ET Now In a chat with ET Now, Ramkumar Krishnamachari, Just Dial CFO, said that the company has added 1,000 customers so far and the company sees strong trajectory going forward. He also added that the company will be spending more on advertising to inform the consumers about the search and transact feature.
ET Now: What was the sequential growth in your paid campaigns as part of your overall listings? Have you taken any other further revisions on your tariffs?
Ramkumar Krishnamachari: If you look at the growth we are witnessing in Q4, we have bottomed out in Q3. We have added about 1000 odd people during Q4 and we plan to add another 2000 people. As a result of this is the sequential increase in the number of paid campaigns about 12000 excluding the omni and 14000 including omni. Given the trajectory we are confident that that with the additions it will only continue to growth. The full impact of our initiatives on scaling in the sales and marketing infrastructure should be visible in FY18.
ET Now: How many have completed on boarding and what is the kind of licence sale conversion and revenue generation you are expecting?
Ramkumar Krishnamachari: I don't want to predict anything about revenue generation. I do not want to predicate what is the quantum we are going to generate from Omni at this point of time. Whatever we have added during last few one and a half months of the FY14, 2500 odd customers we believe, we should be able to continue signing up on these run rates. There is lot of synergy between search and Omni. It is possible that we may have combined effort both on the search as well as Omni sales infrastructure. We are finalising the strategies and with the traction we have seen, we will be able to continue to momentum.
ET Now: What is the latest on Search Plus?
Ramkumar Krishnamachari: We are confident that we should be able to start the adding of commercial in June and the 100 crore we had estimated earlier will be spent in a calibrated manner over the next several quarters. We will look at each quarter and decide the spending for subsequent quarters, but the marketing spend is going to start from June onwards. JD is known as a search platform today. It is the first time we are going to introduce JD to the mass consumers as a search and transact platform. As search and transaction are getting integrated, it is important for us to spend on mass communication and let the consumer know that they can both search and transact on a single platform. The transition from being a search to search and transaction is going to be critical for us. That is why we made all those investments over the past two years in making it easier and convenient for the consumers to do both.
ET Now: Your paid campaign is a crucial key growth driver. Are you aiming at least a mid-teen growth this year?
Ramkumar Krishnamachari: As far as revenue is concerned, we have not seen the impact of competition. We have bottomed out in Q3 and from here it will only continue to improve. Definitely it will be better than FY16 on all parameters, but I would not want to stick to a number at this point of time. With all the initiatives we have taken now, I can say that FY18 number would be far better than FY17. The full benefit of that will accrue to us in FY18.
ET Now: What about the cash on books? How will you be deploying it over the next one year? Out of the Rs 100 crores spent plan, how much you have earmarked for Search Plus and JD Omni? Will marketing expenses be frontloaded in that case?
Ramkumar Krishnamachari: The focus will be on the Search Plus. We want to create awareness among the mass consumers about JD transaction platform. Omni, a B2B platform, will help SME to reach out to the consumers who are going online. There will be synergy and what we do on Search Plus advertising will have fall out effect of on small business. More transactions on JD platform will benefit the small business. Omni is just going to be a catalyst for making it easy for them to transact. The bulk of it will certainly go towards marketing on the Search Plus and we will take one quarter at a time. We will be starting sometime in June and then look at it, take a pause after Q1, look at the effectiveness and then we can start.
ET Now: How much increased hiring and marketing business for Search Plus will impact your reported EBITDA margins in near term? Will it stabilise in FY18?
Ramkumar Krishnamachari: Yes, the stability will come in FY18. In FY17, the twin initiatives of scaling up of sales force and marketing spend will definitely have a near-term impact on the margins. If I spend 100 crores in FY17, it could come down in FY18. But, at this point, I would not be too focused on near-term margins, because I am still at an investment space and as the business scales up, revenue growth accelerates, that will start contributing to the margin. In the near term, next few quarters, margins will contract and it should start improving from Q3, Q4 onwards and it should stabilise in FY18.
ET Now: Having completed the buyback last quarter, will the promoters consider raising holding through the open market purchases some time later this fiscal?
Ramkumar Krishnamachari: I do not want to discuss this right now. Definitely, promoter holding is more or less at 31.5-32%, we will just have to wait for the statuary period to be over before we start even commenting on this. From promoters' standpoint, they have completely focused on scaling up and growing this business.
