Published in BRW and Australian Financial Review
- In The News
- Published: 06 August 2015
If you’ve Googled a restaurant recently hoping to check out its rating on Urbanspoon you’ll have noticed something strange – it no longer exists.
In January Indian start-up Zomato acquired the restaurant reviews site for an estimated $US60 million ($82 million) and in June Urbanspoon dissolved without fanfare, with its traffic redirected to Zomato.
The move has triggered angst from some of Urbanspoon’s loyal users, with a few taking to social media to voice their frustrations.
But independent brand analyst Michel Hogan said Urbanspoon users would most likely adapt to the new platform.
“Urbanspoon had been around for a while. People had a relationship with it and trusted it. But that’s clearly not what Zomato was looking to acquire,” she said.
“Zomato were interested in the website traffic. It will be interesting to see what happens to Zomato’s traffic and if people just say ‘oh well, we liked Urbanspoon, but we’ll adjust’.”
Ms Hogan said that more often than not, people adjusted quickly to losing brands. “We transition what we think and how we respond based on what’s available to us,” she said.
“I don’t know if there’s any company on the planet where if it disappeared tomorrow the public wouldn’t adjust.”
But, there’s a chance the takeover could have opened up space for a new competitor to gain traction in the market. Some Urbanspoon loyalists are now looking for different reviews websites.
And if Zomato does maintain its market-leading position in Australia, Ms Hogan said this would not guarantee long-term success as people fundamentally disliked monopolies.
“If Zomato’s the only player in town, then there’s a chance someone else will pop up,” she said.
“People don’t like not having any choice at all. They don’t mind if there’s only two but monopolies aren’t viewed kindly.”
Zomato’s Australian country manager Kate Parker said in the first month since the platform’s merged, Zomato had maintained the traffic and engagement levels of Urbanspoon.
“We had a really loyal and active user base with Urbanspoon and it is absolutely our intention to keep the best of Urbanspoon and add in new and interesting functions from Zomato for those users,” she said.
“When we move into new markets ... we learn new things and add functions to the platform. In Australia, there is a really large and active blogger community. Urbanspoon had the Spoonback feature which linked to a blogger’s post. Now that’s available on Zomato.”
FOSTERING NEW COMMUNITY ENGAGEMENT
To help with public engagement and brand awareness, Zomato has hired a community engagement team which meets Australian food bloggers and organises events in addition to traditional advertising and social media.
Since January Zomato has hired 150 people and established offices in Melbourne and Sydney. Its local hiring spree is not over yet – the business is aiming to employ another 190 people in the next few months.
The platform is also looking to win over restaurants with its suite of business-to-business products which are in development.
“We’ve launched an advertising product that lets restaurants present to people looking for a restaurant in their area,” she said.
“Online ordering and a white label app for restaurants will be launched in Melbourne next month, followed by table reservations, cashless payments and a restaurant point-of-sale system.”
Zomato, which was founded in 2008 by Deepinder Goyal, operates in 22 countries worldwide. To expand its footprint, Zomato went on an acquisition spree in the second half of 2014, also buying dominant restaurant search platforms in New Zealand, Poland, Czech Republic, Slovakia and Italy.
Following the acquisition of Urbanspoon, Australia became Zomato’s third-biggest market behind India and the United States in terms of traffic.
But Marketing Eye marketing manager Emma Castles warned that many companies underestimated consumer loyalty.
“Businesses can think that by providing a cheaper, more attractive solution it’s enough to retain customers but it’s not always the case. People want a connection to the brand and want to feel part of the community,” she said.
“With Zomato’s new name, new branding and new rating system, it was too much too quickly.”
Ms Castles said Zomato’s focus looked to be more on building relationships with restaurants and food bloggers, rather than Urbanspoon’s existing clientele.
“It will need to leverage social media for the marketing campaign. That’s the only way to go. There’s only so much that press releases can do,” she said.
“It also needs to look at the platform, work out who its ideal customer is and then do some deep diving through the analytics to ensure they build their relevancy and rebuild the trust.”