Zomato to launch District for its going out biz, focuses on Hyperpure growth
Zomato clocked its maiden profit in the June 2023 quarter, and is diversifying its quick commerce and stepping out business as growth in food delivery stabilizes.
Foodtech giant is set to revamp its stepping out vertical with District, which would offer customer booking options for movies, sports ticketing, live performances, shopping, and 'staycations' in the going-out space, it said in its quarterly shareholder letter.
“We're planning to launch this (District) as a separate app and brand, so that we take advantage of the traffic that we have on the Zomato app. It's going to be pretty much like how we built Blinkit, which is a separate brand, separate app, but still making sure that we keep our cost of customer acquisition lower using the traffic that we have on the Zomato app,” Zomato executives said in the post-earnings call.
According to reports, the foodtech giant had earlier rehired its two senior executives Rahul Ganjoo and Pradyot Ghate to revamp the segment. The company had earlier acknowledged that it was in talks with Paytm for the latter’s events and ticketing platform, however, no binding agreement was signed.
The company reported a multifold growth in its quarterly profit to Rs 253 crore, with an operating revenue of Rs 4,206 crore earned in the April-June 2024 quarter as consumers continued to stay bullish on quick commerce.
The gross order value for its quick commerce business more than doubled on a year-on-year basis to Rs 4,923 crore. It is currently banking on improved gross margins, delivery fee and advertising income to boost its take rates, which refers to how much money the company stands to make on every transaction.
Growth over profitability for Hyperpure
The company outlined its focus on growth rather than profitability for its B2B arm, Hyperpure, which nearly doubled its revenue to Rs 1,212 crore in the three months ended June 30, 2024. It is focusing on mid-level restaurants rather than large QSR chains and commissaries to drive the business by offering higher quality supply, comparative pricing and on-demand delivery.
“We want to run this business close to breakeven and see if there are newer markets or newer customer segments within the restaurant industry that we can unlock,” said Founder and CEO Deepinder Goyal.
The company in a separate filing also announced Board approval for the allotment of 35 lakh equity shares. Less than a month ago, the company approved ESOP grants of 40 million stocks under its 2014 and 2021 plans. These developments come after the company managed to scrape by majority approval for its ESOP expansion plan after nearly a fourth of investors voted against the motion.
Edited by Jyoti Narayan