Massages have long held the benefits of improved blood circulation, reduced stress, and heightened mental alertness. Now you can enjoy these benefits at the comfort of your own home.
Zeel, launched in 2012, is the first company to offer same-day, in-home massage. Recently surpassing more than 1.5M appointments, Zeel has been named one of the “Best Entrepreneurial Companies in America” by Entrepreneur and is now recognized as “One of the fastest-growing companies in the United State” by Inc. Magazine. Here is how the company is disrupting the $15B US and $80B global massage market.
Convenience: With Zeel, clients can get their massages anywhere, anytime. Massages can be delivered to homes, hotels, workplaces, and events across the United States in more than 100 cities. Via Zeel’s easy-to-use mobile app and online website, clients can book massages 7 days a week, 365 days a year, with start times as early as 8 am and as late as 10:30 pm. Clients can also book their sessions in as little as an hour or up to a month in advance.
Quality: Zeel vetted only top licensed massage therapists across the country. To date, the platform has over 11,000 licensed massage therapists listed on its platform. These therapists are also trained by the Zeel team to offer the highest levels of customer service and experience.
Variety: Zeel allows clients to book various types of massages including Deep Tissue, Swedish, Prenatal, Sports, and Sleep.
Trust and safety: The Zeel team conducted background checks and in-person interviews of all massage therapists before they are listed on the platform. In addition, these massage therapists are also required to have a license in their state of practice and are insured a minimum of $1M. As a result of this protocol, Zeel accepts less than 50% of therapist applicants. During the COVID pandemic, Zeel also launched Zeel Shield, a comprehensive program of health, safety, and hygiene guidelines. As part of this program, all therapists are required to complete a daily wellness check before they can use the platform.
Clients pay Zeel a base rate plus tip. Zeel then keeps 32% and subsequently, therapists keep 68%. The base rate varies by location (e.g. 60-minute massage might cost $166 in Denver but $182 in New York). Zeel also automatically places an 18% tip on all bookings.
Scalability & Sustainability
It is clear that Zeel has enjoyed tremendous growth since its inception (available in 100 US cities, covering 70% of the US population) but can it sustain this scale? To answer this question, we further explore the 4 unique characteristics of Zeel and the massage market.
Network effects: Zeel enjoys both same-side and cross-side network effects. First, the number of reviews and ratings of Zeel’s platform allows it to generate significant same-side network effects. As the number of reviews and ratings increased, users also became more likely to use the platform. Second, Zeel is also able to leverage cross-side network effects where users and therapists attract each other where more users attract more therapists, and vice versa.
Network clustering: When looking at the structure of Zeel’s network, we see that the network is fragmented into local clusters. That is, therapists in a particular city only care about the number of clients in that city. This makes Zeel more vulnerable to local competitors across the different cities they operate in. In fact, Zeel has been facing intense competition from challengers such as Soothe and Unwind.me. These challengers can easily break into Zeel’s fragmented market precisely because they do not have to take on Zeel’s countrywide network.
Risks of disintermediation: Zeel’s business model opens up itself to the risk of disintermediation. On one hand, clients can easily bypass Zeel and connect directly with the therapist for their future bookings. On the other hand, the therapist, after obtaining sufficient clients from the platform, also has very little incentive to continue using Zeel’s platform. To minimize the risk of disintermediation, Zeel does not give out the therapist’s contact information until the booking has been made. However, even with this mechanism in place, Zeel is still prone to disintermediation once trust has been established between clients and therapists after the first initial sessions.
Vulnerability of multi-homing: Zeel is vulnerable to multi-homing. Therapists do not have to work exclusively on Zeel and they have no incentive to do so. Zeel provides no additional bonuses for therapists to be listed exclusively on the platform. As such, it is in the favor of the therapists to have a full-time/part-time job at various spas across the country or be listed on other platforms such as Soothe. As for clients, the cost of adopting an additional platform is essentially negligible.
Looking at these 4 characteristics together, I am impressed by how far the company has come, particularly the scale it is able to achieve. I, however, remain doubtful that Zeel can continue to sustain its scale much further. Most notably, Zeel’s network is fragmented into local clusters, the company is exposed to the risks of disintermediation, and it is also vulnerable to multi-homing. To continue to thrive, Zeel must rethink its business model. It should explore new ways to enhance its value, change its value capture strategy, and seek ways to reward the therapists to incentivize them to be exclusive on the platform.
“Zeel Massage Review,” BusinessInsider, August 13, 2019
“Zeel Launches Zeel Shield for Enhanced Health & Safety Standard,” BusinessInsider, May 13, 2020
“Soothe versus Zeel: Which on-demand massage service is the best,” CNET, November 13, 2019
“Zeel Brings On-Demand Massages to Your Home, Office, Hotel, or All Three,” AlleyWatch, September 10, 2019
“Zeel Named To The Inc. 5000 List For The Third Consecutive Year,” BusinessInsider, September 09, 2019