Zomato to launch new app ‘District’ to target ‘exit’ market

Zomato to launch District app ‘going out’ (Photo: X/@deepigoyal)

3 minutes of reading Last updated: August 01, 2024 | 18:12 IST

Food aggregator Zomato is launching a new app, District, to expand its services beyond its core food delivery and quick commerce businesses. The new platform aims to consolidate various “output” services like restaurants, movies, sports tickets, live shows, shopping and staycations into a one-stop destination for customers.

In a note to shareholders after Zomato’s first-quarter results, CEO Deepinder Goyal outlined the potential for significant growth through this new venture. He highlighted that Zomato and Blinkit are currently catering to the needs of customers at home, but there is a big opportunity to expand into the out-of-home market. Goyal highlighted the profitability of Zomato’s foodservice business, which is running at an annualised rate of over $500 million in gross order value (GOV).

How will the District app work?

Goyal believes that creating a comprehensive app for outing services could be a game-changer. The District app will build on the existing food and beverage business and include additional use cases like movies, sports tickets, live shows, shopping and staycations.

The move aims to make the “going out” the third largest B2C business to emerge from Zomato.

“Creating a one-stop app for outbound destinations can be a game-changer for each of these use cases and that’s exactly what we intend to do with our new District (by Zomato) app. If we get it right, we’ll see outbound becoming the third major B2C business to emerge from Zomato,” Goyal said.

Strategic move by Zomato app

The launch of District positions Zomato as a competitor to platforms like BookMyShow. In June, Zomato confirmed to exchanges that it was in talks with Paytm to acquire its film and ticketing businesses, further solidifying its entry into the outbound segment.

Unlike its rivals Swiggy and BigBasket, Zomato hasn’t built a super app. Instead, it is focusing on combining its Dining-out and Zomato Live businesses under a new District app. This strategic move aims to provide a seamless and comprehensive experience to customers looking for a variety of outings.

Zomato Q1 FY25 Results

Zomato reported a net profit of Rs 253 crore for Q1FY25, a significant increase over the net profit of Rs 2 crore posted in the same quarter last year. Zomato’s revenue grew by almost 74 per cent year-on-year to Rs 4,206 crore as compared to Rs 1,416 crore last year.

However, Zomato-owned fast food and services company Blinkit reported adjusted earnings before interest, tax, depreciation and amortisation (EBITDA) of minus Rs 3 crore despite opening 113 stores, which was above the company’s forecast of 100 stores.

First published: August 01, 2024 | 18:12 IST