Zomato’s Entertainment Expansion and HUL’s Snack Market Exit

India’s food delivery giant, Zomato, is making a notable move into the entertainment sector, expanding its existing ticketing platform. Meanwhile, consumer goods behemoth Hindustan Unilever (HUL) has long ago abandoned its foray into the biscuit market. These two business moves highlight the distinct paths these companies are forging in the Indian consumer landscape.

Zomato’s Growing Appetite for Entertainment

Zomato, known primarily for its food delivery service, has been steadily expanding its reach into the broader entertainment domain. The company has invested heavily in its ticketing platform, offering users the ability to book tickets for movies, live events, and concerts. This move aims to leverage Zomato’s extensive user base and create a one-stop shop for dining and entertainment.

Zomato’s foray into entertainment is part of a larger trend among tech companies seeking to diversify their revenue streams. By offering a wider range of services, Zomato hopes to attract a broader audience and reduce its reliance on food delivery alone.

HUL’s Biscuits: A Recipe for Failure

In contrast, HUL’s venture into the biscuit market was a notable misstep. The company’s attempt to enter the snack market in the early 2000s, under its Modern Foods and Kissan brands, ultimately failed to gain traction.

Several factors contributed to this failure, including:

• Taste Preferences: HUL’s use of soy in its biscuits, while healthier, did not resonate with Indian consumers’ taste preferences at the time.
• Fierce Competition: The biscuit market was already dominated by established players like Britannia and Parle, making it difficult for HUL to carve out a niche.
• Thin Margins: The price-sensitive nature of the biscuit market, particularly among value-conscious consumers, further squeezed HUL’s potential profits.

HUL ultimately decided to exit the snacks business in 2015, selling its bread and bakery business to Nimman Foods. This move allowed the company to focus on its core strengths in personal care, home care, and food products.

Key Takeaways: Lessons for Businesses

The contrasting experiences of Zomato and HUL offer valuable insights for businesses:

1. Diversification: Zomato’s move into entertainment shows the potential benefits of diversifying revenue streams in a rapidly evolving market.
2. Understanding the Consumer: HUL’s failure underscores the importance of thoroughly understanding consumer preferences and tailoring products accordingly.
3. Competitive Landscape: Entering a saturated market dominated by established players requires a unique value proposition and a strong understanding of the competitive landscape.
4. Strategic Focus: Recognizing when a venture is not working and focusing resources on core strengths is essential for long-term success.

Zomato’s entertainment expansion is poised to reshape the way consumers access and experience entertainment in India. It remains to be seen whether this move will be as successful as its food delivery business. For HUL, the focus remains on its core product categories, where it continues to be a dominant player in the Indian market.