With projected revenue of $7 million this year and 100,000 monthly active users, EZTABLE is one of the top successes to have emerged from Taiwan’s young startup industry. Founded in 2008, the restaurant reservation platform is poised to launch in Southeast Asia and expand its presence in China.
EZTABLE, which is already established in Shanghai, plans to roll out in other major Chinese cities, including Beijing, and Bangkok by the end of this year, before moving onward to Jakarta and other Southeast Asian cities in 2014. The company, which is backed by investors Rose Park Advisors, appWorks Ventures and NineYi Capital, is currently raising its Series B funding.
CEO and founder Alex Chen says EZTABLE was inspired by his frequent use of OpenTable to make restaurant reservations while working as an investment banker at Deutsche Bank in Los Angeles.
In order to adapt to the Taiwanese market, however, EZTABLE had to make some significant changes.
“After two months of operating, I realized we needed an entire overhaul because managers in Asia want to see results before they pay. OpenTable’s business model is that you have to buy the hardware and software and pay an installation fee before you start using it, but restaurants here didn’t even know what online reservations are,” says Chen. “They said, people just make phone reservations, why should we bother providing online reservations?”
EZTABLE switched to a freemium-like model, charging a low subscription fee and doing away with transaction fees altogether. To make money, EZTABLE developed an e-commerce model, selling restaurant vouchers with exclusive deals. Seventy percent of the company’s revenue currently comes from voucher sales, while 15 percent comes from subscription fees and the remaining 15 percent from advertisements.
“We get two kinds of users, ones who have not yet decided when they want to go to the restaurant, so they buy a voucher first for the deal and then use EZTABLE later to make reservations. After people make a reservation, we also display the vouchers for purchase,” says Chen. About 25 percent of EZTABLE users who make a reservation also purchase a voucher, spending an average of $25 per diner in each transaction.
In addition to up-selling customers, another benefit of vouchers for restaurants is a reduction in the rate of no-shows, a perennial problem with reservations. Chen says that in Taiwan the average no-show rate for mid- to high-end restaurants is about 10 percent, but for EZTABLE’s clients that rate is reduced to just 1.5 percent.
Chen says EZTABLE will continue to use its current business model as it expands. The company decided to target Bangkok as its first city in Southeast Asia because it has a high concentration of five-star hotel restaurants catering to tourists, as well as a rapidly growing e-commerce market.
After China and Southeast Asia, Chen hopes that EZTABLE’s next stop will be Japan, which the company would tackle with a local partner because of the different localization strategies required there.