Zomato Türkiye

What did it do?

Zomato, the India-based restaurant discovery platform, began operating in Turkey in late 2013. In January 2015 it bought Mekanist, a Turkish venue review site, and moved its content onto its own platform. Users could look up restaurants' menus, prices and reviews; in 2020 online food ordering was added to the platform.

Why did it shut down?

Zomato first closed its Turkey office in May 2017 and began running the operation from abroad. According to Gurme Ajanda, the company had said it could not reach sufficient profitability in Turkey. It returned at the end of 2018 on the grounds that traffic had stayed high, but according to egirişim it failed to achieve the results it wanted over more than a year. Cumhuriyet wrote that the company could not cope with mounting losses and had already halted its online ordering service. The Turkey office closed permanently on 26 February 2021.

The story

Zomato's Turkish story actually begins with a home-grown start-up. Mekanist, founded in January 2007 by Ali Servet Eyüboğlu and friends during their university years, had become one of Turkey's leading venue sharing and review sites. It had raised around €5 million in total from Silicon Valley-based Pond Ventures and angel investors.

New Delhi-based Zomato entered Turkey in late 2013. In January 2015 it bought Mekanist; Eyüboğlu became Zomato's country manager for Turkey and the two platforms' content was merged. According to Webrazzi, the combined service covered more than 50,000 restaurants across Turkey. But Eyüboğlu left his post in November that same year.

In May 2017 Webrazzi reported that Zomato would close its Turkey office and run the operation from abroad. As of 2016 the platform listed more than 27,000 venues in Istanbul. According to Gurme Ajanda, the company had said it could not reach sufficient profitability in Turkey and lacked sufficient visibility for the future.

The story did not end there. At the end of 2018 Zomato returned. The new country manager, Cankut Aydın, said traffic had stayed high despite 1.5 years without a local operation. This time the company planned to earn revenue from online food ordering as well as advertising and reservations; it launched that service in Turkey in September 2020.

In January 2021 egirişim reported that Zomato was pulling out of Turkey for the second time; it had failed to achieve the results it wanted over more than a year, and the decision affected a team of around 110 people. According to Cumhuriyet, the online ordering service had already been halted and the company could not cope with mounting losses. The Turkey office closed permanently on 26 February 2021; at its peak the platform had reached 4.5 million visitors a month. The journey that began with Mekanist ended after two entries and two exits.

Lessons for founders

• High traffic alone is not a revenue model; you need a product that turns visitors into money.
• When entering a market with strong local rivals for the second time, you must have solved the reasons for your first exit.
• Buying a local start-up gets you into a market fast, but that advantage melts away if you do not keep the local team.

Sources

1. Zomato pulls out of Turkey for the second time (egirişim, 2021-01-25)
2. Zomato has closed its Turkey office (Cumhuriyet, 2021-02-27)
3. Zomato is closing its Turkey office [Rumour] (Webrazzi, 2017-05-22)
4. Zomato has acquired Mekanist.net (Webrazzi, 2015-01-29)
5. Zomato is back in Turkey (Gurme Ajanda, 2019-01)
6. Two standout new features from Zomato, which has launched online food ordering in Turkey (Webrazzi, 2020-09-29)

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