Matrimony.Com Ltd

NSE:MATRIMONY

Earnings Call Transcript 2023-Q2

[Operator]

Ladies and gentlemen, good day, and welcome to Matrimony.com Limited Q2 FY '23 Earnings Conference Call hosted by YES Securities. We have with us senior management of Matrimony.com on the call, Mr. Murugavel Janakiraman, Chairman and Managing Director; Mr. Sushanth Pai, Chief Financial Officer. [Operator Instructions] Please note that this conference is being recorded.

I now hand the conference over to Mr. Murugavel Janakiraman, Chairman and Managing Director, Matrimony.com. Thank you, and over to you, sir.

[Murugavel Janakiraman, executive]

Thank you so much. Good evening, everyone. I hope all of you are continuing to be safe and healthy. After many quarters of good growth, we are seeing a subdued quarter due to intense seasonality. However, we're confident of overcoming the challenge and move to better growth with our new launches and with a new focus on the customer side and we're very confident of bouncing back on growth.

Now let me come to the result. In quarter 2, on a consolidated basis, we have achieved INR 109.1 crores in billing, which is a 2.2% year-on-year growth. Revenues were INR 114.9 crores, which is a 4.5% year-on-year growth.

Key insights and highlights for the matchmaking business in Q2 are as follows. Billing at INR 106.6 crores, which is a growth of 0.4% year-on-year. Revenue at INR 102.5 crores, growth of -- INR 112.5 crores, a growth of 3% year-on-year.

We added 2.4 lakhs paid subscription during the quarter, which is a growth of 8.3% year-on-year. [indiscernible] for the matchmaking business declined 3.4% quarter-over-quarter and 7.2% year-on-year. We [indiscernible] customer acquisition strategy.

We continue to track the impact that we [indiscernible] for our customers. We are happy to state that we have created about 20,955 success stories in quarter 2.

Now coming to Marriage Service business, revenue was INR 2.4 crores, a growth of 30.6% quarter-over-quarter and 202.9% year-on-year. Loss in the quarter was INR 3.3 crores compared to INR 3.4 crores in the previous quarter.

I'm happy to state some of the important milestones in the quarter. We launched RainbowLuv, an exclusive matchmaking app for LGBTQIA+ community [indiscernible] find a meaningful relationship. We launched Techie Matrimony, an exclusive matchmaking service for IT and software and technology professionals to find a match from the same profession. Bharat Matrimony [indiscernible] of India, the best of South award 2022. BharatMatrimony, Pehle Padhai Phir Shaadi, won the [indiscernible] awards.

On the billing and revenue outlook for Q3. Matchmaking billing will grow by single digit because of the impact we had in quarter 2. It takes 1 more quarter for us to bounce back. We expect to bounce back to double-digit growth in quarter 4 onwards. On the wedding services, the momentum is expected to continue. We expect to grow at a triple-digit basis, the last of it however will be single [indiscernible] quarter 2.

Let me now pass on to Sushanth to comment on the key [indiscernible]. Sushanth, over to you.

[Sushanth Pai, executive]

Yes. Thanks, Muruga. Our EBITDA margin for the matchmaking business in Q2 is at 23.1% as compared to 23.5% in quarter 1, and 29% a year ago. Marketing expenses are at INR 44.4 crores as compared to INR 43.5 crores in Q1 and INR 39.9 crores a year ago.

Excluding marketing expenses, our margins in matchmaking are stable at 63%. On a consolidated basis, our EBITDA margins in Q2 are at 16.3% as compared to 17.6% in quarter 1 and 24% a year ago.

Tax rate in the quarter is up 14.3% as compared to 21% in quarter 1. The tax rate reduced, which is EPR, reduce to lower tax on realized gains on mutual funds, which were redeemed to fund the buyback amount.

PAT is at INR 11.7 crores, a decline of 2.2% quarter-on-quarter and 29.3% year-on-year. Share of profit from Astro is INR 12.5 lakhs. Net profit margin has been stable at 10% plus level for the last 4 quarters. Return on capital employed annualized for the quarter is at 19.5%.

We completed the buyback of shares extinguishment by 26 August, 2022. The buyback cost, buyback taxes and expenses are accounted as reduction from the equity during the quarter ended September 30, 2022. The buyback program was successful with [ 759% ] subscription and all the shareholders who tendered their shares were accepted for the buyback depending upon the proportion of shareholding. Since the promoter group did not participate, it added further to their entitlement.

