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Matrimony to increase its ad budget for North India; other notes from earnings call

Matrimony Limited, which runs BharatMatrimony, reported a consolidated net profit of Rs 19.16 crore, up 64%, as compared to Rs 11.69 crore in Q2FY17. The company also reported a revenue of Rs 83.7 crore for the quarter, representing a growth of 13.7 % compared to Rs 73.6 crore the same quarter previous year.

During the earnings call, chairman Murugavel Janakiraman spoke about the company’s ambitions to expand to North India and gave details about their newly started marriage services business. Highlights from the call:

Advertising spends for the North India

Janakiraman said that the company will be stepping up its marketing efforts in North India in the coming quarter. He mentioned that Matrimony has as an annual budget of Rs 50-52 crore for advertising and marketing but the company will be maintaining the same advertising spends and will instead divert some of the resources from south India.

Janakiraman said that Matrimony has around 60% of the market share in the matrimonial websites. “We are already a market leader and we are able to kind of manage the marketing budget in such a way that we are able to allocate more marketing budget for the northern market and so that is how we are looking at it,” he explained. “Some budget may come from the south,” he added.

He also elaborated on how they would be deploying advertisements in North India. “So we are looking at couple of advertisements burst in the quarter. So far we have been doing sort of one advertising burst a quarter so now starting this quarter we are looking at two advertisement bursts a quarter so that, that will increase our visibility in the northern market,” he added.

Matrimony’s main rival is Info Edge’s Jeevansathi. Info Edge’s managing director Hitesh Oberoi had earlier stated that they want to maintain their dominance in the northern market. “So Jeevansathi has always been a strong player in the north. We would actually do almost 0% in the south. So most of our revenue comes from north and west. While we are #3 player nationally, we believe that we may be actually #2 player in the north and west and definitely in the north,” he said in an earlier analyst call.

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Marriage services

Janakiraman also talked about how the marriage services business is structured at the moment. Right now three businesses comprise the marriage services.

  • Matrimony Photography where they provide end-to-end photography, videography services.
  • Matrimony Bazaar is an assisted commerce business. The service allows people getting married to choose catering services, choose apparel and jewelry, decoration services. “For every service, they want to avail through us we charge a service fee and we appoint a relationship manager. We have 4000 plus vendors we have signed up in Tamil Nadu across the categories,” Janakiraman said. Matrimony also makes a commission from the vendors in addition to the fees paid.
  • Matrimony Mandap is a venue booking platform. The company over 2000 mandaps across south India listed and earns a commission from the venue owners.

Note that rival Info Edge has been increasing its stake in Canvera, an online photography services start-up, and BigStylist, a marketplace for beauty professionals. Both the businesses are significant for weddings in general but it is unclear if Info Edge is looking to directly compete with Matrimony’s services as well. Canvera offers products like photo books, photo albums, posters, photo prints and calendars among others. Besides this, it provides various solutions to professional photographers to showcase their photo portfolio.

Matrimony in numbers

  • Overall profiles added for the quarter were 8.7 lakhs
  • Of the 8.7 lakh profiles, 61% were added by the prospects, 17% of profiles were added by parents and 22% of the profiles were added by siblings.
  • Approximately 52,000 weddings were because of Matrimony’s matches.
  • Paid subscription for the Q2 was around 1,77,000 paid subscriptions compared to 1,70,000 in the same quarter last year.
  • In terms of ARPU, average transaction value was Rs 4339.
  • Active profiles on the website are 3.19 million. In Q2, last year it was 2.75 million.
  • 80% of registration is happening through the mobile app. This quarter more than a million downloads have happened.

Marriage services profitability

During the quarter, the marriage services segment posted revenues of Rs 4.6 crore as against Rs 3 crore in same quarter last year, representing growth of 52.6%. However, it posted a loss of Rs 3 crore in the quarter and Janakiraman said that it would expect the losses to continue for a while as it builds the business.

This quarter, Matrimony Photography did around 1100 weddings in the four markets it is present in. “So for all the southern states to become profitable we have to do close to 3000 events per quarter. So if that happens entire southern states become profitable on the photography venture,” Janakiraman added. He also said that a majority of the marriage services revenue is coming from photography.

“Look at photography. You are talking about 10 to 12 million weddings taking place and if we do 100,000 weddings per month that itself can be a Rs 500 crore opportunity for us. Even with 100,000 weddings per month, we have just covered the 1% number of weddings that take place in India. So the opportunity is big and the photography currently is operating only in southern states. You need to expand it to across India, same is the case for other ventures like Matrimony Bazaar or Matrimony Mandap,” he added.

GST impact

With the introduction of GST, Matrimony had to increase the price of its basic package by Rs 300 in October. Matrimony has paid packages typically for three months, six months and a year. Earlier the basic package costed Rs 4200 and now it stands Rs 4500. Janakiraman stressed that the price increase was done after many years during the call.

“We will be doing the price increase for other packages as well. So that will take care of GST increase. But having said that the price increase benefit would happen over a period of a couple of quarters because as you may know our paid transaction value includes our first-time transaction as well as renewal transaction,” he added.

Download: Transcript 

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