In a move that underscores Zomato’s ambitions beyond food delivery, the company has made headlines with its acquisition of Paytm’s movie and events ticketing businesses for a substantial Rs 2,048 crore. This deal, announced on Wednesday, represents a pivotal moment in Zomato's strategic diversification, signaling its intent to become a significant player in the Indian online ticketing landscape.
The market renovation
The Indian online ticketing market has been largely dominated by BookMyShow, backed by the Reliance empire. Paytm, which entered the ticketing business in 2017, quickly became the closest competitor. However, Paytm's recent decision to exit this space, driven by a refocus on its core payments and financial services operations, has opened the door for Zomato to step in. The acquisition of Paytm's 'TicketNew' and 'Insider' platforms gives Zomato a robust foothold in both movie and live event ticketing, positioning the company to challenge BookMyShow’s long-standing dominance.
Growth and Strategic Synergy
Zomato’s entry into the ticketing business just over a year ago signaled its broader ambitions. The acquisition of Paytm's ticketing platforms is not just an expansion of services but a calculated bet on the rapidly rebounding demand for online ticketing in India. While Zomato’s non-core businesses, including ticketing, contributed just 2% of revenue last year, they have been among the fastest-growing segments. The company anticipates that this acquisition could more than triple its revenue from these segments within two years.
Looking ahead, Zomato is projecting that its Gross Order Value could exceed INR 10,000 crore by FY26, fueled by growth not only in ticketing but also in new verticals such as shopping and staycations. The company's strategic execution could yield a 4-5% Adjusted EBITDA margin in the medium to long term, keeping the going-out business near break-even in the short term.
Transitioning to Zomato’s Ecosystem
As part of the transition, Paytm will continue offering ticketing services for the next 12 months before fully handing over operations to Zomato's newly launched 'District' app. This app is poised to become a key player in the going-out segment, further diversifying Zomato’s portfolio. Additionally, the transfer of around 280 employees from Paytm's entertainment ticketing division to Zomato will bring valuable expertise, enhancing Zomato’s capabilities in this new domain.
Financial Flexibility and Future Prospects
Zomato’s acquisition strategy is underpinned by its significant cash reserves, totaling Rs 12,539 crore. This financial flexibility has enabled the company to pursue inorganic growth opportunities, such as its aggressive entry into quick commerce with the Blinkit acquisition in 2022. Now, with the ticketing acquisition, Zomato is poised to solidify its position in the entertainment space, making it the company’s third major consumer-facing vertical alongside food delivery and quick commerce.
A New Chapter for Zomato
This acquisition is more than just a business transaction; it’s a bold step in Zomato’s evolution into a multi-faceted digital platform. The launch of the 'District' app, set to cater to the going-out segment, represents the next pillar of growth for Zomato. With its eyes set on becoming a dominant player in the Indian market, Zomato is strategically positioning itself as a comprehensive service provider, addressing a wide range of consumer needs.
As Zomato continues to innovate and expand its offerings, the company is clearly committed to driving growth through strategic diversification. The acquisition of Paytm’s ticketing businesses is not just an expansion of services but a calculated move to strengthen Zomato’s market presence and unlock new revenue streams in an increasingly competitive digital landscape.
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