Zomato becomes first profitable Indian eCommerce unicorn

Valued at just over $1 billion, one of India’s only eight unicorns, Zomato, has become a leader of sorts by achieving the Indian eCommerce industry’s most coveted objective — profitability.

The online restaurant guide on Monday announced that it has become profitable, after achieving operational break-even in six regions including India, the UAE, Lebanon, Qatar, Phillipines and Indonesia.

“We are profitable in 6 of the 18 markets, we are the market leaders in,” Zomato Founder and CEO Deepinder Goyal said. Zomato is currently a platform for over 1.4  million restaurants across 23 countries.

“This is a great confidence booster for us and now is the time to double down on growth, and what I call defending our turf in the markets we are strong in,” said Pankaj Chaddah, Co-Founder of Zomato.

Customer acquisition

In an interaction with Deccan Herald, a senior company official said, “Till now we have been extremely frugal and conscious about marketing, with almost no investment going into customer acquisition. Profitability helps us invest prudently and proactively in this.”

“Razor sharp focus on revenue and prudence on cost, have helped us attain profitability,” the official added. Some 22 per cent of the portal’s traffic and 35 per cent of its revenues come from India.

“Profitability helps us re-invest back in our own growth and grow at the pace we desire. There will always be parts of a startup’s business which are mature and stable. And there will be parts where we experiment, create chaos and learn by doing. Both these parts need to co-exist for a startup to grow sustainably as well as not lose the startup ethos,” the spokesperson added.

For an ecosystem that reckoned with parameters like customer acquisition rate and gross merchandise value, startups including Myntra and even Pepperfry are finally talking about profitability. 

“We have evolved from trying to do everything at the same time, to choosing our battles and focusing on a few things at a time, revenue included. And that has helped us extremely,”  the spokesperson said.