JustDial Spending Heavily on Sales & Marketing to Expand Reach

JustDial Spending to Expand ReachJustDial, the Local Yellow / White Pages Search Engine which diversified into e-commerce is spending heavily in expanding its reach by adding more sales force augmented with online Ad campaigns.

Currently it has a good presence in about 25 cities, although is touching 100 cities through either its own sales team or freelancers. Further, it intends to spend Rs600-1000mn to increase awareness and promote JD Search+ in FY15. Management believes that despite these additional costs / expenditures, benefits of operating leverage should lead to ~100 bps margin expansion.

Justdial does depend on Google for traffic acquisition (spends US$10,000/month on Google AdWords ), the rising penetration of mobile Internet is reducing this dependence as people access Justdial through its app. Interestingly, even for WAP traffic, 70% comes directly to Justdial, underscoring its brand recall.

State of JustDial e-commerce Platform: Fourteen services are live on the platform, with bus ticket reservation the most recent. The company revealed – (a) for branded electronic goods, it is increasing its involvement in fulfillment, (b) it is providing the facility to update prices/ inventory through a phone call, SMS or an API, (c) about 80% of the transactions are cash-on-delivery. It has also tied up with payment solution providers to enable payments by credit/debit cards and is also in the process of launching other innovative payment solutions and (d) while Search+ is currently being offered for free, the company is considering bundling its subscription with that of Search. It has also launched banner ads recently, which too could form part of the bundle.