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Info Edge: Recovery in Naukri, 99acres with traffic and engagement up over last few quarters

In the quarter ended December 31, 2020, Info Edge India Ltd. saw recovery in Naukri and 99acres with traffic and engagement up over the last quarters. Naukri traffic hit an all-time high in the quarter, with registrations up 25%, unique applications up 25%, and usage up 15-20%. IT and ITeS verticals are driving recovery and others are recovering as well. 99acres saw improvement in demand for ready-to-move houses, with customer queries touching an all time high in Q3.  

Naukri retained high market and traffic shares in recruitment search, despite curtailing in marketing spend. Investments in Jeevansathi have given an edge over competitors and is reflecting in growth in user base, the company claimed.  

Check our update on Info Edge India Ltd, financials for Q3 here

Recruiter, job seeker activity back on Naukri

  • Billings: Rs 201.4 crore, down 4% YoY
  • Revenue: Rs 189.5 crore, degrowth of 17% YoY 
  • IIMjobs billings: Rs 6.6 crore, 35% growth YoY

The vertical saw good recovery in collections and billings, with recovery across all sectors; IT and ITeS saw maximum growth, with recovery in telecom followed by pharmaceuticals, healthcare and real estate; there was slight recovery in travel and hospitality for the first time this year. On the job seeker side, new CV registrations were 15,000 per day, up 25% YoY. Average CV modifications stood at 440,000 per day, up 6% YoY and 11% in December compared to December 2019.  App downloads are up 30% YoY. Job seekers left the platform seekers during the months impacted by the COVID-19, but have “come back with a bang” in the past 2-3 months.

Q3 numbers:

  • Average resume searches daily: 617,000
  • Recruiter email connects: 4 million
  • Resumed modified: 440,000
  • Job listings: 426,000

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  • Total resumes: 73 million
  • Job seekers that availed premium services: 58,039
  • Unique Clients: 52,704

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IIMjobs

  • Registered users: 3.25 million, 1.9 million on IIMjobs, 1.4 million on Hirist
  • 25,000 jobs posted every month
  • 2.2 million applications / month

Naukri’s opportunity depend on India’s economic growth 

The Naukri opportunity size is huge since the platform currently captures roughly 25-30% of the white collar recruitment market, according to Hitesh Oberoi, managing director and CEO, Info Edge India. Some companies do half their hiring from Naukri and others about 20%. The market can be very large in the long run depending on how India grows. If India becomes a 5 trillion dollar economy five years from now, the number of companies and employees will grow and can grow 5x-10x in the next 10-20 years. 

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Naukri works with 75,000 companies in India. The leading white collar job sites in China work with over half a million enterprises; blue collar classifieds companies in China work with 1-2 million companies — that’s how big the Chinese economy is. There is no limit to how big the money can become in the long run; “it depends on whether India can fulfill its potential”.

For growth in the short-run, Naurki can increase usage and the number of people being hired, by improving search and user experience, growing the database, better matching seekers with companies, etc. The company will continue to work on campus hiring, recruitment automation, machine learning to improve platform, and on data products side. 

Catering to the blue collar job market in India 

The blue collar jobs website JobHai is fully functional and in Delhi NCR for now; it already has the highest number of jobs listed in Delhi. The company is working on some features and rollout, figuring out strategies around digital marketing, job acquisition, and resume acquisition. The company is confident of entering 2-3 more cities in the next 6 months. For now, it is not looking to monetise this offering, and is looking at a 5-10 year game. It will unlikely move the needle in the company’s core business at least in the next 18 months. 

IIMjobs also runs a tech hiring platform called Hirist; the sales teams of IIMjobs and Naukri has been merged. Through Naukri’s sales engine, IIMjobs (and Hirist to a smaller extent) is being taken to a lot of existing Naukri customers, who have liked the product, Oberoi said. While the blue collar market is much larger in volume (than the white collar market), it’s unclear how monetisable it is, what ARPUs and unit economics will be like, which is why we are just testing it in Delhi. The idea is to get traction and users onto the platform. 

