LinkedIn currently has over 30m user profiles in India. This compares to 31m unique users Info Edge had at 2014 end. Initially, the company, market and we, did view LinkedIn as a significant threat to Naukri’s dominance on online recruitment. However, even till now, when LinkedIn in India has approximately the same user base as Naukri, we have not seen any material impact on Naukri’s operating or financial metrics. We believe this is due to two factors:
LinkedIn address a different set of jobs and job seekers. Naukri’s bread and butter business is entry to mid-level jobs, where volume trumps value. In contrast, LinkedIn is more suited for relatively higher level positions, where volumes are lesser, but value (to company and consequently LinkedIn) is higher. And, the nature of India’s economy and job market is such that Naukri addresses a much larger part of the recruitment market.
LinkedIn has been able to garner a larger user-base very quickly. However, it is building the recruiter side that’s more challenging and takes time and manpower. LinkedIn probably Read the rest of this entry »
Facebook has been busy building out the functionality within its Messenger app (e.g., photo & video attachments, stickers, P2P payments, VoIP calling, etc.) and today it announced Messenger Platform, which is a broad based effort to enable third-party developers to build apps ad other experiences on top of the Messenger app. Third-party apps, that add new functionality and allow users to further personalize their Messenger messages, can now deeply integrate with Messenger.
Facebook for Messenger As part of the Messenger Platform announcement, the company also announced the launch of Messenger for Business, which adds functionality for Facebook users to interact with businesses and for businesses to utilize the Messenger app to communicate with customers. For instance, an online retailer could send receipts, shipping time & information, and handle customer service questions. Payment transactions may also be supported. Zulily was highlighted as a launch partner.
Expanding the Messenger app to feature third-party developer support is perhaps the largest new product announcement of the day. While Messenger as a Platform is an important concept, given the size, the initial use-cases highlighted by the company are not particularly compelling on their own. The focus of the Messenger Platform will be to more easily allow distribution, discover, and attribution of the 3rd Party developers’ apps from within the Messenger app. As for the features Read the rest of this entry »
~75% of total gross revenue, and ~75%% of search revenue for Google is still derived from desktop in what appears to be an increasingly mobile app world as Google arguably remains the most important company in the (digital) media and tech industries.
As Per data from RKG, desktop’s share of clicks has declined by 19% since 4Q12, while the share of spend has only declined by 14%. This widening delta between desktop’s share of spend and share of clicks implies that in recent years improving desktop CPCs have been an important driver of growth in search spend. This is clearly evident given that desktop click growth has been basically flat in the U.S. in 2013 and 2014 while Google’s desktop search revenue has continued to grow. We believe this is due in large part to a higher percentage of desktop clicks coming from PLAs, which monetize at higher rates than standard text ads. Accordingly, assuming overall desktop clicks do not re-accelerate, desktop CPCs will need to continue to grow at rates similar to those seen recently, fueled by continued mix impact from PLAs. However, without PLAs desktop search revenue growth is likely to Read the rest of this entry »
Our positive view on the outlook for e-Commerce growth globally is driven by the theme of expanding online access. Internet penetration for a number of developed markets has now reached more than 80% while a number of European countries now have internet penetration rates of as high as 95%.
At the same time and supportive of the growth outlook for e-Commerce, in our view, is the fact that internet access across the developing world is rapidly increasing. For example, our Emerging Consumer Survey showed that increasing internet penetration among all of the countries surveyed, with greatest momentum in those countries with the lowest rate of internet access. For example, our recent Emerging Consumer Survey showed increasing internet penetration amongst all of the countries surveyed, with the greatest momentum in those countries with the lowest rate of internet access (India and Indonesia).
Mobile internet access is driving the theme
Whereas internet access initially and especially in the developed world was Read the rest of this entry »
Recent TRAI’s performance indicator report suggest that roaming revenue contributes to only 5.5% of total subscription revenue and hence lowering the roaming tariff could have limited impact as increase in volume would compensate for decrease in tariff. However lower roaming tariff on local call / sms (i.e. 65p/min) could cap the local tariffs in home circle as a local call (or a sms send) made from a sim acquired from another circle would become cheaper than that of a home circle sim (home circle tariff is technically under forbearance). Currently local calls contribute to 80% of the total outgoing MoU i.e. ~155min per sub per month.
TRAI has proposed reducing ceiling for: 1) Local outgoing calls while national roaming – Rs0.65/min (Rs1/min); 2) Long distance outgoing while national roaming – Rs1 (Rs1.5); and 3) Incoming call while roaming – Rs0.45 (Rs0.8/min). The last review was done in 2013. This proposal is aimed at the NTP 2012’s intention of “One Nation – Free Roaming.” TRAI has, however, rejected possibility of eliminating roaming charges completely. Local tariffs remain under forbearance (not controlled by TRAI).
As eCommerce / mCommerce retailing in India touched 10% of the overall organized retail volumes, competition gets fierce with Private Equity backing even small startups with niche ideas and ready to market portals. India’s online market comprises of various players with different models. Players that retail pretty much everything from electronics to FMCG products follow a version of Read the rest of this entry »
Key areas of investments would be to build innerwear, ethnic wear and sportswear brands. India business
should be profitable in the coming year; however, there will be investments in new areas (new categories and
new regions like new website in Singapore). Product mix is currently at 45% apparel, 45% footwear and another
10% from accessories.
Average ticket size is US$10-11 and tier 1 cities contribute 30-35% of its revenues. Yepme sells products through partner websites (like Myntra, Flipkart) which account for 15-20% of total sales. Organic traffic to website is 60% (direct traffic and organic search).
YepMe has 3 million transacting customers, 48% gross margins and 28% contribution margins. Visitor to customer conversion rate is healthy at 5%. Over 65% of its transactions come from mobile. The company maintains 2 months of inventory. YTD write off is less than 0.6%.
The company considers its Read the rest of this entry »
Xiaomi has surpassed Samsung/Lenovo to become the #1 smartphone brand in China in 3Q14, within four years of launch. Despite selling high-end hardware at a mid-range price point, our detailed pricing / cost analysis suggests an e-Commerce model of Xiaomi’s scale could have an operation margin of nearly 7-8%. If true, this would make the “Xiaomi model” one of the most profitable among global Android brands.
We think Xiaomi’s high volume per model (and thus BOM cost advantage) can be applied to other markets. But it may have to overcome challenges in Intellectual Property Rights, global branding and data security, while the availability of Google Mobile Services also lifts the Read the rest of this entry »