Zomato is set to launch a new app named District for the ‘going-out’ sector
Zomato, in an ambitious move beyond its core food delivery services and hyper commerce, announced the introduction of ‘District,’ a new app on August 1. The app consolidates “going-out” activities, including eating and ticketing (movies and concerts).
Zomato has expanded its range of lifestyle offerings to include dining out, movies, sports ticketing, live performances, shopping, staycations, and more. CEO Deepinder Goyal revealed this move in a letter to shareholders.
“Our two major consumer businesses, Zomato and Blinkit, cater to clients’ demands at home nowadays. Without disclosing the exact release date of the app, Goyal continued, “But we also have one of India’s largest ‘going-out’ businesses, helping our customers discover restaurants for dining out.”
He mentioned that the company is reportedly already profitable and running at a run rate of over $500 million annually in gross order value (GOV).
We see an opportunity to further enhance our going-out services, expanding beyond our dining-out business. Additional use cases for customers in this space include movies, sports ticketing, live performances, shopping, staycations, and more. Some of these have already been launched, while others are currently in development,” Goyal said.
With this move, Zomato will now face competition from applications such as BookMyShow, which presently holds a 60% market share in India’s expanding online cinema ticket booking business, which combines dining, events, and movies.
Goyal underlined the potential significance of District, saying, “We plan to do exactly that with our new District app. Building a one-stop destination app for going out could be a game-changer for each of these use cases.” Going out might become Zomato’s third significant B2C company if we carry this out successfully.”
Going-out business
Zomato’s going-out business integrates our dining-out vertical, which operates in both India and the UAE, with our ticketing vertical, Zomato Live.
The segment’s gross order value increased by 105% to Rs 1,268 crore in the June quarter (Q1 FY25), while adjusted revenue more than quadrupled to Rs 95 crore. For the quarter, adjusted EBITDA (profitability) increased by 233% to Rs 10 crore.
The company’s desire to grow its going-out business was made clear in June when it announced that it was in negotiations to purchase Paytm, a leading fintech company, for around Rs 1,500 crore to Rs 2,000 crore, which would have acquired the company’s cinema ticketing and events division.
If the transaction closes, it might have a big effect on Zomato’s exit strategy and accelerate its growth in general.
A successful transaction will probably strengthen Zomato’s going-out business, which includes Zomato Live, and compete with Paytm’s event ticketing segment, according to market research firm JM Financial. This deal could propel Zomato to the second position in the events and movie ticketing market, trailing only behind Bookmyshow.”
Spruce-up management
Two top executives who had left the company last year, Rahul Ganjoo and Pradyot Ghate, were brought back by Zomato to lead the creation of fresh concepts for its existing business.
Both are exploring innovative concepts in the going-out sector, which are more aligned with dining out, lifestyle, and entertainment than with the core food delivery segment. However, at Zomato, things can evolve rapidly, and there’s no certainty that their current projects will ultimately be launched,” a person closely connected with the company explained.
It’s no secret that food delivery has passed its peak growth. That is one of the main reasons why Zomato and Swiggy are investing hundreds of millions of dollars in the fast-fashion industry. Therefore, taking a risk on the going-out business could eventually help Zomato increase its revenue growth.