On the outlook for Q3 margins, we expect Q3 EBITDA and PAT to be slightly lesser than the levels of Q2 due to the revenue impact of lower billings of Q2.

I would like to end with the customary safe harbor statement. Certain statements during this call could be forward-looking statements on the business. These involve a number of risks and uncertainties that could cause the actual results to differ materially from such forward-looking statements. We do not undertake to update any such forward-looking statements that may be made from time to time by or on behalf of the company unless as required by law.

Over to you. We can open for the Q&A now.

[Operator]

[Operator Instructions] We'll take the first question from the line of Vivekanand Subbaraman, AMBIT Capital.

[Vivekanand Subbaraman, analyst]

I have 2 questions. So one is on the billing trends. It's well below the guidance that -- or rather the aspiration that you have of double-digit growth. Muruga, you said that seasonality was particularly bad. I'm just trying to understand this better because my sense was this segment, the online matchmaking segment was a fairly small part of the overall matchmaking activity that Indians do. So in that context, why did seasonality hurt us so much? So that is question one.

Secondly, as far as your strategy is concerned, a couple of years ago, you had chosen to follow a path where you would segment your pricing based on the educational qualifications and also the place that the people are subscribing from. And that was one of the factors that had led to transactions increasing to over INR 2 lakhs per quarter. But now it's stuck at that, right, compared to last quarter levels. This is a small improvement year-on-year, but still you would argue that this improvement is definitely not something that would make you proud, right?

So could you talk a little bit about the strategy that now you are following? And it's been 2 years since you followed that pricing led -- the segmentation led model to increase more transactions, but mixed success there?

[Murugavel Janakiraman, executive]

Thank you, Vivekanand. So let me talk about seasonality first. The seasonality definitely has an impact on the matchmaking business because when people look at starting something on the matchmaking, people do look into their auspicious period and people -- some percent of people abstain in the matchmaking -- abstain from the matchmaking process.

In Q2, in particular, if you look at the South, we have something called [Foreign Language] in Andhra, and [Foreign Language] in Tamil and also North India there's [Foreign Language] period. So this, again, it's a culture across the regions. During the period, we definitely see that activity goes down. So again, if you look at the last so many years of [indiscernible], there are some years we are able to overcome because of the different regions, but [indiscernible] something during the period or some other factor would have contributed.

But if you look at the historic trend, the Q2 always definitely lower than the quarter 1. But look at year-on-year, this time for whatever reason that the impact was severe. So it was much more than what we had anticipated. So this quarter definitely came in as a surprise in terms of the customer behavior in terms of their profiles and the conversion had an impact.

So while definitely Q2, it's not advised, it's definitely -- it's a low quarter for matchmaking business. It tends to go down because of the reason which I already explained. But again, as I said, for our -- we had a severe impact on the quarter 2.

However actually things I think are definitely bouncing back. And while this quarter we cannot forecast double-digit growth, but we think definitely in quarter 4, we can move to a double-digit growth year-on-year.

And come through the pricing strategies, yes, the pricing strategies are big on various things, to look at maybe educations or social economic status, various factors. If we look at our -- while the billing was sort of subdued, but still we managed achieve 8.3% billing growth.

So again [indiscernible] from last year from 2.2 lakh, we're talking about 2.4 lakhs, which is almost addition of 20,000 paid transaction in the quarter. So that's a reasonably good growth.

We continue to employ the pricing strategy because this is not all the customer right thing, but the right strategy to do. However, while we've definitely seen that the paid transaction moving up in terms of -- compared to what it was in the past. However, we definitely can get better on the same transaction.

[Vivekanand Subbaraman, analyst]

Just one follow-up. So since seasonality had impacted our business very adversely in 2Q, would it not be fair to say that 3Q would be a strong bounce back, at least in billing terms, given that there would be some pent-up demand? Because going by your logic, people seem to have postponed their decision of, let's say, signing on to paid matchmaking services because of inauspicious days and across the country.

So I'm just trying to understand if 3Q could be substantially better from a billing perspective. Revenue, I understand, revenue growth will be subdued, I understand because of weak building in 2Q.

