Online listings and ecommerce company JustDial had reported an operational revenue rise of 6% to Rs 179 crore for the June quarter (Q1 FY17). Of this, the company said that it recognized a revenue of Rs 5.5 crore from its Omni business. Omni is an inventory management product it introduced to help small businesses manage their online and offline sales. In the preceding quarter JustDial said it saw setup fees of Rs 3.65 crore recognized from Omni.
In a call with analysts, JustDial’s senior management spoke about the business and how it sees Google as its competition. Notes from the call:
1. 6000 businesses signed on Omni: VSS Mani, founder of JustDial, said that 6,000 businesses have signed on for Omni. However, out of the 6000 that the company signed, they recognized revenue for about 2000 contracts.The total number of contracts increased from 2500 in the preceding quarter. The revenue mix was roughly split 30:70 for upfront payment and monthly payment.
The monthly 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).
2. Competition from Google: Mani elaborated that JustDial’s biggest competition in right now Google as the search behemoth has been getting into more loacalized searches.
“I think the biggest competition for JustDial is Google. There is none of the others as competition because everyone else is doling away money. So if you are doling away money, then you can’t be my competitor,” he added.
The management explained that overall about 82-83% traffic comes from Google. Of that, that around 80% is organic, rest about 20% would be inorganic. “So the inorganic spends, as a proportion, has gone up but then it has not gone up significantly because we are focused on making sure that we optimize the spend. We don’t overdo it,” CFO Ramkumar explained.
The management explained that the rest 18% would be direct or referral traffic. “Overall, of the 100% pie split of, say, around mobile traffic is about 55% of our overall Internet traffic, within that 55%, about 85% comes from mobile site, rest through apps,” they added.
“So whenever our user searches for any particular keyword on, say, Google or any other search engine, unlike others we don’t prompt the user to go to our app first. We are happy if the person lands on our mobile site because objective is to provide information at the earliest,” Mani said.
3. JD Global de-merger and international business: “So we had this small data and content team which was operating in JD Global as part of the international operations, you know, our idea is to consolidate all the international assets under the umbrella of Just Dial and hence as a part of this strategy, we are, you know, bringing in the divisions which was running under JD Global into JD India so that all the international operations are rolled up under JD India. So that’s the rational and idea behind the de-merger,” Mani explained.
He further added that there is an opportunity for JustDial to a local search engine in mature international markets. “There are lot of mature markets where you partner with the vertical players – there is phenomenal kind of thing that you can do, but then, see, like we have to do a good job in India, India business has to stabilize, then getting on to those things. So those are all on the cards but right now the timing of it I don’t want to share anything nor do we have any specific timelines for these products,” he added.
4. Search Plus not an area of revenue: “I don’t see that to be a major revenue growth for us. I see more of core search contributing to the revenue growth and that’s where our efforts and traction are.” Mani said. However, he added that Search Plus is absolutely mandatory for its Search business to survive.
“You cannot have search engine without a transaction capability, so that is why Search Plus is immensely important but how do you go about monetizing Search Plus is a long, long story; you cannot really jump in it right now… And I strongly believe even if you monetize Search Plus, there has to be a unit economics in every transaction. We can’t just keep on losing on every transaction and then prove to the world saying that one day we will have all these margins and that will add up to it,” he added.
5. Ad spends: “As far as the ad spend is concerned, it will be calibrated perhaps 20 crores per quarter…we may look at and that’s something which we will look at it each quarter, look at the response and then make the subsequent stand,” he added.
6. No plans to get into the taxi aggregating business: “We don’t have any such plans; we only are aggregators. We only aggregate other people in one platform and you can see right away when you search for taxi, you get both Ola and Uber and other providers,” VSS Mani, founder of JustDial said.