Naukri Learning 

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With Naukri Learning, the company is trying to build a marketplace of online courses. Though it has been running for a while, there was more course providers since ed-tech has become happening now. Most courses of ed-tech can be used to upskill people, the Naukri database to help working people understand which skills and course are in demand.

Recovery in 99acres; competition spending on ads

  • Billings: Rs 52.4 crore, down 3.5 YoY% 
  • Revenue: Rs 44.9 crore, down 22.9% YoY 

Billings reached 96% of last year’s levels. All business verticals i.e. new homes, rentals, resales, and commercial, showed quarterly recovery. There was a “massive jump” in inquiries, with resale inquiries “going through the roof”, seeing 50% growth in some markets and 80-90% jump in smaller cities. New homes and resales saw more recovery than rentals. with strong growth in demand, with the number of inquiries touching an all-time high in both new homes and resales and later commercial as well. Owner listings are up 20-30%, with broker listings are down 20-30%, although brokers are slowly returning. 

More clients are likely to come back to advertise in the coming months; overall advertisers’ spend is going up.

Real estate competitors are spending on real estate  

There has been more competitive activity in online real estate in the last few months. It is likely that 99acres’ marketing spend will go up going forward. 

There is a return of ad activity from competitors, Housing has been aggressive in spending in all media in recent months. “We are rational and conservative with our spend, but we will be forced to respond if others spend more,” Oberoi said. Market share movements due to advertising spend are temporary in nature since all players go back to ground zero if everyone increases ad spend. Everybody spending on advertising is irrational because its impossible for the market to grow beyond a certain rate, he added. 

The marketing strategy targets both dealers and owners; the goal is to get all genuine supply on the platform, regardless of the source, because it drives traffic. Listings are not back because of a slight tweak in business model in addition to the fact that brokers are slower to get back to the platform after COVID-19. We were getting repeat listings from brokers, this has been changed in certain markets, he said. 

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Growth opportunity for real estate 

Real estate has been terrible shape in the past few years for various reasons, including demonetisation, the impact of RERA, and the NBFC crisis. “Its’s now getting to a place where real estate is becoming an attractive proposition”, since prices have corrected and interest rates are low. If the market does pick up, it could be a big opportunity, he said, while also noting that 99acres is a leader but is not a dominant players like Naukri is.  

Answering a question from an investor, Oberoi said it’s very hard to say when 99acres will become profitable at the PAT level, since that is a function of how fast the topline grows. If we are able to grow the topline at 20-40% annually, then it’s only a matter of time.

The second factor is competition, if other players start discounting and advertising aggressively, then “we will be forced to respond”, Oberoi added. Although 99acres would like to as rational as possible with spending, it has to defend its traffic and market share. “No matter what, we cannot afford to let go of that,” Oberoi said. 

99acres is also working with Teal, a real estate analytics company Info Edge has invested in, to see if it can offer an additional service to 99acres users using Teal’s algorithms. 

  • Total projects: 1,77,200 (under construction or ready-to-move-in)
  • Total listings: 9,18,985 (including 4,32,166 owner listings). Residential: 7,80,813; and Commercial: 1,38,172

Jeevansathi active user base up 20% YoY 

  • Billings: Rs 26.2 crore, up 17% YoY 
  • Revenue: Rs 24.7 crore, up 15.5% YoY 

The platform’s growth is supported by faster rise in internet users in Northern India. 90% of users traffic and time spend is on the Android and iOS apps.

The platform saw growth momentum,  with active users base growing at 20% YoY. The company doubled down on features such as online verification, video calling, video-based online meetups, etc, to drive engagement and improve platform safety. 

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Invested aggressively in content for Shiksha

  • Billings: Grew 27.9% to Rs 16.9 crore 
  • Revenue: Grew 23.5% to 13.2 crore 

The company invested aggressively in content to get more users and shown signs of traction. The Shiksha platform has become more stable, and the company has launched more tools for now. Oberoi said that with regard to Shiksha that the company took their eye off the ball, and is now working on getting the basics right. It’s possible that educational institutions are open to spending more money online after the pandemic.

  • Pageviews: 691 million annually
  • Registrations: 5.6 million annualy
  • Total course listings: 295,000

Investor Presentation | Earnings Call Recording

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