[Murugavel Janakiraman, executive]

So in terms of the billing also because a good percent of revenue we get some renewals. So in terms of drop in the revenue and billing, it also have some kind of impact on there, some part of the business, which is renewal part of the business. We get good customer revenue coming from the people renewing their subscriptions. So definitely there will be impact on the renewal side.

So again, the pent-up demand, again, people [indiscernible] happen. If not, there will be strong, the pent-up demand and all, there will be like an year-on-year, the single level of the growth in terms of people coming up that will happen and all.

So we expect this quarter also the growth rise, definitely, while we don't see double-digit growth because of the reason which I already explained. But however, we expect to move to double-digit growth only from quarter 4 onwards because first we need to catch up on the growth front, I think the increase of this conversion in the quarter 3, and then we move to quarter 4, you can move to double-digit growth.

[Vivekanand Subbaraman, analyst]

Right. I'll ask one last question, which is on the business model itself. So one of your competitors, which is listed, they have chosen to follow a model where now they are moving to more premium than what you currently offer, which is chat being free and they are trying to increase traffic for the category, right, for their side and, of course, be more relevant in the category. Separately, we are also investing in a serious rating website, indicating that they want to try multiple things here to get growth.

In that -- on those lines, is there something that you are also trying to do, which can -- because this segment is clearly growing much slower than what one would expect of a deeply underpenetrated online classified segment?

[Murugavel Janakiraman, executive]

In terms of business models, we continue to remain what is the way we're doing. We think that's the right way to do. And in fact for us, the revenue drop has been the same across the market. It's not that we have seen any significant drop in any part of the market. Things continue to look the same, so we are not seeing any impact.

So for business model, the very business model we have been operating as a leader and we think we control the business model. In terms of overall, the category growth is that, yes, this category has been growing at certain percentage, 10% to 15%, that's the kind of growth. Again, while you are taking steps to upgrade the growth, and we have taken some of the initiatives have come with our strategies. We had a reasonable bounce back in the last 4, 5 quarters, while Q2 was one of the quarters. We hope to bounce back in Q4 and move on to double-digit growth.

So yes, I agree with you that while there are some challenges because another reason that this category also had some competition, but we've seen that sort of things seem to be probably coming to a stage where we see that competition impact will just continue, but again, the strategies and steps, what we're taking, we believe that we could be able to move to a better growth in the coming quarters.

[Operator]

We'll take the next question from the line of Prakash Kapadia from Anived Portfolio Managers Pvt. Ltd.

[Prakash Kapadia, analyst]

Yes. We've seen the second quarter in a row EBITDA has actually declined for us. And if I look at pre-COVID trends, revenues are much higher than pre-COVID, but we are seeing advertisement expenses of almost INR 45 crores, which is much, much higher. So what is leading to this increase despite we being industry leaders, shouldn't we drive growth and manage our profitability by pricing, revenue, revenue potential and a bit of cost management?

So looks slightly confusing to me. So where are we heading? Because ad expenses in a muted quarter are also so high. So one would guess if sales or billings are weak, we could have or we should have ideally cut down on some of these expenditures. So what is driving this? And what's the outlook on ad spends in the coming quarters?

[Murugavel Janakiraman, executive]

See, the ad spend, we expect to continue at a similar level. While we understand that Q2 was one of the challenging quarters, probably they're managed at marketing expenses because, again, [indiscernible] came in the middle of the quarter. So we thought that's the right thing to do in our country, in the market we've seen, because sometimes the profile acquisitions also helps in the coming quarters. Also we don't want to further impact that -- the quarter which was already seasonally a weak quarter.

Again, as I said, we didn't expect this kind of impact on quarter 2. This quarter for strange reasons that the impact was much more than what we had seen in the past. So however, the market [indiscernible] continue to remain at this level because we see that one thing that we have multiple brands to manage, but also that the increase -- that the marketing spend, the competitors continue to remain. More than that, we believe that continue to operate at similar level.

So while we are definitely working on our strategies and steps to drive the growth, again, the way currently it looks like the marketing probably remain at the similar level. And we are [indiscernible] from now on, able to carry the growth and now actually cause the increase in billing that [indiscernible] revenue would help us to get a better margin.

