LinkedIn has ~300m registered members worldwide. It entered India in 2009 with an office in Mumbai. The company has grown since and currently has offices in New Delhi, Gurgaon, Mumbai and a technology center in Bengaluru. India and Australia are the two most important markets for LinkedIn in Asia Pacific, and its penetration in Asia except for the English-speaking markets is still relatively low. India's importance can be highlighted by the fact that LinkedIn has 26m users (8.6% of the total base) in India, the largest in Asia Pacific and second largest only behind the US (33% of the total). LinkedIn also has a ~40-member engineering team in India, the only location outside the US where all functions from research to sales and operations are carried out.
However, despite India?s relative importance and its membership being only slightly lower than Naukri's (38m resumes in the data base), LinkedIn?s India revenues are only ~10% of Naukri?s revenues (~20% of LinkedIn?s Asia Pacific revenues), and its profit is ~5% of Info Edge?s standalone profit (which essentially is from Naukri as other segments are currently loss making).
Aside from its robust membership growth, we believe the platform?s user engagement metrics give it a strong competitive advantage. LinkedIn does present a longer-term threat to Info Edge, which even Info Edge admits. However, we believe that it is still too small. The network effect (traffic, members) of Info Edge and aggressive marketing will be the key to contain the threat, in our view.
