Seamless Sees Opportunity as LivingSocial Shrinks and Consolidates

12/4/12Follow @jpruth

Competition may be a form of flattery but in the end, someone limps away bruised. New York’s Seamless, which developed a Web and mobile platform for ordering meals for delivery and pickup from restaurants, is sounding rather confident of its place in the market. In late November, would-be rival LivingSocial, a daily deals company in Washington, D.C., revealed it would lay off some 400 employees. LivingSocial’s changes include scaling back some of its food takeout and delivery ordering services, which launched in March.

Seamless CEO Jonathan Zabusky says he was originally taken aback by the emergence of this potential challenger, an outsider to the food ordering market. “When LivingSocial came into our space several months ago trying to extend off their daily deals platform, we were quite surprised,” he says.

However, Zabusky asserts that there is room for multiple players in the business of delivery and takeout food. “You have a sector that is only 10 percent penetrated in terms of online spending,” he says.

The platform and relationships Seamless has established with customers, Zabusky says, are not easily replicable, making it difficult for new competitors to gain ground. The swift appearance—and retreat—of rivals have had little effect, he says, but attempts to break in by high-profile companies such as LivingSocial put the sector more in the spotlight. “In certain ways it made clear the connection between our business and helping restaurants drive profitability,” he says.

Zabusky believes the immediacy of ordering food, especially through mobile devices, separates his business from other types of e-commerce such as daily deals. He says consumers typically expect to eat their meals within one hour of placing their orders. “I imagine those who come into this space underestimate the complexity of that,” he says.

Seamless has evolved from business-to-business roots serving law firms, equity firms, and other companies that pay for employee meals and catered lunches. Zabusky says his company plans to leverage data it has collected over the years to help consumers discover restaurants nearby.

That could put Seamless in rivalry with other recommendation apps and mobile services such as UrbanSpoon. “We know an awful lot about people’s preferences and behaviors,” he says. “We want them to come to Seamless when they want to decide where to eat and what to eat.”

João-Pierre S. Ruth is the editor of Xconomy New York. He can be reached at jpruth@xconomy.com and followed on Twitter @jpruth. Follow @jpruth

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