Zomato To Launch New App ‘District’ For Going-Out Business

Zomato Shares Rally Over 4% As HSBC Raises Target To INR 330

SUMMARY

The ‘District’ app will allow customers to discover and book restaurants and offer additional use cases such as booking tickets for movies, sports, live performances, among others

CEO Deepinder Goyal said that if Zomato executes District well, going-out can emerge as the third-largest B2C business for the company

Zomato’s dining-out business is currently operating at a run-rate of over $500 Mn annualised GOV (gross order value) and is already profitable, the founder added

Foodtech major Zomato is launching a new app ‘District’ for its ‘going-out’ business. The app will allow customers to discover and book restaurants and book tickets for movies, sports, live performances, among others.

In its shareholder letter, Zomato CEO Deepinder Goyal said that Zomato’s dining-out business is now operating at a run-rate of over $500 Mn annualised GOV (gross order value) and is already profitable.

Besides, he said there is an opportunity to add other services in the ‘going-out’ business. Additional use cases for customers in the going-out space include, movies, sports ticketing, live performances, shopping, staycations among others, Goyal said, adding that the company has already launched some of these and is working on the others.

“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 (by Zomato) app. If we execute this well, we see going-out becoming the third large B2C business emerging out of Zomato,” he said.

It is pertinent to note that Zomato recently held preliminary discussions with Paytm to acquire the fintech major’s movie ticketing and events business.

In a post-earnings call, Zomato chief financial officer Akshant Goyal said that the company would look to get traffic from its food delivery app to the District app.

“We’re planning to launch (District) as a separate app and brand. It’s going to be pretty much like how we built Blinkit, which is a separate band and separate app… but making sure that we keep our cost of customer acquisition lower using the traffic that we have on the Zomato app,” the CFO said.

Zomato’s going-out business currently includes dining-out and Zomato Live verticals. The segment contributed INR 95 Cr to Zomato’s top line in the reported quarter, an increase of 126% from INR 42 Cr in Q1 FY24.

Meanwhile, Zomato reported a consolidated net profit of INR 253 Cr in Q1 FY25 as against INR 2 Cr in the year-ago quarter. Revenue from operations jumped 74% to INR 4,206 Cr in Q1 FY25 from INR 2,416 Cr in the corresponding quarter last year.