Zomato Launches 'District': A Comprehensive App for Dining, Entertainment, and More
Image: Zomato
Image courtesy: Upstox
Zomato, the well-known food delivery platform, is expanding its horizons with the introduction of 'District,' a new app aimed at consolidating various "going-out" activities.
This strategic move marks a significant shift from Zomato's core focus on food delivery and hyper-local commerce, positioning it as a versatile lifestyle service provider.
Let's explore Zomato's ambitious plan, its new offerings, and the potential impact on the market.
Zomato's Ambitious Expansion
On August 1, Zomato announced the launch of its new app, 'District,' which will bring together various services like dining out, movie and sports ticketing, live performances, shopping, and staycations—all under one roof.
The announcement was made by CEO Deepinder Goyal in a letter to shareholders, highlighting Zomato's vision to expand beyond its traditional services.
Image: Deepinder Goyal, CEO of Zomato
Image courtesy: Moneycontrol
Goyal mentioned,
"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."
This statement underscores the company's intent to capitalize on the growing demand for comprehensive lifestyle services.
A Profitable Venture
The 'District' app is already making waves with a run-rate of over $500 million in annualized Gross Order Value (GOV), according to Goyal. He also noted that this business segment is already profitable, indicating a strong potential for growth.
The company aims to build on its existing dining-out services by adding more features like movie ticketing, sports events, live performances, shopping, and staycations.
Image: District by Zomato
Image courtesy: m.economic.com
"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 added.
Competition and Market Impact
Zomato's new venture places it in direct competition with established players like BookMyShow, which currently dominates India's online movie-ticket booking market with a 60 percent share.
The company is also in talks to acquire the movie-ticketing and events arm of fintech giant Paytm, a deal estimated to be worth between Rs 1,500 crore and Rs 2,000 crore. This acquisition could significantly boost Zomato's presence in the entertainment and events sector.
According to market analysis firm JM Financial, "The deal could catapult Zomato to the second position in the events and movie-ticketing space, behind only BookMyShow."
Financial Performance
Zomato's recent financial results showcase a robust performance, with a net profit surge of 126.5 times to Rs 253 crore in the June quarter.
Revenue increased by 74 percent, reaching Rs 4,206 crore, despite challenges like high inflation and muted demand in the broader e-commerce sector.
The company's 'going-out' business, which includes the dining-out vertical in India and the UAE, along with Zomato Live, reported a gross order value of Rs 1,268 crore, a 105 percent increase from the previous year.
Adjusted revenue more than doubled to Rs 95 crore, while profitability (adjusted EBITDA) jumped 233 percent to Rs 10 crore.
Conclusion: Zomato's Expansion
Zomato's launch of the 'District' app represents a significant expansion of its business model, aiming to become a comprehensive platform for various lifestyle services.
By integrating dining, entertainment, and more, Zomato is positioning itself as a key player in the lifestyle and entertainment market.
The potential acquisition of Paytm's movie-ticketing and events business could further solidify its position, making it a formidable competitor to established players like BookMyShow.