When one of India's biggest matrimonial matchmaking websites, Matrimony.com launched its initial public offering (IPO) on Monday, it was inundated with suitors. After three days of raising funds for its stock exchange listing, the US$78 million had been oversubscribed by more than 440 per cent.
It appeared to be a coming of age for the online matchmaking industry in India.
But despite the success of the IPO and trends, such as growing internet access and an ongoing tradition of arranged marriages in India, analysts are casting doubt over the sector.
“It's not an ideal match for investors,” says Siddhartha Khemka, the senior vice president of research at Centrum, a wealth management and investment banking firm headquartered in Mumbai. “For online matchmaking services, the number of unique visitors is key. The total number of unique visitors for the top three players, declined from 3.75mn in March 2015 to 1.76mn by June this year. While the decline in Matrimony.com has been lower compared to others, the falling trend in the industry is a cause of concern.”
The backdrop looks attractive. India's wedding services market is estimated to be worth $50 billion, according to widely quoted figures.
There are a number of criteria that are typically considered critical when finding a suitable match in India. Suitability is often judged by factors including caste, religion, income and skin colour.
The reach of matchmaking sites is expanding with the rise of smartphone and internet usage in India, on the back of rising incomes and low data costs.
Arranged marriages are still a prevalent practice in the country. Parents often pick out partners for their children, or the parents will in many cases at least be very involved in the decision.
Matrimony.com, the first matchmaking company in India to go public, earns revenue through its various subscription models. Centrum's research shows that Matrimony.com's average spends over the past two years increased from 3,655 rupees (Dh209) to 4,605 rupees. Nevertheless, competition is fierce and there are hundreds of online matrimonial services in India and Mr Khemka note that there are "low barriers to entry" into the industry.
The biggest Indian online matrimonial company, Shaadi.com, boasts 35 million members worldwide.
While it my look like “a good story” with the rise of technology helping unite Indians with partners from suitable backgrounds, amid heavy migration flows to different parts of the country and abroad, Sujan Hajra, the chief economist at Anand Rathi, a financial services company based in Mumbai has “doubts over the business model for online matchmaking sites.”
Matchmaking websites are unlikely to generate repeat users, he says, whereas a job portal for example has return business, he points out.
“You'd hope that people wouldn't be getting re-married every three years.”
Another factor at work against the online matrimony sector is that although it will frequently be the parents who manage the profiles of their offspring on the website, this is changing.
Single Indians have a number of options available to them which are more targeted towards their generation, including dating apps such Tinder and a service called Woo, which aims to bridge the divide between matrimonial services and more casual dating apps.
For a country which still has a relatively conservative attitude towards relationships, Tinder has performed well. The app's user numbers jumped 400 per cent in 2015.
"A noteworthy trend is the shift of partner decision from elders to singles," says Sukamal Pegu, the co-founder of Marrily.com, an online matchmaking start-up launched in Mumbai last year. "That is why there has been a visible push from matrimony companies to woo singles."
Marriage and weddings are an important part of Indian culture. Indians are willing to fork out money on finding the right partner for themselves or for their offspring. With a population of more than 1.2 billion, technology gives companies the scope to target far flung places in even the most remote parts of the country.
“Until now matrimony sites have been targeting urban centres and tier two cities. But lately attempts are being made to address the rural segment,” says Mr Pegu.
The potential is enormous for companies that get it right, he believes.
“Despite being such a marriage centric society, only about 4 per cent of marriages in India happen through online platforms,” he says. “This is changing rapidly not only with the democratisation of the internet and devices, but also with the generational shift where young Indians are taking control of not only their career and lifestyle choices, but also that of their partner choice. The whole stigma of being on matrimony or dating sites is not there with the current generation anymore.”
His company is banking on cracking the market with the latest technology.
"Realisation there is a role for artificial intelligence in discovering the 'connect' people are looking for is dawning now. Marrily and more companies in the future will be harnessing the power of machine learning for matching and helping people find their life partner faster. The matchmaking space in India is undergoing a fundamental shift and and you will see lot more disruptions and innovations."
At the other end of the spectrum, Radhika Shah is one of India's traditional matchmakers. She runs Radhika’s Matrimony, based in Ahmedabad in the western Indian state of Gujarat. Spotting a lucrative opportunity, she left the fashion industry to become a matchmaker four years ago.
She travels across the country, meeting prospective brides and grooms and their families. Her basic fee is 50,000 rupees, and if he matches a couple successfully, she charges families 200,000 rupees to 500,000 rupees. Ms Shah has a team that conduct background investigations on the individuals that she is trying to match.
“Online matchmaking sites are doing something different – I go to their homes and meet them, I advise them,” says Ms Shah.
She doesn't think the traditional matchmaking industry is losing its lustre because of the rise of online websites. “Families are willing to pay money for personal matchmaking. You are not married to one person – you are married to the whole family in India.”
In one case, Ms Shah relates, a family in Delhi that was trying to marry off their son to a woman from a very wealthy backgrounds and boasted a fleet of BMWs and Audis. When her team investigated, they discovered that the family had rented all the cars in order to elevate the eligibility of their son in wealthy circles.
“Online companies don't offer these kinds of services.”
But Matrimony.com is eager to capitalise on the services it can offer. Through various websites, it has branched out to create other avenues for couples and parents to organise their wedding through the company, from booking photographers to venue hire and jetting off on their honeymoon
For its part, Matrimony.com, remains confident that its investors have entered into a happy marriage.
“We are indeed overwhelmed by the response to the IPO,” says Murugavel Janakiraman, the founder and managing director of Matrimony.com. “I’m confident that together we will deliver value for all stakeholders in the years to come.”
