Justdial says 95% of Indians still loyal to offline stores, sees faster growth in Tier 2 and 3 cities

About 90-95 percent of Indians still prefer to visit local businesses where they can interact with the service providers, bargain, and build relationships despite players like Urban Company and Yes Madam existing in the market, says Shwetank Dixit, Chief Growth Officer of Justdial, a local business search platform.

This is particularly true for services like haircuts, where personal touch and trust are important factors, and this is where Justdial steps in, he said.

"The top 11 cities used to hold the majority of Justdial's revenue in terms of geographic distribution. However, there has been a major increase in traffic and revenue from Tier 2 and 3 cities in recent years. While these cities may take time to surpass the revenue contribution of the top 11 cities, their growth rate is much faster," Dixit said.

Today, Justdial's revenue primarily comes from vendor partnerships. "While we have recently started advertising to vendors, it currently accounts for a negligible percentage of our overall revenue. Our focus remains on driving user traffic and connecting them with relevant vendors," Dixit added.

Justdial, originally known for its voice search service, recognised the growing importance of digital platforms and became an early adopter by launching its website in 2007.

Justdial's revenue grew 23 percent year-on-year (YoY) to Rs 1,043 crore in FY24, while operating profit surged 152 percent Yoy to Rs 216 crore and net profit jumped 123 percent to Rs 363 crore.

In the first quarter of FY25, Justdial recorded its highest-ever quarterly revenue of Rs 280.6 crore, up 13.6 percent while net profit grew 69.3 percent to Rs 141.2 crore.

Mobile-first approach

Justdial has also jumped on the trend of increasing mobile usage and implemented a mobile-first strategy. "85 percent of our 181 million visitors in the first quarter of FY25 accessed our services through mobile devices. While voice traffic has decreased to around 3-3.5 percent, it still constitutes a substantial portion of our user inquiries," he added.

The most popular categories searched on Justdial include healthcare, home services, products, and local businesses while some of the top-performing categories are restaurants, packers and movers, pest control, beauty services, mobile phone dealers, and AC repairs.

Even though Justdial predominantly serves local businesses, it also attracts advertising from larger brands like Dr Batra, DHL, Metropolis Healthcare, and Castrol.

Targeted advertising

Dixit stresses that one of Justdial's core competencies is its ability to offer highly targeted advertising. Businesses can specify their desired locations, ensuring their ads are only shown to relevant users. This coupled with Justdial's comprehensive analytics, provides useful insights into campaign performance.

Although Justdial's advertising spend has remained relatively consistent in the past year, with an allocation of around Rs 24-25 crore, the company has shifted its focus towards quality leads and user experience. "Instead of simply driving traffic, Justdial now aims to ensure that users are more likely to contact its paid vendors," Dixit said.

Technological innovations

Additionally, Justdial has invested significantly in technological advancements like AI and ML, OCR technology, page speed optimisation and review summarisation.

“We don't use AI like as a gimmick like most,” he said.

The challenges associated with something as "simple" as review writing are significant, according to Dixit. "Many users, particularly those with limited English proficiency from Tier 2 and 3 cities find it difficult to express their thoughts effectively. The fear of being judged or criticised for their writing skills further discourages them from sharing their experiences,” he said.

Justdial introduced an AI-assisted system to simplify the process by presenting users with a series of simple yes/no questions. Based on a user's responses, the AI generates a review that can be edited and submitted.

One of the challenges faced by Justdial was identifying fake businesses and removing fraudulent reviews. By analysing business activity, review patterns, and other data points, Justdial was able to detect and remove fake businesses and reviews.

According to Dixit, the Catch-22 here is that to address these issues, some platforms offer incentives for writing reviews. However, this approach often led to an increase in fake and misleading reviews. Users were more likely to write reviews for rewards rather than based on their genuine experiences, compromising the authenticity and reliability of the review content.

To prevent fake reviews, Justdial requires users to link their reviews to mobile numbers. This makes it more difficult for individuals to create multiple fake accounts and write numerous reviews for the same business. Additionally, Justdial uses data analysis techniques to identify and remove suspicious reviews.