Internet search firm Just Dial shares have done remarkably well in 2013. The stock has more than doubled in the last 12 months. Now, the company has launched a new service through which customers can make bookings for restaurants and place orders for merchandise. Just Dial plans to monetize these services through a fixed fee. Just Dial's revenues are growing at 30 per cent year-on-year and the company hopes to sustain the momentum and add to margins. (Watch the full interview)
Here is the edited transcript of an interview with Just Dial chief financial officer Ramkumar Krishnamachari.
Tell us about the new launch called search plus service?
We are witnessing a shift in the internet space because of the increased usage through the mobile platform. For Just Dial it is natural to position ourselves where users are, as our focus has always been on the user. Search plus is all about providing the user convenience of doing many things on a single platform. It is providing the convenience, the speed and the price discovery.
It's logical extension of what people do post-searching on our platform. It can be anything - booking a doctor's appointment, ordering grocery, ordering food from restraint etc. And we have also launched a version for market place. The market place gives user the convenience of ordering, the speed at which they can get goods delivered and price discovery.
This is a unique platform for users to discover prices of offline stores. We are also leveraging ecosystem today that exits in India of delivery. For example if you are ordering a Samsung phone or a Nikon camera you will find the neighborhood stores in your area in this marketplace and users can get the things delivered in 3-4 hours' time.
It's a huge opportunity for offline stores to have an online platform for themselves. It provides a level playing field for them, which otherwise is expensive and for users it provides convenience speed and price discovery.
How will you monetize it?
Our focus currently is on the users, more the traffic on our platform the more will be the opportunity for monetization. We plan that as the user traffic grows on our platform, the vendors will be provided with an opportunity to participate in this with online presence.
So we will have one integrated sales force, and one integrated operational infrastructure team which will execute this. We will be going to these vendors to educate them and explain the benefits of having an online presence. For many of these services that we provide they will either be paying rental for having an online presence or a transaction fee.
This will be in addition to whatever these vendors are paying for being on priority when users search on our platform.
When can the new service start contributing to revenues?
Meaningful contribution to revenue should happen from 2015-16 onwards. Give the value proposition to the vendor and the user we believe that putting any number will premature for me, but I would say the opportunity is immense and we are very excited about it.
How much are you spending?
The strategy right now is to get the product and technology right and have the vendor adopt and use it and then got to the user. We are on the first two stages right now, we will be going to the users and explain them the benefits of this service. So yes we will be having a one-time spend to popularize it among user community.
What will be the impact on margins?
Doing this for first time so difficult to say, but it will be one-time spend. There is an inherent operating leverage in to the business, if we want today we can expand the margins by 300-400 basis points but our focus is on growth rather than margin expansion.
Are you adding employees?
Two areas where we are making investments are on the enhancement of sales force and making of the technology team. But despite making all this investment, we will be able to show some expansion year-on-year.