Chinese Virus Covid-19 has impacted JustDial’s Portal & App traffic from the start of the lockdown in India. Traffic has started coming back slowly on easing of restrictions in tier-I / II cities. SMEs are taking a cautious stance on advertisements.
JustDial’s revenue stream is dependent on spending on advertisements by SMEs. Loss of revenues for SMEs, on account of Covid, has driven them to stop / defer spends on the platform. Further, the business mortality may also result in erosion of company’s client base. Also, July collections currently stand at 60% of pre-Covid levels. The company highlighted that challenges in the business are to sustain for at least 1-2 quarters.
Tier II/III cities represent 34% of revenues and 55-56% in terms of campaigns. 55% of both listings and traffic are from tier I cities. Growth in tier II/III indicates lower ticket sizes (~40-45% of tier I). Also, the lockdown restrictions are easing earlier in tier II/III cities.
Paying Customers have opted to renew contracts at later dates. These deferrals, as well as discounts, delay in activation of campaigns led to a decline in collections. Customer churn has remained at 40-45% yearly for the last two decades. About 18-20% can be attributed to business mortality. The company has not seen any material difference in churn rates of monthly plan and upfront payment plan customers.
Monthly contracts Earlier in February 2020, the company pushed to increase monthly plans and improved it to 70% of total campaigns. The plan was to monetize customers using setup fees and provide customers the flexibility. Of the Rs1,135 mn of collection, Rs500-520 mn were from monthly plans. From 70% of monthly plans, it has now dropped to 25-26%. Ideally, the company wants monthly plans back to 70-75% of total
In an attempt to boost revenues, JustDial is attempting to add B2B listings on its portal. We are not very clear yet on how they would market and position this platform. In order for this business to become a sizeable revenue stream, it would require special marketing focus, something that may not materialize in the very near term.