Yes, we definitely, this quarter was a tough and disappointing quarter. But however, we are confident of bouncing back on growth and [indiscernible]. But however the marketing spend driven at this level only. And in terms of other costs, I think as a company, we are definitely operating at a very efficient business. So continue to look at the ways to optimize the cost. And so that's always been the case. So I think the important priority of what we're working on is driving the growth and all, so.

[Prakash Kapadia, analyst]

So the only way to offset some of these higher ad expenses is to get higher revenue growth, which at least you alluded next quarter could be slightly challenging, but Q4 onwards, that double-digit revenue growth has to come in to offset some of these expenses. Otherwise profitability improvement could become a challenge in H2?

[Murugavel Janakiraman, executive]

Yes, I think the growth definitely, the billing growth definitely more of that.

[Prakash Kapadia, analyst]

And from the revenue side, you did mention some of the factors in terms of seasonality or some of the auspicious day. So was it in South of India only or this was witnessed in some of the other markets? And also, you could give us some sense of what is happening, say, North the West or non-South markets. So what is competition doing? Or what are we sensing in some of the other markets, except South?

[Murugavel Janakiraman, executive]

No. As far as the seasonality, it is across India. We know that in North there is a period called [Foreign Language]. So during that period people abstain from matchmaking activity. Again, only there are certain [indiscernible] not that everyone decide to take a break and all of that. During the period definitely you see that the profile registration goes down because there are people who are really religious or sentiment about these things. There are certain types of people.

So it's not that the entire India or all the people across India. It's only certain percentage of people, that's the reason why the drop is only [indiscernible]. So -- and again it's only during -- it's not entire quarter, again, Tamil Nadu is for a month and Andhra is for a month, North is for 15 days.

Again it's across region except some part -- some region in India is very limited. Kerala, and they're not too auspicious about it too, sentimental about these things. So it varies from market to market, but some of the market the sentient are definitely very high.

So for us, the drop is not limited to any particular region. It's across India, we've seen the drop. So that way it's a broad base. And so it's not one geography, it's every geography. So that way the impact is quite spread.

[Unknown Analyst]

Okay. Hello, this is [ Sonal ]. I'm assuming I'm audible.

[Murugavel Janakiraman, executive]

Yes, you are, please.

[Unknown Analyst]

Yes, sir. Sorry, there was a lag. So sir, I want to focus again on marketing, and pardon my knowledge of the business, but understanding from a marketing perspective that if your -- I consider H1 to H1, if your, let's say, marketing spend has gone up by like whatever INR 12 crores or INR 13 crore. Typically, in common sense is that we expect like a 3x to 5x kind of ROI on the marketing spend. And hence, let's say, the top line ideally would go up by INR 13 crores to INR 50-odd crores, then that's what I got from just attending FMCC calls essentially.

Now I am just putting that common sense in here that if that kind of a throughput is not expected or you see a softness in the market. There are 2 ways where you see maybe we need to change the channel or we maybe need to cut down the marketing budget. So what it's going to be if, let's say, your marketing burn remains the same as what it was right now. It doesn't go up. And you generate more cash. Maybe your top line is not growing what you want it to be. But -- and you actually tighten your funnels on your marketing spend. The ROI has actually become better. Is that something which on those lines company, I'm assuming you do think, but I'm just trying to, I think, open a discussion or dialogue here to just understand how you guys think about marketing. That's part one of my question.

[Murugavel Janakiraman, executive]

Sonal, so today when definitely marketing is one of the large part of our expense. And most of the marketing spend are towards on the brand side. So again -- so the marketing spend has gone up on account of multiple things. One is today we have multiple brands. And also we've seen that in the category spend has gone up substantially, so that now we need to probably defend our market position, defend our leadership. So that led to the increase in marketing spend.

The thing is that while the [indiscernible] marketing spent, while it's kind of an immediate impact. However if we don't defend our marketing or our reach or our leadership with a way of some increased marketing because the category marketing spend has moved up definitely, it can possibly have some kind of long-term impact all. It's important that, again, this category going through that intense competition or spend has gone up.

So we had to step up the marketing and all of that thing. While dropping the marketing in 1 or 2 quarter, while the adverse impact may not be -- won't be that. However we believe that the long-run it's going to have an impact on all business. But it is important that we have to kind of operate at a central level of visibility to ensure that we continue to remain at a level of leadership. So that's why the marketing spend has gone up.

