FRIDAY, March 29, 2024
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Restaurant review start up to stay focused on local market

Restaurant review start up to stay focused on local market

Wongnai expanding business models, upcountry presence to boost revenue

Many Thai start ups hope to grow by going global, but the goal of Wongnai, a restaurant-review  start up, is still focused on the local market. 
Wongnai this year will invest in new business models and expanding upcountry. It needs to raise US$2 million (Bt70 million) in funding, which it aims to accomplish this year. 
Wongnai is aiming for 2015 revenue to be 2.5 times last year’s, and to post a profit by 2017. 
Wongnai is the leading restaurant-review app in Thailand with 2 million users, 500,000 reviews of 180,000 restaurants, 300,000 session visits per day and 500,000 monthly active users, but it needs to scale up these figures to meet its growth targets. Thus, it needs to move on from restaurant reviews to dominate other segments, including beauty and travel services. 
The new chapter of Wongnai begins next month when it becomes an e-commerce platform or sales channel for its merchants. This is aimed at turning its traffic into transactions, while unlocking the limited current advertising-based business model to revenue sharing from each transaction. 
Even though it has enjoyed strong growth in advertising revenue over the past three years, this business model is deemed insufficient for its growth targets, because it has limitations. Hence, its expansion into the transaction revenue-sharing model.
“Advertising revenue will still exist,” said Wongnai’s co-founder and chief executive officer Yod Chinsupakul. “Transaction revenue sharing is an additional revenue stream that is expected to be the main stream.” 
A total of 180,000 restaurants at Wongnai could offer e-vouchers to draw the app’s users to try their services. Therefore, instead of offering a review or advertorial of the restaurant, Wongnai’s new feature will allow it to sell e-vouchers.
Next month, 50 restaurants will join “Wongnai Restaurant Week”, a marketing campaign to kick off Wongnai’s new marketplace platform. 
The marketplace concept will also be implemented in “Wongnai Beauty”, the company’s application for reviews of beauty services, including salons, spas and clinics. 
Under the business plan, Wongnai Beauty will be merged into Wongnai, with the former’s 6,000 merchants, 100,000 users and 10,000 reviews migrated to the main app. The merger of the two apps is expected to help the company be more focused. 
In October, Wongnai will kick off a marketing campaign for its marketplace platform for the beauty-review category.
“This year our job is to strengthen our two main review categories, restaurants and beauty services, by increasing the numbers of merchants, reviews, users, visiting sessions and, importantly, transactions,” Yod said. 
Another key strategic move is to expand upcountry, with the aim of having a presence in 10 provinces.
“Only two months after we expanded into Chiang Mai and Chon Buri, we saw a return on investment. Having local a presence helps increase our performance both in traffic [to the app and the website] and [review] content. Our next moves this year will be to Phuket and Khon Kaen,” Yod said. 
To scale up its business, including adopting the marketplace platform, going upcountry, and setting up a travel-review category, Wongnai needs the next round of fundraising to bring in $2 million before the end of this year. Yod said the money would be invested in operations, teams, marketing and branding. 
The company wants to get into travel reviews, as this is a segment with high potential. However, Yod said it needed to strengthen its existing restaurant and beauty segments first. It aims to push the beauty category to generate revenue, both from advertising and transactions, from only 5-10 per cent of the company’s total revenue to around 30-35 per cent this year.
Wongnai, established in mid-2010, saw no revenue until 2012. In 2013, it received seed funding and Series A funding from Recruit Strategic Partners, a wholly owned subsidiary of Recruit in Japan. After that, Wongnai began posting at least 100-per-cent annual growth. 
Yod expects revenue to jump again after the next round of fundraising along with the strategic business plans to dominate the three largest review markets, restaurant, beauty services, and travel. Thailand is big enough to accomplish its goals, with its Bt300-billion restaurant market, Bt100-billion beauty-service market and Bt500-billion travel market. 
“The local market is the best destination for a review app like us. We are different from other start ups,” he said.
 
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