Can Just Dial Reverse Slowing Network Effect with Omni / Search Plus Launch ?

Just Dial Slowing Sales - Omni SME LaunchJust Dial’s revenue growth for Core Search business has decelerated meaningfully over the last few quarters. While growth may have bottomed out, the initiatives taken by the management will take a few quarters to yield results, in our view. Management reiterated that the slowdown in revenue growth was not led by any increase in competitive activity, but due to a lesser focus internally on the search business. It plans to add 2,000-2,500 people to its sales team (both tele-sales and “feet on street”) over the next 9-10 months, which should address the issue of growth.

The total listings on Just Dial platform is ~16mn and it has the potential to move up to 20-25mn. It is planning to start a program of

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Why Just Dial Search Plus Launch Delayed ?

Justdial Search PlusAccording to Just Dial management, the delay in the launch of Search Plus has arisen because the company is working on a better user interface and plans to launch the product when it is fully ready. Monetization remains a secondary focus; the primary focus is on driving usage and transactions on the platform once it is formally launched in Sep-2015. The company plans to launch its services and host an analyst meeting after the launch.

According to management, the top 11 cities have shown revenue growth of 20-22% yoy, primarily volume-led, and the revenue growth in non-top 11 cities has been upwards of 70% yoy. Management believes that non-top 11 cities start with a low yield (revenue per campaign) but that moves up significantly over a period of time as

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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

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JustDial from Local Search to MarketPlace e-Commerce – Compete Flipkart / eBay / Amazon

JustDial from Local Search to ecommerce facilitatorJustDial is likely to generate non-linear revenue growth in the time to come with the launch of new transactional nature services like food delivery, table bookings at restaurants, placing order for wine, taking appointment with a doctor, placing order for flowers and cake (tie-up with ‘Ferns N Petals’), grocery and medicines, courier pick-up service, laundry service, travel booking (Redbus), AC maintenance services etc. Several of the above services are already operational and the rest will likely be launched shortly. These unique services and first mover advantage (as a one-stop shop) in the same should create a diversified scalable revenue stream for Just Dial. These services will allow

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