So again, most of the marketing spend are the brand and the marketing team. So again, when the difficult mix has been increasing that today the good percentage of overall market [indiscernible] difficult. However last market spend continue to [indiscernible] our brand only. So I've seen progress are the ones, the competitive intensity or the market expense for this category comes down, the fact that we could be able to operate around this market impact. At this point of time, considering the category intensity on the marketing spend [indiscernible] that we need to operate at a certain level of visibility on the marketing spend.

Let also add to the thing, we have multiple brands compared to other players in the market. That also added to the increase in marketing spend. So maybe a couple of years down the line when that [indiscernible] comes to a certain level of marketing spend, then that part we could definitely be able to reduce the marketing spend.

[Unknown Analyst]

So sir, if I were to just understand this now just double checking on what you've explained, even branding can be done on a performance basis, if I understand the marketing correctly. So has our customer acquisition cost, it would have gone up because it's not converting into similar top line growth in the -- so is it so that our customer acquisition cost has gone up significantly, maybe Y-o-Y over the last 2, 3 years?

[Murugavel Janakiraman, executive]

The good thing is, Sonal, most of our customer acquisition are organic, that the central brand, what we have built. So while acquiring millions of profile and so most of the profiles are organic. There we don't invest money on acquisition. So that's the strength of the brand. So in most of the areas, the brand is [indiscernible] category. While certain percentage of marketing spend goes for [indiscernible] monitor ROI and other things.

So in terms of -- while the brands building -- brand building done only on digital, our category, we definitely see that at this point of time [indiscernible] necessary. Again, the things are changing. In India also things are changing rapidly now. So always question is what percentage digital, what percentage TV and all of those things because marketing become all the more challenging in the context as well. 5 years ago, 10 years ago marketing used to be far less simpler. Today it's increasing to multiple channels, OTT, many things. So marketing has definitely become a challenge now.

However, as I said, because of the brands being so strong, the majority of the profile acquisitions are organic. We definitely look at the various things, the profile acquisitions and ROI, everything [indiscernible].

However, in terms of the TV spend, when we spend the money, it's not that you want to get a substantial increase in profile. And so, yes, digital definitely look at the spend and the ROI and all, definitely those things are necessary [indiscernible]. So while there's always -- brand building can be done only on digital, but as I said, at this point of time we require the combination of TV plus digital as the best way forward. [indiscernible] things are changing and all kind of, sometime if you contemplate what is the right mix of the spent and all of those things.

[Unknown Analyst]

And sir, how -- I'm assuming a large part of our customers would be acquired online, right, more than 90% that customers acquired online. Is that correct in understanding? Just trying to understand how the acquisitions kind of work there?

[Murugavel Janakiraman, executive]

No, it's completely 100% digital. So it's nothing that you have any option in acquisitions, everything the customer will need to either download the app or register to and so on.

[Unknown Analyst]

So I'm sure this would have -- and I think you do have a physical outlet as well. But just trying to understand, is the customer acquisition cost cheaper in your physical outlets or customer acquisition because online, I think the customer acquisition cost have been going up significantly given COVID, given [indiscernible]?

[Murugavel Janakiraman, executive]

Yes. Sorry. I forgot to address the point. Definitely online acquisition costs because as I told you, most of the profiles are organic. We are not investing money on acquiring those profiles. However we do spend money on digital that includes our brand keyword as well. And definitely the costs have gone up because there is increased competition for our brands as well. So that also definitely has gone up in the last couple of years because of the -- again, the bidding costs have gone up for [indiscernible].

Yes, definitely, the cost of profile acquisition digital has also gone up. However, the physical outlet is not [indiscernible] part of profile acquisition. When people walk into physical outlet, mostly they go for paid transactions. So that way the physical outlets are not meant for profile acquisitions. They are mainly meant for customer acquisition or paid subscriptions.

[Operator]

[Operator Instructions] We take the next question from the line of [ Nitin Sharma from MC Group Research ].

[Unknown Analyst]

Two questions, if I may. First of all, on the Marriage Services segment, I think EBITDA loss is back at the pre-COVID levels, but revenue seems to be lagging a bit. Can you please provide some color on the progress on this business? And what are the typical challenges you are seeing in this segment?

