WEDDING – RTN asia

Matrimony.com, one of the largest matchmaking companies in the world, said it continue to offer discounts and special pricing to attract new internet users who are coming online via the 4G wireless data revolution. The company, which operates the Bharat Matrimony website and others, has typically charged several thousand rupees for its paid membership. Only paid members can initiate contact with others, with free members restricted to responding to messages by paid members. 4G REVOLUTION The number of people using the internet regularly in India has zoomed from around 150 million four years ago to about 500 million at present, thanks to the 4G revolution that crashed high-speed data prices by about 90%. However, at the same time, the number of paid subscriptions sold by Matrimony.com during this period has remained stagnant. It sold 7.4 lakh paid memberships in the year ended March 2018, which came down to 7.3 lakh in the next year and to 7 lakh in the year ended March 2020. During the three months from April to June this year, it sold 1.7 lakh paid memberships. In contrast, free platforms — such as Facebook and Youtube — have seen their membership numbers increase in line with the expansion in Internet user-base in India. Much of the reason for the stagnation may have to do with the pricing of the services. The average transaction value — a measure of the average fee paid by a member when upgrading or renewing — has defied gravity for some time. It was at Rs 4,361 in FY18, rising to Rs 4,682 in FY19 and further to Rs 5,061 in FY20. Finally, during the latest period — the three months from April to June -- the average transaction value (ATV) fell to Rs 4,837. “The ATV is not the focus for us,” said Murugavel Janakiraman, who started his entrepreneurial journey with a portal for NRIs when he was working as a programmer in New Jersey in 1997. ‘Bharatmatrimony.com’ was born three years later and received its first round of PE funding only after another six -- unthinkable by today's standards. “Our objective is to increase the number of subscriptions, and the revenue,” he said, pointing out that his company has successfully increased prices in the past without seeing any drop in free-to-paid conversions. “Today," he pointed out, "there are different customer segments, and it’s important that we offer differentiated prices and cover those customers.” “Compared to the earlier users of online matrimony, today online matrimony has been given a wider acceptance," he said while interacting with investors after unveiling his company’s Apr-Jun results. "The pricing strategy that we’d adopted in the past by and large the metros and a certain level of people. Considering that the new sign-ups are happening from across tiers, it’s right to offer differentiated prices,” he pointed out. The reason for the decline in ATV this quarter was related to discount offers given to certain customers and customer segments, and responses by the company to rivals in certain highly competitive markets. This strategy, he said, will continue going forward. “The objective is to increase conversions ,” he pointed out. COVID IMPACT AND OUTLOOK Matrimony.com quarterly performance Murugavel, who serves as the MD and chairman of the company, said the COVID-19 pandemic and the resulting shut-down had material impact on the company’s performance in April and May, particularly on the company’s offline and assisted services categories. The company has, in recent years, diversified into fields such as providing platforms for people to buy all kinds of wedding-related services, such as photography, wedding halls, catering, decorators and so on. While the core matchmaking services held up better during the Apr-Jun period, these ancillary services businesses were hit hard by restrictions imposed by the government on the scale of weddings. For comparison, billings in the core matchmaking department fell to Rs 81.2 crore during the three months from around 90 cr in the preceding quarters and Rs 87.7 cr in the same quarter of the previous year. In contrast, revenue in the ancillary services business fell to just Rs 70 lakhs from Rs 4.4 cr in the same quarter of the previous year. To be fair, the business had been seeing a steady decline in its performance even before the pandemic hit (see last graph above). A larger impact was also noticed within matchmaking services with a strong offline component, such as its walk-in centers and ‘assisted matchmaking’ — a service in which the company delegates a specialist to help the person find his dream partner by scouring through profiles and setting up meetings. MARGINS Murugavel said his company took substantial steps to reduce costs, bringing down losses in the ancillary services business to Rs 3.3 cr for the three-month period from Rs 4.4 cr in the year-ago period. This included renegotiating cost items such as shop-rents for the rest of the year. Because of this, operating profit (EBITDA) actually increased to Rs 16.3 cr in Apr-Jun from Rs 13.7 cr in the preceding three months. However, EBITDA was still not as high as the Rs 16.9 cr reported in the same quarter of 2019. Nevertheless, a lower tax bill helped the company to post a higher net profit of Rs 9.4 cr this time, compared to Rs 6.8 cr in the March quarter and Rs 9.3 cr in the year-ago quarter. Murugavel sounded quite optimistic about the coming quarters and said Matrimony.com will move to double digit growth “moving forward”.

Tag: WEDDING

Bharat Matrimony wants to lure customers from ‘all tiers’