Food-tech firm Zomato on Tuesday provided a half-yearly update of its business. While revenues have sharply jumped, burn has reduced, it stated. The company also provided an update on its now controversial Gold programme, which The National Restaurant Association of India (NRAI) campaigned against in August. The Gold programme offers complimentary food and drinks to diners.
Gold first. Zomato stated that at the start of NRAI's '#logout campaign', it had about 6,100 restaurants in India on the programme for dining out. As of today, the company has 6,300 restaurants in India on Gold - this implies that the campaign hasn't had much impact on Zomato yet.
The #logout movement started around August 14 "to detox customers from discount addiction and give the restaurant Industry freedom from aggregators who have distorted a vibrant marketplace by aggressive discounting and predatory pricing". About 2,000 restaurants initially stated that they would not be part of any "1+1" deals or where they had signed up for 50 per cent discounts on food and drinks. Much of NRAI's ire was directed at Zomato Gold.
In the half-yearly business update, Zomato stated that the company has 1.4 million members worldwide on Zomato Gold who are using the programme more than thrice a month. "Gold is a niche, but a large loyalty program. Having said that, so far, less than 5 per cent of restaurants participate in Zomato Gold, and less than 5 per cent of our MAUs are Gold members," the firm said. It further added that from a restaurateur point of view, Gold is not for everyone. "We always encourage restaurants to determine if participating in Zomato Gold makes commercial sense for them. Some restaurant owners in India campaigned against Zomato Gold last month; we engaged with the restaurant owner community and rolled out some changes to the programme that were widely accepted by most restaurants, as well as users - thus creating more balance in the programme. A number of restaurants who have returned to Zomato Gold post these changes have seen a 100 per cent increase in revenue," the company mentioned in a note.
In terms of revenues, in the first six months of 2019/2020, Zomato stated that it has exceeded its last year's "like to like" annual revenue. Revenues in the first half came in at $205 million compared to $63 million in the year-ago period. The monthly burn rate, the firm noted, is down to 60 per cent of what it was six months ago. "We achieved tremendous results in optimising our costs, without affecting new product launches or innovation," Zomato said.
The company's food delivery service was operational in 200 cities in April 2019. Today, that has grown to over 500 cities in India. The order volumes in the top 15 cities have doubled over the last 12 months, the note mentioned.
The number of restaurant listings globally, meanwhile, has grown from 1.2 million in September 2018 to 1.5 million by September 2019. "Half of this increase comes from India alone - this huge increase is testament to the pace at which restaurants are mushrooming all over India, and grabbing share from home kitchens," Zomato stated. The table reservations business has grown "from 800,000 booked covers in January 2019 to 1.3 million booked covers by September - organically and with zero investment".