Zomato on August 1 announced the launch of 'District,' a new app consolidating "going-out" business, including dining and ticketing (movies and events), an ambitious expansion beyond its core food delivery services and hyper commerce.
This move, unveiled by CEO Deepinder Goyal in a letter to shareholders, marks Zomato's entry into a broader array of lifestyle services, encompassing dining out, movies, sports ticketing, live performances, shopping, staycations, and more — all within a single platform.
“Today, Zomato and Blinkit are our two large consumer businesses, serving customers' needs at home. However, we also have one of India’s largest 'going-out' businesses, helping our customers discover restaurants for dining out,” Goyal said, without sharing the details of when the app would be available to be downloaded.
The business is said to be operating at a run-rate of over $500 million annualized Gross Order Value (GOV) and is already profitable, he noted.
“We believe that there is an opportunity to further expand our going-out offering, building on top of our dining-out business. Additional use cases for customers in the going-out space include movies, sports ticketing, live performances, shopping, staycations, some of which we have already launched, or are building as we speak,” Goyal said.
The move puts Zomato in direct competition with apps like BookMyShow, which dominates the growing online movie-ticket booking market in India with a 60 percent share, combining movies, events and dining.
"Building a one-stop destination app for going-out could be a game-changer for each of these use cases, and we intend to do exactly that with our new District app. If we execute this well, we see going-out becoming the third large B2C business emerging out of Zomato," Goyal said.
The Gurugram-based food and grocery delivery platform’s net profit jumped 126.5 times to Rs 253 crore in the June quarter. Revenue rose 74 percent to Rs 4,206 crore at a time when the broader e-commerce sector is reeling under the pressure of high inflation and muted demand.
Going-out business
Zomato's going-out business is a combination of dining-out vertical, which operates in both India and the UAE and ticketing vertical Zomato Live.
In the June quarter, the segment's gross order value grew 105 percent to Rs 1,268 crore on-year, adjusted revenue more than doubled to Rs 95 crore. The profitability (adjusted EBITDA) for the quarter jumped 233 percent to Rs 10 crore.
The company’s interest in ramping up the going-out business became apparent in June after it confirmed that it was in talks to acquire fintech major Paytm’s movie-ticketing and events arm in a deal that could be worth between Rs 1,500 crore and Rs 2,000 crore.
If it goes through, the deal will have a significant impact on Zomato’s going-out business, boosting its overall growth.
According to market analysis firm JM Financial a successful closure the deal would likely strengthen Zomato’s going-out business, which includes Zomato Live, which competes with Paytm’s events ticketing vertical.
“The deal could catapult Zomato to second position in the events and movie-ticketing space, behind only BookMyShow," it said.
Management push
As reported by Moneycontrol, Zomato brought back two senior executives Rahul Ganjoo and Pradyot Ghate, who left the company last year, and asked them to incubate new ideas for its going-out business.
Both of them are pursuing ideas in the going-out business, “but things change very quickly in Zomato. There’s no guarantee that what they are working on will eventually be launched,” a person closely associated with the company had told Moneycontrol.
It is no secret that the high-growth phase of food delivery has run its course and that is one of the reasons Zomato and rival Swiggy are pumping hundreds of millions of dollars into the quick commerce.
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