It's 'stupid' to go app only, says Zomato's Goyal

18 Sep, 2015

Zomato co-founder Deepinder Goyal has joined Snapdeal CEO Kunal Bahl in denouncing the 'app-only' strategy adopted by several consumer internet firms.

"I think it is stupid (to go app-only). If you have customers on the web why wouldn't you follow them?" Goyal, who is also CEO of the restaurant listings and food delivery firm, asked in a recent interaction with

He was responding to a question on whether Zomato would junk its website presence in favour of app-only or mobile-only usage. The debate over the app-only approach took an interesting turn recently with Snapdeal's Bahl jumping into the discourse. In an interview with The Times of India, Bahl said that Flipkart-owned Myntra's move to morph into an app-only player was the 'dumbest' and the 'most consumer-unfriendly idea.' Bahl added that 80 per cent of Snapdeal's users said in a recent survey that they wanted the PC site to remain.

Post Myntra, there was talk of Flipkart shutting down its website for transactions. This was to happen starting September 1. While the company continues to showcase its mobile-first approach, all indications are that the app-only strategy has been put on the backburner for the time being. Flipkart is said to be evaluating the impact of such a move on big-ticket items such as furniture and appliances. If industry insiders are to be believed, the app-only move has been permanently scrapped. However, this could not be independently confirmed.

Dating property Truly Madly, quick service restaurant and delivery chain Faaso's and cabs aggregator Ola are the other tech firms which stopped web-based transactions to become app-only players.

Food delivery

In May, Zomato India Pvt Ltd, the company behind Zomato, had launched 'Order', a separate app for taking online food orders from partner restaurants.

Zomato also invested in hyperlocal delivery startups Pickingo and Grab while partnering with e-commerce logistics firm Delhivery to enable home delivery of food from restaurants and eateries that don't offer such services otherwise.

Its food ordering service was launched in the UAE last week.

"South Africa is getting launched two weeks from now and Australia two weeks after that. We would have our food ordering service in about six countries by the current year-end," Goyal added.

In the food delivery space, Zomato would compete with the likes of Foodpanda, TinyOwl, and Swiggy, among others.

While FoodPanda is known for deep discounting, the Zomato chief said his company would follow a contrarian strategy.

"We don't believe in deals and discounts. We experimented with deals on our portal; some of the things worked while some didn't. We might get forced to do it (discounting) because of competition but we don't want to burn cash," Goyal added.

"We have enough growth on fully paid customers and our average ticket size is twice of other players on the food ordering side. Our margins are good and customer acquisition cost is zero. We don't want to ruin everything," he added. Zomato has also entered into the table reservation space.

The company recently raised $60 million in a fresh round of funding from Singapore government's investment company Temasek and existing investor Vy Capital. With this, Zomato has entered the club of 'Unicorns', a tag meant for startups that are valued at over $1 billion.

Goyal believes that the money raised in the latest round would last for about 18-24 months. In terms of revenue mix, he expects advertising to be the company's biggest money-spinner at least for the foreseeable future.

"Right now, advertising is the major source of revenue for us. It will continue to be this way for a couple of years more before the transactions business kicks in," he added.

Founded in 2008 by IIT Delhi alumni and ex-Bain employees Deepinder Goyal and Pankaj Chaddah, Zomato has been furiously buying companies abroad. It has sealed close to a dozen acquisitions in the last year or so. The firm, which is currently present in 22 countries, aspires to be in 40 countries by 2016-end.