The huge success of the goliath Open Table in restaurant reservations has been matched by the Australian Dimmi. And from reading this article one would see the world domination of Open Table will now have an Aussie challenger. Whoever wins will be a question of who has first mover advantage on developing the market.
From the Wall Street Journal
- June 29, 2012, 8:18 PM EDT
Meet Australia’s Answer to OpenTable
- News Limited
- Dimmi CEO and founder Stevan Premutico
Australia’s answer to Nasdaq-listed online restaurant reservations provider OpenTable, Dimmi, has secured strategic investments from Telstra’s Application and Ventures Group and film distributor-theme park owner Village Roadshow in its fifth capital rising.
Dimmi, which has partnerships with more than 2,500 Australian restaurants, has seated more than 2.5 million diners since its 2009 inception. It trails OpenTable’s 325 million diners since 1998, but it’s a strong start for the high-growth company that currently has 30 employees excluding its heavyweight board of directors.
Dimmi’s chairman is Macquarie Group division director Glen Butler while nonexecutive directors include Google’s Asia Pacific Director of Mobile William Easton, LinkedIn Managing Director of Australia and New Zealand Cliff Rosenberg and Group Managing Director of Telstra Applications and Ventures Deena Shiff, some of whom are individually invested in the online venture.
Dimmi founder Stevan Premutico spoke to Deal Journal Australia about the company’s origin, growth plans and the Australian restaurant industry.
WSJ: How did you come up with the idea for Dimmi?
Mr. Premutico: The seed was planted when I ran marketing for Hilton both in Australia and the United Kingdom which included its hotels, restaurants and bars. I realized how tough it was for restaurants to fill tables and at the same time saw the emergence of third-party distribution channels to help hotels like Wotif.com, Lastminute.com and Expedia which were filling empty inventory. From there I started building the concept of how to help restaurants fill empty tables and help diners to easily search for, discover and book restaurants. We really want to digitize an industry which is years behind others.
WSJ: How did you come up with the name?
Mr. Premutico: I think it was harder than raising capital! It took 18 months, I just couldn’t crack it. One day, I was sitting at a cafe in the Sydney suburb of Leichardt and the waiter said “Dimmi”, which means “tell me” in Italian.
WSJ: Can you talk about Dimmi’s strategic partnerships?
Mr. Premutico: We’re in partnership with brands like the Good Food Guide, American Express, Gourmet Traveler, Urbanspoon and Google which has helped build our network and reach. Our Google partnership which launches next month will be about allowing consumers to search, discover and book in real-time. We’ve already got one in three of Australian restaurants on board and our goal is to increase that to 50% shortly. That includes more than half the restaurants in Australia’s most populous states New South Wales and Victoria.
- Dimmi’s news feed function, which shows friends’ ratings and reviews
WSJ: What trends are you seeing in restaurant reservations?
Mr.Premutico: It hurts me when I see a big black reservation book because I know restaurants are losing thousands of dollars a week. We want to replace those books with a web-based booking system that is cost-effective and allows restaurants to develop databases for customer recognition. Online bookings through Dimmi cost restaurants between A$1 and A$3 a customer or A$6.60 a table. Restaurants are going out of business because they’re not able to effectively fill tables. In San Francisco, 50% of restaurant bookings are made online and in Australia, it’s 2% so there’s so much growth. Australians book flights and hotels online, creating typical capacity of between 80% and 95%. The capacity of restaurants is on average 36% which is crippling them and we’ve even seen a decline in the number of restaurants that previously had a “no bookings” policy.
WSJ: What trends are you seeing in terms of closures and openings?
Mr. Premutico: It’s less about white tablecloths and more about having an enjoyable but affordable meal. The restaurants that are closing down are typically in the mid-to-upper end of the market but new entrants are casual dining groups which have a A$50 threshold.
WSJ: What’s so compelling about Dimmi?
Mr. Premutico: We essentially create a binding commitment between customers and restaurants. No-shows are about 2% across the country, which hurts restaurants and causes them to increase prices which in turn hurts diners. With an airline, you know you’ll forfeit a certain amount if you miss a flight and we’re looking to introduce that for some restaurants in peak time slots to eliminate no-shows. Also, restaurants and their owners can get genuine customer feedback about how to improve. Diners want to provide reviews because they get additional reward points towards free meals but also, reviews are only from users who have booked and dined through Dimmi. That means there’s an integrity to reviews unlike Yelp! where anyone including competitors can just jump on and review a restaurant.
WSJ: How will Telstra and Village Roadshow’s investments boost Dimmi’s growth?
Mr. Premutico: It’s easy for a start-up to chase cash but we were always focused on targeting “smart cash,” meaning investors who come with strategic value and additional distribution reach. Through Telstra, we’ve launched a BigPond dining partnership and we’re doing exciting things around phone devices like their T-Hub while with Village Roadshow we’ll work with on adding our services to their cinema and theme-park ticketing.
WSJ: Can you talk about the integration of social media?
- Dimmi’s iView function
Mr. Premutico: Everyone knows food is a social experience and nothing is more valuable to me than my friends’ opinions, which is why we introduced a news feed function to our mobile app which is solely available on Apple iPhones. If you login with Facebook, the news feed shows where your friends dined and reviews and ratings of the restaurant which adds actual value to future decisions. Separately, we want to help spontaneous diners on-the-go who want recommendations, which explains the iView function on our app which shows nearby restaurants. Since the app launched on June 1, 25% of our bookings are now generated through mobile.
WSJ: What are Dimmi’s growth ambitions?
Mr. Premutico: We currently have 350,000 people in our database who we want to inspire to eat out more often, a number which we’ll hope to grow through partnerships like Telstra, given they’re Australia’s largest provider of mobile devices. It doesn’t make sense restaurants don’t have preferred rates for key corporates so we have plans to enable that. There’s a number of global markets that are relatively untapped so our long-term target is international growth and expansion, and the first stop will be Asia.