JustDial management admitted several times on the earnings call that too much focus on Search Plus was the key reason of delay in hiring, which resulted in lower growth, we believe this might have resulted in lower acceleration of revenues from non top 10 cities
(13.5% of total business). Also, we believe JD has shown exemplary execution in its traditional search business and has acted as an enabler to users. We think SP is an extension of this. There is not an iota of doubt that India is at the cusp of internet revolution and with
pull factors like rising incomes, and comfort of online payments and push factors like falling device prices and lower access charges are driving consumption to shift from offline to online mode. While better internet penetration is still welcome, JD with its SP app is trying
to build a single window or a one-stop shop for online users.
While SEARCH PLUS will be the key monitorable and future driver of growth we believe non top 10 cities will provide the required growth to core business and will compensate for deceleration of core business. In our view JD?s initiative to create a platform which can be accessed by other online players/e-commerce vendors (similar to Alibaba) is the right strategy towards market place model. Also, JD?s cloud-based omni-sytem for vendors (specifically for SMBs) to cater to their technological needs related to inventory mangement, billing will be key catalyst to its adoption.
