Zomato is an Indian website which provides information related to food, restaurants,

pubs/bars etc. in countries like India, the Philippines, South Africa, Sri Lanka, Qatar,
the United Arab Emirates and the United Kingdom. Companies are drawn towards
international expansion because of lower costs, new opportunities, access to
resources, better visibility etc. But along with all these rewards comes a large pool of
challenges and heaps of risk. Some of the challenges Zomato has been facing in its
global expansion process have been listed below:

1. An international market demands a world class product, and a product
developed solely for Indian market might not be able to cater to the global
demands. Internationally, people are more reactive to design flaws that in
India. So, Zomato has to modify and customize its product to suit the local
markets.
2. Socio-economic factors like cost of labour can make a business unsustainable.
Zomato took all precautions to be able to combat this.
3. It was difficult to operate in a new language while also trying to reinvent their
operations.
4. It was difficult to understand the business-to-business environment in the
foreign market.
5. It is difficult for a startup to afford a Market Research firm like Bain and
Company to the job for them. Zomato had to do a very detailed on-the-
ground study to evaluate a market. This means picking a list of cities that
they think are feasible on a macro level (demographics, regulatory, etc.) and
then sending people to go through their entire operations process from
collecting information to talking about possible partnerships with local
merchants to engaging with users by showing them the product. This is the
best way to figure out the customizations a local market will nee
6. Abroad, understand the incorporation paperwork, labor laws and the limit of
access to business is very difficult. There is a lack of clarity around
regulations. For example, to set up shop in Dubai, you need to have a local
partner. He could be a silent partner but hes still necessary.
7. Technological advancement was required and this constituted the major
portion of their cost.
8. Hiring people and matching their pay scales is also a arduous task.
9. Also, they needed people with a reasonable amount of international
exposure to be able to go and get things done overseas..
10. The banking system is different, so setting up bank accounts and carrying out
transactions also takes time to settle.
11. Existing competition in foreign markets. For eg. Zagat and Just-Eat in London.
12. User behavior is different. The technology user behavior is more mature.
13. Global expansion also requires the firm to raise more funds.
14. A company entering a global market is always prone to political risk.

Zomato has been able to overcome all these challenges with its strategic planning
and determination and has made rapid strides within a short span of time. It has
already broken even or is on the verge of breaking even in most of the countries it
has started its operations.