[Murugavel Janakiraman, executive]

So, the wedding services definitely have been growing, and we expect wedding service to grow at this double digit. Now we have been seeing the benefits of the integrating ShaadiSaga into WeddingBazaar. We are definitely seeing the increase in traffic, increase in lead, increase in acquisition.

So the outlook for wedding services, the growth continues in double digit. However you know that we are still in -- it's a small part of our business, but it's growing at healthy pace. But last year was at the similar level. And if the growth continues this way, and we are hoping, confident that we will continue at this growth. I think the last [indiscernible] has come down.

[Unknown Analyst]

And any challenges you are seeing in this segment?

[Murugavel Janakiraman, executive]

I'm sorry?

[Unknown Analyst]

Any challenges you are seeing from the competition in this segment?

[Murugavel Janakiraman, executive]

So it's more of -- it's more than -- it's a progress. I think challenges are, I will -- in this category, again, there are multiple service stores in the category. We have makeup artist, photograph or caterer. Again the different service providers will come out at a different level, some of the service provider, they rely more on online. So we could be able to convert. So some of the categories, their conversions are a challenge. So it's not a single service provider in this category, there are multiple service providers.

So service provider like photograph or makeup artist and they're really unorganized and converting them online, it's a fairly -- relatively easy, and we see definitely good traction on those segments. Our some other categories within the wedding services like jewelers or apparels and all, there's hardly the brand and converting those categories and some of the category like caterers and all, it's not like they don't convert like the photograph and all.

So in the multiple service provider, they'd all come at out at different, different level. I think this category has been evolving, and there's definitely lot to be done and to increase the level of satisfaction into the renewal rate. But the thing is that, [indiscernible] segment, and we definitely see an opportunity to continue to grow in the segment. While there are challenges, the actual progress that we could be able to improve and there are challenges, so more of it's a progress.

This business is very -- still in the early stages, a lot of work to be done on the product side, service side and on the value delivery side. So we need to improve on all these areas, so then see the benefit of being a member, paid member of paid service provider, wedding services and then able to retain and be able to charge more as we progress. So yes, while there are challenges, but again, having said that, this business has been progressing well.

[Unknown Analyst]

Right. And the second question is, can you help us understand what kind of traction you are seeing with the Jodii app paid registration. Any data would be helpful. And also on the [indiscernible] side, I would like to understand how your premium subscriptions are doing, if you can again share some growth related data, that would be super helpful.

[Murugavel Janakiraman, executive]

Again, Jodii, it's in the early stages. And again, as a company, we don't want to do the breakup of individual segments. But again, Jodii is definitely in the early stages, again, so we continue to experiment on the segment. [indiscernible] progressing well. So as I said, while we see definitely some growth on the segment. But again, as a company we do not try to at this point of time kind of individual segments for competitive reasons.

[Operator]

[Operator Instructions] We'll take the next question from the line of Vivekanand Subbaraman from AMBIT Capital.

[Vivekanand Subbaraman, analyst]

Muruga, you have been raising concerns in the past with the government on Google's app store policies. Now that the Competition Commission has ruled against Google, do you foresee any benefit for your business and the industry? And further being a seasoned veteran in the tech space, would you be able to comment on the larger implications on the domestic tech space? That's one. And I have one on our business also, which I'll ask after this answer.

[Murugavel Janakiraman, executive]

Thanks, Vivekanand. It was a good verdict by CCI. So it still was Google wanted to mandate towards that, the companies who are operating digital businesses in India, digital service providers, that they have to use Google in-app billing system. And does it mean Google in-app billing system is that you have to pay certain percentage of transaction money to Google. It did vary from category to category and the Google expectation or what did -- again, for some of the category like us, they got -- 15 billing will go to Google.

Even otherwise that, initially it was the Google demand was that, only we have to use Google in-app billing payment. And later they said, we can also use other service provider; however, if we use other service provider, we have to pay 11% commission. What it means is that, suppose we use payment gateways is like say Razorpay or PayU or [indiscernible] various payment gateways, the charge is around, say, 2%. But again, Google is now billing us around 15%. So this is, obviously, Google was building the dominant that [indiscernible] because today almost 90% of the downloads are happening through the Google android Play Store.

