In an attempt to boost its revenues, online restaurant discovery site Zomato is planning to start delivering food soon.
According to sources, Zomato plans to start the service in another few weeks and has carried out some third party transactions on a pilot basis.
At present, Zomato allows consumers to read menus across restaurants in 24 Indian cities but a consumer has to still make phone calls to the restaurant to place an order.
Deepinder Goyal, Founder of Zomato, was not available for a comment. In the past, Goyal had always maintained that the company will never enter into online food ordering business. The reason was lack of customisation, technological issues and poor logistics. However, India has witnessed the emergence of several online food ordering platforms such as Foodpanda, Tastykhana, JustEat and JustDial. These portals have not only been able to bring on platform thousands of restaurants and consumers but have also attracted a few international investors thus proving that such a model would work among the Indian consumers.
Sanjay Mehta, a serial entrepreneur and angel investor, was of the view that, “it was a logical extension/forward integration for Zomato and was expected sooner or later. I think they would soon get into restaurant reservation too.”
He also added that as the online food ordering market was growing fast, Zomato has started witnessing pressure on revenues as listings and reviews do not fetch volumes. Zomato, backed by Info Edge and Sequoia Capital, is valued at ₹1,000 crore. It earns revenues from advertisements that restaurants post on its site.
Shachin Bharadwaj, founder of Pune-based Internet start-up Tastykhana, said that globally food discovery-only sites are struggling with the reviews and listing business as they have been overtaken by ‘selfies’ and Instagrams. Tastykhana is national player with presence in almost every major Indian city and posted an annual revenue of ₹12 crore last year. It is targeting ₹35 crore in 2015.
Growing marketOnline food portals have witnessed over 150 per cent growth in their orders last year on the back of increased Net penetration, growth in smartphone users and changing lifestyle.
In 2012, the market stood at ₹1,000 crore and is all set to touch ₹6,000 crore by 2017.