Zomato-PayTM Deal: Will Paytm’s Ticketing Business Takeover Really Help Zomato Against Book My Show?

Описание: Food delivery aggregator Zomato is reportedly in talks with

Paytm to take over the beleaguered fintech’s movie ticketing and events businesses - Paytm Movies and Paytm Insider. The acquisition could fetch around 1500 crore rupees.

While for Paytm this could well be a revival strategy after the company decided to cut costs in non-profit-making units, but for Zomato – is the opportunity worth spending money on?

Little known fact: Zomato is already in the ticketing, events, and food festivals business. It is called Zomaland. But there could be more…

Zomato may be looking at diversifying its portfolio of the “going out” or Zomato Dining business... The Paytm deal could further strengthen that vertical which grew 51% in FY24.

So is the deal likely to be the beginning of the hattrick for Zomato after its success in Food Delivery and Quick Commerce?

Well, hold on to that thought. We will come back to it.

Let’s shift focus to Paytm first.

Paytm’s parent One97 Communication is focusing on its core business of digital payments and UPI for now after the RBI all but ripped the fintech off its payments bank licence.

In the quarter gone by, PAYTM’s Financial Services posted a fall in revenues of 36 percent, while its payment services arm grew 7 percent year on year. Its marketing services business, which includes movie and events as well as credit card marketing and gift vouchers recorded a mere 1% growth during the same period.

Marketing services accounted for 18% of One 97 Communications’ total revenue in the quarter gone by.

Zomato’s bid to acquire Paytm’s events division comes close on the heels of reports that competitor BookMyShow – which is 37% owned by Reliance Industries – is set to close a funding round at a valuation of 7,500 Crore rupees, which will see private equity firm KKR buyout existing shareholders.

Zomato is up against a ticketing behemoth!

Its early mover advantage in food delivery aggregation helped it build the market.

Then, the early acquisition of Grofers, now called Blinkit, gave it a head start in the rapidly expanding quick commerce segment at a time when analysts were betting against 10-minute deliveries.

But movie ticketing seems like a saturated market. Book My Show is a near monopoly. Even Paytm’s ticketing business is handled at the backend by Book My Show. So is PVR’s.

For Zomato to build the tech for this new vertical will be expensive, and perhaps foolhardy. Then the OTT disruption to cinema halls is hurting the film exhibition business, especially in an age of fewer blockbuster releases. And getting exclusive ticketing rights from theatres in a market where Book My Show is deeply embedded will need millions of dollars of marketing burn. Why will Deepinder Goyal do that?

One case could be to use Zomato Dining at theatres, no matter whether you book your tickets on Zomato or Book my Show, or even offline at the box office.

This category could be the next revenue driver for Zomato as it taps into the ‘going out’ community of users: the younger cohort who could use Zomato discounts on pop corn and cola, slowly becoming the next generation of Zomato’s full-service users.

Will Zomato hit Gold this time again? Well, we will have to wait to find out.

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