Exclusive: Growing Problems at JustDial.com

By Jayadeep Reddy

Posted on February 17, 2017

In new age startup ecosystem in India, Justdial.com is the very first success story. A local search engine moved tyh from small business to become the most successful IPO. It is a herculean task and thanks to the vision of VVV Mani, the founder who made this possible.

5 years after IPO, things do not look so easy for justdial.com. Unless course correction  is established there will be no sight of recovery for JustDial. Businesses generally goes through a path of continuous ups and downs before becoming a stable and performing company. In the due course some business lose relevance and get to the stage of no return and I doubt Justdial is moving in that path.

This is a classic story of not able to sustain the momentum. Innovation and being nimble should be in their DNA and it should be showcased in the earning. The transition from startup to growth stalled the product focus which brought in long tail of products to cater the consumer needs.

Sales Path
Over the last two years balance sheet of JustDial shows stagnancy and will eventually lead to depleting profits with YoY increase in costs. 2016 December quarter ended with 180cr in sales and 27.4 cr as Net profit. The same quarter of last year sales was at 171cr with Net profit of 26.9cr. YoY growth is almost ZERO. Sources says Sales teams are under heavy pressure to deliver and that the attrition is the highest this year.

Lost opportunities – 2016 saw unprecedented growth in  Mobile. Thanks to Jio and demonetization effort from govt. which created huge opportunities in mobile based marketplace. The justdial did not keep up with the growing user base preference. This was the first sign of weakness.

Is local  search business still relevant?

JustDial was no doubt was India’s no.1 local search destination. The company was catering to over 57 million unique users spread across 240 cities in India. Service is available on Phone, Web and APP.  Justdial is best known for phone based local information service where customes gets the service or business contact they are looking for with a simple call.  Sources say that over the last two years there is more that 45% reduction in call volume. Call volume has direct correlation with lead generation for which Justdial gets paid by the businesses. If the call volume reduces, JustDial cannot send the qualified leads expected by the paid customers, leading to dissatisfaction of eventual dropout.

Before the massive internet penetration in India, most people preferred to call JustDial and get the appropriate information. With the penetration of internet, people preferences have changed. More and more people prefer to search via Google and directly call them instead of going to JustDial. Though the search business is still valid, the quantum of leads generated via calls have shown a big decline with local search, quickly losing its relevance.

JustDial.com generates close to 27 million visitors per month(Data from simillarweb.com) and 15 Million directory searches in various categories. Over the last two years growth is stagnant. We should consider this as de- growth considering the rate of internet penetration in India. 

Move with tide – When user base shifted from phone call based inquiry to non voice based support. Justdial should have positioned itself as first choice search partner and lead generator. The initial ability to attract consumers for services with voice as a primary channel was not leveraged with the shift in user base preference.

Impact of Practo.com,Ola, Uber, UrbanClap, HouseJoy,Swiggy etc

Over the last few years companies like Practo have grown big time in the doctor information and appointment space. At one point of time JustDial was generating 15% of its inquires for healthcare and doctors. Now Practo is market leader in that space taking away 80% of search traffic from JustDial.com.Practo in a way is connecting the entire loop of appointment booking  with clinic management.
Each and every new app is eating away the share of JustDial.com.
Couple of years back,people used to call JustDial for taxi booking. With penetration of Ola and Uber that business is no more seen, Infact Google maps itself display the cabs availability when user searches for the directions. Likewise people are using UrbanClap, HouseJoy etc for handyman and home repair services. People no more call JustDial for restaurant inquiry as Swiggy, Foodpanda take care of it.  Moreover people are looking for specialty service provider not just an aggregator of information. Every business in any particular domain has a market leader with an app or website and eventually most of the categories that JustDial  is catering will have a market leader.

Not able to provide “Stickiness” with customer – The referral service is a dog eat dog business. You have to be agile in understanding the customer requirements and be proactive with service leads. You should be able to create enough “Glue” in relationship with both supplier and consumer to ensure long standing relationships. Justdial is missing its opportunities to new players by not having enough “Stickiness” in its relationship. Every event is looked as a transaction vs relationship building. The entry barrier is not safeguarded and it was breached by new entrants.

Impact from Google My Business

In a way Justdial competes with Google. Over the last two years Google has changed its local search and map business in a great way, Now most of the small business data is available in Google search with better visibility than ever and it is evolving continuously with machine learning capabilities. Google reviews has shown tremendous growth. Google Now sends alerts to the user to review the recent location they visited creating an intuitive experience. The intelligence Google is building in its search products like ‘Parking availability’, ‘Expected traffic’ to reach that location etc are definitely helping users and this kind of product evolution is now here to be seen in JustDial.com.
GoogleMyBusiness is simplifying all the tools and making it very easy for business to advertise and generate their own leads.

Emergence of New Models

People started adapting to new ways to get service from a business, instead of searching them online. Tapzo a Machine learning based app connects to the service provider instantly in few taps and people can pay online. While TAPZO has its own problems in growth, people are quickly adapting to these new kind of models.

Diversify Before Death

My above analysis is based on the market scenarios and the changing user behaviour.  The same patterns are seen in international market. yelp.com has shown a steady decline and it is trying to revive by changing their approach. I am sure that management at JustDial.com is also looking at the problems. I foresee JustDial trying their best to give shareholders a better return.

Understanding strengths and overcoming shortcomings with acquisition is the key to success. Justdial need to look at more R&D as an outsource model to streamline the business. Without key acquisition and in-organic growth in capabilities to create long standing relationship and varied offerings to suppliers and consumers, it will be a tough ride.

Over the last few years JustDial did not acquire any new business or technology which could help in diversifying their business empire. JustDial need to work on war footing basis to get back in business or else this is going to be a dead end.

Exclusive: Growing Problems at JustDial.com