Great beginnings to aggressive expansions

In the last edition of Start-up Island , we took a look at businesses that stemmed from a personal passion and how they began churning out revenues. Both start-ups had taken their captive markets seriously. They knew there was a need apparent in their immediate environments. And often, this is how a business makes sense. It has to cater to a gap. It’s often easiest to kick off an entrepreneurial journey with an online business.

But again, being online doesn’t guarantee everything. The products and services offered have to be so relevant that the question of scaling up is almost a market demand rather than just an entrepreneur’s goal.

No shy beginning JustEat seems to have cracked nearly all of the key parameters that make it one of the largest online food ordering portals in the country.

In its first avatar , it was HungryZone. Five years later in 2011, UK-based JustEat, one of the world’s largest players in the space bought a 60 per cent stake in the business. In a matter of time, JustEat began to operate in 10 cities across India offering more than 50 cuisines. The portal’s popularity in India is significant for a global entity that is spread across 13 countries but only offers 10-12 key cuisines in most other geographies.

“Outside India, more than 60 per cent of the orders are for pizza. In India, pizza accounts for just 20 per cent of the orders on JustEat,” reveals JustEat’s Sandipan Mitra, Director, Sales and Marketing.

He relates how Ritesh Dwivedy founded HungryZone after facing challenges with ordering meals as a ‘techie’ who worked all sorts of hours. It occurred to Dwivedy that variety and convenience really mattered to most people ordering food. The premise worked – JustEat not only bought a larger portion of a successful HungryZone but also put in the funds that helped expand the business in India.

Cranking up the volumes In 2006, e-commerce wasn’t as hot a practice as it is now. JustEat’s Mitra admits that not all the restaurants they approached were sold on the idea of partnering with a portal to ensure more sales for them all. Perhaps a case of discomfort with the unfamiliar, but now more than 2500 restaurants are signed on as partners across India.

Arpita Munshi, Co-owner of Claypot in Pune, says, “From the very first month of our operations, we’ve had JustEat as partners. In 20 days, we’ve noticed nearly ₹16,000-18,000 worth of a difference in revenues because of orders coming in through JustEat.”

She adds that if a month’s sales are ₹7-8 lakh, nearly half of that sometimes comes from JustEat. And Claypot is in a developing area of Pune. With a large base of partners already covered, JustEat in India is looking at expanding to Tier-2 cities as well. However, as a result of observing how nearly 25 per cent of their orders come from mobile channels, Mitra says it wants to become a ‘mobile first’ company. “We’re looking at users who will begin with us by ordering from their smartphones and also at large conversions from the web,” he says.

In a Series C round last year, JustEat, Axon Partners and Forum Synergies poured more capital into the business in India. JustEat is in the process of making its loyalty programme stronger by tying up with banks for discounts for debit or credit cards users.

TastyKhana and FoodPanda are newer entrants. While they provide stiff competition and are well-funded, it’s JustEat’s position on the learning curve that seems to stand it in good stead. Having simply executed far more orders and thought through user-interfaces to customer-friendly mechanisms for the years ahead, JustEat takes the lead and remains the familiar friendly option in a tricky market.

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