JustDial

“At some point Omni and Omni revenues are going to meet Search revenues,” JustDial founder VSS Mani said in a call with analysts. During the March 2016 quarter,  JustDial launched JD Omni, an inventory management product to help small businesses manage their online and offline sales, and said that it saw setup fees of Rs 3.65 crore recognized in the quarter.

Omni will help small businesses and shops get their own website complete with a payment gateway and also link up with JustDial’s Search Plus app and update their inventory on the app.

During the call, JustDial’s CFO Ramkumar Krishnamachari said that the company is studying accounting norms to report the revenues from Omni. He explained that Omni’s revenues has two parts: a one time set up fee for a business and a license fee which can be paid monthly or in a single time.

VSS Mani and Ramkumar Krishnamachari spoke at length about the Omni product. Here are some take aways from the call:

– During the quarter, 2,500 Omni stores from Just Dial have been set up.

– Out of which, 1,800 stores have set up a website and app.

– These 1,800 stores were charged a one time setup fee which was recognized as Rs 3.65 crore in the March quarter.

– The one time setup fee costs Rs 20,000

– The licence rental fee is Rs 2,000 a month or Rs 3,500 a month which will list the inventory and services on JustDial. There is also an option of a one time licence fee for Rs 65,000 and Rs 99,00 (along with listings on JustDial for three years).

– JustDial expects 25,000 to 30,000 stores to sign up on Omni.

Fun fact: VSS Mani said that a good sales pitch presentation from a JustDial sales person would be 25 minutes.

Social features on SearchPlus app: Mani added that the SearchPlus app will be adding more social features soon. “You would see that our social section, the beta version, which we’re launching hopefully in the next few days, is like any other social media where you see your friends’ ratings. And actually if a friend has rated a movie you can like it, you can comment on it, you can have interaction with a friend and you can even click on that “Book Now” tab and book a ticket,” he said.

Employee additions and ad spends: JustDial will be adding more than 2,000 employees mostly for sales for the year. This would increase employee costs by about 25%. The company will also be spending around Rs 100 crore on advertisements. Mani confirmed that JustDial would see a compression of 5% on profitability with the increased ad spends and employee costs.

“I’m going to spend Rs 25 crore, Rs 30 crore and then look at it. We will start with maybe 10-15 crore look at it, how the effectiveness of that spend is, before spending further, so it is going to always be calibrated and will depend on the effectiveness of the campaign and how well we do,” Krishnamachari added.

In Q2 FY16, JustDial had said that said revenue growth was hit as the company did not make adequate hiring for its sales team.

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