Zomato, a leading food delivery and quick commerce platform in India, has launched its latest venture—the ‘District’ app—for iOS and Android users. This new app is designed to cater to customers’ entertainment and lifestyle needs, offering dining services, ticket bookings for movies, sports events, live performances, and more. With this launch, Zomato has officially stepped into its third major business vertical, diversifying its offerings beyond its core food delivery services and quick-commerce arm, Blinkit.
A Strategic Move to Capture the “Going-Out” Market
The introduction of the District app is a natural extension of Zomato’s existing business. In August 2024, the company made headlines when it acquired the entertainment and ticketing business of Paytm for ₹2,048.4 crore ($244 million). This acquisition was a crucial step toward strengthening its “going-out” vertical.
Zomato CEO Deepinder Goyal shared his vision for the new vertical in the Q1FY25 shareholders’ letter. “Today, Zomato and Blinkit are our two large consumer businesses, and both serve customers’ needs at home. However, we also have one of India’s largest ‘going-out’ businesses. Our dining-out business, which helps our customers discover restaurants, is now operating at a run-rate of $500 million+ in annualized Gross Order Value (GOV) and is already profitable,” Goyal noted.
This dining-out business, which connects users with restaurants for dine-in experiences, forms the foundation of Zomato’s expanding focus on the “going-out” category. The new District app builds on this, incorporating additional use cases like movie and sports ticketing, live performances, shopping, and even staycations.
Creating a One-Stop Destination for Entertainment
Deepinder Goyal emphasized the company’s intention to create a comprehensive platform for all out-of-home activities. “We believe there is an opportunity to further expand our going-out offering. 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.
With the District app, Zomato aims to cater to a growing market of urban users looking for convenient ways to plan their entertainment and leisure activities. The app leverages the company’s existing expertise in customer engagement and user-friendly design, while also competing directly with well-established platforms like BookMyShow, backed by Reliance, which dominates the ticketing space in India.
Strategic Financial Strengthening
The launch of the District app comes at a time when Zomato is working to solidify its financial position in a competitive market. Recently, the company’s board approved raising ₹8,500 crore through a qualified institutional placement (QIP). This move is intended to act as a financial buffer as Zomato continues to expand into new verticals and strengthen its operations.
This fundraising effort is part of a broader strategy to ensure Zomato remains competitive across its three major verticals—food delivery, quick commerce, and the emerging “going-out” segment. By diversifying its offerings and maintaining a strong financial foundation, Zomato is positioning itself to become a dominant player in multiple consumer-facing industries.
Innovative Features to Reduce Food Wastage
Alongside its expansion into entertainment and lifestyle, Zomato is addressing a critical issue within its core food delivery business: food wastage. The company recently introduced a new feature offering canceled food orders to customers at significantly discounted prices. According to Goyal, Zomato experiences approximately 4 lakh order cancellations every month, creating an opportunity to reduce waste and offer value to customers.
This feature not only tackles an environmental and logistical challenge but also enhances Zomato’s appeal to cost-conscious consumers. It underscores the company’s commitment to sustainability while leveraging its massive user base to drive engagement and retention.
Challenges Ahead
While the District app presents significant growth opportunities, it also comes with challenges. Competing against entrenched players like BookMyShow in the ticketing domain will require Zomato to innovate and offer differentiated services. Additionally, the app’s success will depend on its ability to integrate multiple use cases seamlessly, ensuring a smooth and engaging user experience.
Zomato’s ambitious plans also place pressure on execution. Building a platform that caters to diverse entertainment needs—ranging from dining to live events—requires extensive partnerships, operational efficiency, and technological robustness.
Moreover, the broader macroeconomic environment and shifting consumer behaviors could influence the adoption of such services. With inflationary pressures and changing discretionary spending patterns, Zomato must strike the right balance between affordability and premium offerings to capture market share.
The Road Ahead
The District app represents Zomato’s evolution from a food delivery company to a holistic lifestyle platform. By combining its established strengths in customer engagement with its ambitions in entertainment and leisure, the company is poised to redefine how Indian consumers plan their out-of-home experiences.
If successful, the District app could not only unlock significant revenue potential but also position Zomato as a leader in the broader lifestyle services category. As Goyal aptly noted, this venture has the potential to become the company’s third major B2C business, complementing its food delivery and quick commerce operations.
With strategic investments, innovative features, and a clear vision, Zomato is setting the stage to become a one-stop solution for all home and out-of-home needs, enhancing its relevance in the lives of millions of customers across India. However, the true measure of success will lie in execution, user adoption, and the company’s ability to stay ahead of the competition in this dynamic and rapidly evolving market.
In the coming months, all eyes will be on Zomato as it rolls out the District app and further solidifies its presence in the entertainment and lifestyle space. If it can deliver on its promises, Zomato is well on its way to reshaping India’s “going-out” landscape.