Zomato describes itself as a restaurant search and discovery service consisting of a website and mobile phone app. Think TripAdvisor but only for Restaurants. It's a classic love triangle of restaurant owners, reviewers and of course searchers who are assured by Zomato that they will "never have a bad meal".
But this is no Ménage à trois with consenting adults. Just like TripAdvisor, almost all restaurant managers have their own love/hate relationship with sites like Zomato.
Unfortunately for hotels, you are not immune from being affected by Zomato. We recommend branding your restaurant with a name separate from your hotel to both insulate your hotel from bad restaurant reviews, but also because it probably operates as a separate entity in terms of marketing.
Most concerns from restaurant managers in hotels fall into the following categories:
- People can leave unverified reviews just like on TripAdvisor (e.g. that restaurant up the road).
- Zomato encourages uploading of photos which are often not flattering due to ambient lighting etc. There is simply no way to take a great photo using your mobile phone camera with current technology in a dimly it restaurant (without the use of flash).
- Management is unable to edit their responses after being sent.
But it all seems to work at least from a content generation perspective, people just love sharing their food experiences online and will continue to do so. Online review sites will come and go, but the basic concept is with us for forever—like it or loathe it.
The problem with these type of sites is not the number of people willing to share their "expert opinions". The problem is monetising the service while still providing accurate recommendations. Or in other words - how can a review site possibly take money from restaurant owners without this affecting the quality of their results?
The simple answer is that they can't in the long run. The whole thing just falls apart like a bad fondue.
What usually happens is that they get listed on the stock exchange then have shareholders to answer to. Thus begins a mad struggle to find alternative revenue streams other than sponsored listings, which as I have reported on this site recently—are a recipe for disaster.
Founded in India in 2008
Founded in India in 2008, Zomato was operating in 23 countries until May 2016 when it pulled out of nine of these "high burn markets" to preserve cash going forward.
Zomato has been the darling of the Indian tech startup community for some time. It continues to get favourable press from the media, despite some less than stellar financial results of late.
The latest article from Economic Times India suggest their revenues have doubled which sounds great. Until you factor in that their expenses have actually quadrupled over this time according to this article.
The Economic Times India article states:
The net loss for the India region shot up to Rs 247 crore for the fiscal, up more than three times from Rs 62.3 crore loss in 2015.
Unfortunately the math used is somewhat biased. A loss of 247 crore (that's about $37 Million dollars) over 62.3 is actually 3.96 times the amount of loss. They are being very kind suggesting this loss is 'more than three times'...
On a positive note, they have received funding as at September 2015 for an additional $60 million of capital which should see them through at least another few years.
It is also worth noting that they recently purchased UrbanSpoon for a reported AUD$82 millions dollars announced in July 2015 at the Financial Review.
Since January Zomato has hired 150 people and established offices in Melbourne and Sydney.
Unfortunately for the tax man, they also just wrote off approximately $15 million in the value of the Urbanspoon acquisition.
If that wasn't bad enough press, HSBC has recently written down the value of Zomato by a cheeky half a billions dollars.
So we have a somewhat unflattering financial picture of Zomato as at July 2016, with HSBC recommending they focus on the 'last mile delivery' and online ordering to propel revenue. Unfortunately for Zomato, that's the really hard stuff to do well.
Their reliance currently only on advertising revenue through what are effectively banners is laughable. Banner advertising fell out of favour years ago. It might work better in less developed countries like India but the fact is that people have been trained to ignore banner advertisements.
I would not advise our clients to purchase or even test banner advertisements on Zomato. There are much better channels to test and dip your toes into.
The addition of subscription revenue by charging Restaurant owners is also questionable. Why should restaurant owners have to pay to access features they should already be entitled to and don't cost anything to provide?
So the chances of expanding and realising any significant revenue gains for Zomato in Australia and New Zealand look to be limited at least in the short term.
The Ingratiating Badge System
Their badge system which ingratiates reviewers with progressively grander titles seems to be an inherent negative for restaurant owners.
As reviewers post more and more reviews (not subject to the quality of the review mind you) they are automatically rewarded with more flattering titles.