So we took out the CCI because the Google more of interesting that the company's operating digital services, they need to use only Google in-app billing or even if we use other payment vehicle, we have to pay the commission and all of the thing. So this is more like a Google [indiscernible]. So again, you're seeing that [indiscernible] Google and Google [indiscernible]. So we have to see whether what Google is going to take. So if the Google go to MCLT, we have to go to MCTL. Startup players are kind of fighting against this one.

So what kind of implication [indiscernible] more like taxing the company, so the government tax, GST 18%, Google want to tax 15% as a revenue -- because only for the company operating in digital goods and services. They cannot charge additional 30% on companies offering the e-commerce product or [indiscernible] they kind of convincingly told, this is only for the company operating digital product like if the company [indiscernible] services company and all of those things. This company [indiscernible] Google kind of followed the similar thing.

And globally there are so many cases are going against both the companies in South Korea, again told Google that they cannot do that. So again, it's a good revenue opportunity for Google. They're trying to -- both Google and Apple trying to leverage dominance to take 15% to 30% of company revenue, basically transform into tax, okay, [indiscernible] services. And it's only limited to digital companies because they can't charge similar kind of revenue for other companies. So substantially that CCI [indiscernible].

The impact for Indian companies, look, it's kind of almost -- look at 15% or 30% revenue to Google, that definitely increase the cost of running the business and all of thing. I mean I don't think that it's the right thing for Google to do, that charging 15%, 30% of billing, forcing people to use Google in-app billing or even otherwise take commission on using other -- even use other payment company.

So it's important to Indian side of the ecosystem, so the startup companies are definitely against it and they have been fighting for it. And [indiscernible] also vindicated our stance on this one, so yes.

[Vivekanand Subbaraman, analyst]

Muruga, thank you much for the elaborate explanation. Does this have any bearing on your realization? And if you can talk to us about the proportion of transactions that happen directly through the Google payment system or through the other billing modes that you could have used? And is this going to have any financial bearing on our business?

[Murugavel Janakiraman, executive]

No, because we don't use Google billing payment system. We use the various payment gateways so that the commissions are really only 1.5% to 2%. So they're not changed for us. No benefit on [indiscernible] because it is in the way we have been operating. That way every digital company often use various payment gateways to conclude the transaction, while the UPA is more, that transaction limit to the debit and credit card, the transaction fee is likely more, but again is around 2% only.

[Vivekanand Subbaraman, analyst]

Okay. My second and last question is the -- you are running your matchmaking business profitably despite hyper competition resulting in depressed ATV and very high ad spends. So why not deploy more money in wedding services to chase growth? I mean that business, you seem to be targeting a category which is very, very underpenetrated, even more than your matchmaking business. And you -- could you give us an update on the business model? Any metrics that you are tracking in terms of traffic or monthly active vendors or, let's say, the monetization there?

[Murugavel Janakiraman, executive]

No, we are today India's largest wedding service marketplace. We have 1.5 lakh service providers on WeddingBazaar.com. So again, the integration happened this -- couple of quarters -- one of the quarters earlier. So we are seeing the benefits of integration and working on increasing listing, working on increasing the traffic.

I mean we want to get to the certain threshold of certain milestones, then we decide what we want to -- how do we want to take this business forward because we believe that whatever things we have done, we want to avail the benefits of the integration. We believe that we could be able to [indiscernible] the revenue for that, I believe we are operating, get closer to the profitability, then we figure out what is the next course of strategy and all of that.

At this point of time, I think the plan is to drive the growth, get close to the breakeven, then figure out, then work on -- not figure out, then work on the next phase of growth and all of the thing. So rather now investing much more on this category because what are the investments we have done, are they good enough for the kind of growth what you are seeing, all of that thing. As I said earlier, let's wait probably maybe a couple of more quarter down the line, then we can figure out what -- what to be done.

[Operator]

[Operator Instructions] As there are no further questions, I now hand the conference over to Mr. Murugavel Janakiraman for closing comments.

[Murugavel Janakiraman, executive]

Thank you all for joining this call. And I look forward to speaking with you during the quarter. If you have any questions, you can write to us. Thank you once again.

[Sushanth Pai, executive]

Thank you so much.

[Operator]

Thank you. On behalf of YES Securities, that concludes this conference call. Thank you for joining us, and you may now disconnect your lines.