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Online listings and contacts provider Just Dial is aiming to become tomorrow’s retailing giant, at a fraction of the cost of other standalone entities. The company is developing in-house software across verticals such as electronics, eatery & show bookings and is planning to rent this on a pay-per-use basis to vendors.
Just Dial isn’t aiming to just beef up its online classifieds business; it also plans to gain a share of the online transactions pie. Founder and chief executive V S S Mani says for a standalone vertical to see this opportunity and turn profitable will be tough. But users will come to Just Dial looking for products and services. “If I can provide transactions at my end, it’s going to be value-enhancing for the customer,” he says.
Recently, the company acquired a property in Bangalore for Rs 37 crore. Here, it plans to build a software development centre in the next two-three years and focus on adding more verticals that can be transaction-enabled. The company’s capital expenditure is expected to be five-seven per cent of revenues.
The company also launched an online service to order food; this will compete against the likes of Zomato.
For this service, Just Dial has already signed up about 3,000 restaurants across the country.
Soon, the company will also launch an electronics and durables shopping service to be used by manufacturers as well as retailers. This will help compare prices and purchase products online.
It would also launch a ‘quickquotes’ facility within the Just Dial platform. To enable advanced search across all categories with just a few keywords, it is upgrading its primary search box.
The company wouldn’t engage in warehousing and logistics of goods, something that has burnt a hole in the pockets of most online retailers. “We don’t want to have inventory or logistics of our own to deliver products. We will put up platforms and enable businesses to come online and deliver their own products through their own sources,” Mani says.
The classifieds company hopes to sign new users and work on a rental-and-commission model with them — users would pay for the goods or leads Just Dial sources for them. For payments, buyers can opt for credit cards or the cash-on-delivery model.
<b>Too early, say analysts</b>
However, analysts aren’t factoring any growth from the transactions side in their forecasts just yet. They say it’s too early to decide which segments will make money, as well as the revenue potential from such ventures.
Jignesh Kamani, analyst, Nirmal Bang, says, “We are not factoring any revenue potential from transactions yet, because it will take at least two-three years for Just Dial to roll out services and see some revenue traction from these services. The company will have to install software for various vendors and retailers and there will be technical glitches. It’s not going to be easy.”
Through the next 18 months, the company’s ground sales force will be increased from about 600 to 2,000.
“We have to educate users about how to use the service. You may launch anything, but to get people to act on it is not easy. As a brand known for years, we have a better chance of being successful,” Mani says.
About 74 per cent of the company stock is locked-in till May. Says Kamani: “Just Dial is expected to record a 25 per cent rise in revenues for one-two years, but it will probably do so for a longer time. Eventually, the listings growth will slow. Transactions business will contribute to growth in the long term, but it’s too early to say which vertical will do well and which will not.”
Just Dial has increased its total listings to 10.1 million, up 23 per cent compared to last year; its paid campaigns have risen to 238,000 in the September quarter of 2013-14 from 187,000 in the year-ago period. While revenues increased 28.6 per cent annually to Rs 112.7 crore during the period, net profit increased 85 per cent to Rs 28.7 crore, driven by higher margins. Now, about 70 per cent of its searches or queries are online, against 35 per cent in 2009.
JUST DIAL EXPANDS ITS SERVICES
* Electronics & durables shopping service for manufacturers an retailers
* Online service to order food
* Show bookings
