore Operating EBITDA Loss
Zomato Expands to Philippines; Dubai Operations Break Even & Future Expansion Plans
Info Edge Invests Rs 55Cr In Zomato; Has 57.9% Stake; India EBITDA Break Even

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