ET Now: What was the sequential growth in your paid campaigns as part of your overall listings? Have you taken any other further revisions on your tariffs?
Ramkumar Krishnamachari: If you look at the growth we are witnessing in Q4, we have bottomed out in Q3. We have added about 1000 odd people during Q4 and we plan to add another 2000 people. As a result of this is the sequential increase in the number of paid campaigns about 12000 excluding the omni and 14000 including omni. Given the trajectory we are confident that that with the additions it will only continue to growth. The full impact of our initiatives on scaling in the sales and marketing infrastructure should be visible in FY18.
ET Now: How many have completed on boarding and what is the kind of licence sale conversion and revenue generation you are expecting?
Ramkumar Krishnamachari: I don't want to predict anything about revenue generation. I do not want to predicate what is the quantum we are going to generate from Omni at this point of time. Whatever we have added during last few one and a half months of the FY14, 2500 odd customers we believe, we should be able to continue signing up on these run rates. There is lot of synergy between search and Omni. It is possible that we may have combined effort both on the search as well as Omni sales infrastructure. We are finalising the strategies and with the traction we have seen, we will be able to continue to momentum.
ET Now: What is the latest on Search Plus?
Ramkumar Krishnamachari: We are confident that we should be able to start the adding of commercial in June and the 100 crore we had estimated earlier will be spent in a calibrated manner over the next several quarters. We will look at each quarter and decide the spending for subsequent quarters, but the marketing spend is going to start from June onwards. JD is known as a search platform today. It is the first time we are going to introduce JD to the mass consumers as a search and transact platform. As search and transaction are getting integrated, it is important for us to spend on mass communication and let the consumer know that they can both search and transact on a single platform. The transition from being a search to search and transaction is going to be critical for us. That is why we made all those investments over the past two years in making it easier and convenient for the consumers to do both.
ET Now: Your paid campaign is a crucial key growth driver. Are you aiming at least a mid-teen growth this year?
Ramkumar Krishnamachari: As far as revenue is concerned, we have not seen the impact of competition. We have bottomed out in Q3 and from here it will only continue to improve. Definitely it will be better than FY16 on all parameters, but I would not want to stick to a number at this point of time. With all the initiatives we have taken now, I can say that FY18 number would be far better than FY17. The full benefit of that will accrue to us in FY18.
ET Now: What about the cash on books? How will you be deploying it over the next one year? Out of the Rs 100 crores spent plan, how much you have earmarked for Search Plus and JD Omni? Will marketing expenses be frontloaded in that case?
Ramkumar Krishnamachari: The focus will be on the Search Plus. We want to create awareness among the mass consumers about JD transaction platform. Omni, a B2B platform, will help SME to reach out to the consumers who are going online. There will be synergy and what we do on Search Plus advertising will have fall out effect of on small business. More transactions on JD platform will benefit the small business. Omni is just going to be a catalyst for making it easy for them to transact. The bulk of it will certainly go towards marketing on the Search Plus and we will take one quarter at a time. We will be starting sometime in June and then look at it, take a pause after Q1, look at the effectiveness and then we can start.
ET Now: How much increased hiring and marketing business for Search Plus will impact your reported EBITDA margins in near term? Will it stabilise in FY18?
Ramkumar Krishnamachari: Yes, the stability will come in FY18. In FY17, the twin initiatives of scaling up of sales force and marketing spend will definitely have a near-term impact on the margins. If I spend 100 crores in FY17, it could come down in FY18. But, at this point, I would not be too focused on near-term margins, because I am still at an investment space and as the business scales up, revenue growth accelerates, that will start contributing to the margin. In the near term, next few quarters, margins will contract and it should start improving from Q3, Q4 onwards and it should stabilise in FY18.
ET Now: Having completed the buyback last quarter, will the promoters consider raising holding through the open market purchases some time later this fiscal?
Ramkumar Krishnamachari: I do not want to discuss this right now. Definitely, promoter holding is more or less at 31.5-32%, we will just have to wait for the statuary period to be over before we start even commenting on this. From promoters' standpoint, they have completely focused on scaling up and growing this business.
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