People who post a review on Zomato are known as "Foodies".
I think the Urban Dictionary sums this up best with their definition of what a foodie really means to many people:
Foodie - A douchebag who likes food (URBAN DICTIONARY).
So you effectively start off as a douchebag on Zomato and it just get's worse from there ;)
Other titles include becoming an "Expert" if you simply write 10 reviews within one neighbourhood. This is where it all becomes a little silly.
Reviewing, or even going to ten restaurants in your local area does not qualify you as an expert. Ten or more full time years focus, discipline, hard work and passion makes you an expert in something.
I also take exception to the title they give they very top reviewers—the Connoisseur. The problem with this is that it's purely based on the number of reviews that person has contributed. There is no consideration of the true meaning of connoisseur—someone with taste and class.
Zomato has openly admitted on Quora that they used gamification features to triple the number of reviews.
Once we had critical mass of reviews, we brought in some "gamification" features which literally tripled the inflow of quality reviews overnight.
So here we have the real reason behind the success of Zomato thus far in terms of attracting the quantity of reviews. It's ingratiating badge system that people just can't resist because it gives them a rush of self-aggrandisement.
This system also works against the restaurant owner or manager. Because of their lauded status as a "Super Foodie" or "Expert" this seems to make people even more fussy than they otherwise should be.
They may think their standards should be much higher (after all they are "experts"!). I wonder if this is the reason that the overall review scores on Zomato are much lower than TripAdvisor for almost all restaurants.
Also the Zomato review scores are derived from a point system that is colour coded and starts at green at 3.5. This seems to make people reluctant to go much further than 3.5 stars unless they were really impressed.
Overall Accuracy of Reviews Versus TripAdvisor
Zomato seems to be used by a younger demographic who favour more casual and fast casual dining over fine dining despite the accolades that Zomato bestows upon its user base. TripAdvisor provides far more accurate and realistic overall scores based on their popularity index in my opinion.
Or in other words, TripAdvisor seems to be for the grown ups who for the most part can write more than one paragraph.
All Locus Focus clients are hotels, which of course may have both cafe and restaurant brands contained within their hotels. It's a great idea to have a separate "sandboxed" or insulated Zomato listing for each restaurant in your hotel.
The same goes for TripAdvisor, as people tend to write more negative reviews about dining than they do about accommodation. So containing your online reviews within the brand of the restaurant is a good idea to protect your Accommodation review ratings.
The standard of genuine expert reviews on Zomato is of a much lower quality than TripAdvisor despite their ingratiating badge system, however that is not saying much. They use "gamification" tactics to encourage more reviews and reward people for uploading a quantity of both reviews and photos.
There is no emphasis or reward for quality. Photos that are uploaded are often terrible in terms of ambient lighting, composition and clarity. I therefore see absolutely no reason to promote Zomato and encourage diners to write reviews there.
As a hotel restaurant manager all you can really do to work with a site like Zomato is to stick to the best defensive practices which are:
- Ensure you have your own quality, professional photos and in particular a suitable cover photo.
- Respond to all reviews on Zomato according to best practice. Be very aware that you cannot edit a review response once posted which is of course, insanely unfair.
- If you are angry about a diner that has posted a false review—report it to Zomato but don't expect miracles. Then wait a day or two until you have calmed down before replying!
- Zomato does not allow reviews from diners who have not actually dined at your establishment. If their reviews includes any comments such as "I didnt even eat there" this can be reported and removed according to Zomato terms.
- Do not under any circumstances offer discounts or incentives to diners who complain on Zomato via the public replies. This only encourages more negative reviews and is against Zomato terms.
- Optimise your listing on Zomato by claiming it and ensuring the details are correct. Upload your menus according to their specifications and make sure these are up to date and part of your workflow checklist whenever you change the menu.
As with all services like Zomato—the more you know about the way it works the better. As they say, better the devil you know...
It is absolutely part of your online presence and should be part of your reputation strategy, even if you are an unwilling participant!
Chris Jack is the editor of Locus Focus and a professional hotel photographer based in Brisbane with over 20 years experience in digital marketing. He also hosts the weekly "Sharper Hotel Marketing" podcast.