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Indiamart Intermesh Ltd
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Good evening, ladies and gentlemen. This is Ravi Gothwal from Churchgate Partners. And on behalf of IndiaMART InterMESH Limited, I would like to welcome you all to the company's Q1 FY '22 earnings webinar. [Operator Instructions]Joining us today from the management side, we have Mr. Dinesh Agarwal, Managing Director and Chief Executive Officer; Mr. Brijesh Agarwal, Whole-Time Director; Mr. Prateek Chandra, Chief Financial Officer; Mr. Puneet Gupta, Vice President, Strategic Planning and Investor Relations. Before we begin, I would like to remind you that some of the statements made in today's webinar may be forward-looking in nature and may involve risks and uncertainties. Kindly refer to Slide #3 of the earnings presentation for the detailed disclaimer. Now I would like to hand over the call to Mr. Dinesh Agarwal for his opening remarks. Thank you, and over to you, sir.
Thank you. Good evening, everybody, and welcome to IndiaMART's Quarter 1 FY '22 Results Conference Call. I hope you all and your loved ones are staying safe and healthy. We have already circulated our earnings presentation, which is available on our own website as well as stock exchange's website. I'm sure you would have gone through the presentation and detailed financials attached. I would be happy to take any questions afterwards. In the meantime, I'm pleased to report that IndiaMART has delivered a consolidated revenue from operations of INR 182 crores in the quarter, representing a year-on-year growth on -- of 19% on a lower base of Quarter 1 FY '21. Collections from customers stand at INR 170 crores in this quarter, and deferred revenue has increased from INR 628 crores as of June 2020 to INR 715 crores as of June 2021. I think we have been able to navigate the disruptions caused by second wave of the COVID much better than last year and have been able to sustain and deliver a profitable growth in this quarter as well. IndiaMART sustained buyer traffic of about INR 268 million in Q1 FY '22 and business inquiries of INR 162 million in Q1 FY '22. During the challenging second wave of COVID-19, our 90-days repeat buyers stand at about 55%. Unlike FY '21, where we had lost -- in the first quarter, we had lost about 14,000 customers, we saw lesser mortality and 6,000 paying customers have been declined on the sequential basis, closing the total count of 146,000 customers for the end of the quarter. We remain committed to enhance our value proposition and deliver value to our customers through organic and inorganic initiatives. As communicated earlier, in line with our strategy, we have made certain progress in the areas of accounting, logistics software, distribution management, SaaS and order management. Now I would like to hand over the call to Prateek to discuss financial performance in a little bit more detail. Thank you, and over to you, Prateek.
Thank you, Dinesh, and good evening, everyone. I will take you through the financial performance for the quarter ending June 2021. Consolidated revenue from operations were at INR 182 crores in the quarter, a growth of 19% year-on-year, supported by both increase in ARPU and paying subscribers year-over-year. Consolidated EBITDA was INR 89 crores, representing a margin of 49%. As highlighted earlier, the company posted a strong Y-o-Y revenue growth due to a low base of Q1 Financial Year '21 for comparison and maintained high margins as we continue to work from home and have lower cost. Net profit for the quarter was INR 88 crores with a margin of 42%, and cash generated from operations during the quarter was INR 61 crores. Thank you very much. We are now ready to take any questions.
[Operator Instructions] So first question is from the line of Amit Chandra.
So as you mentioned that, obviously, the impact has been lower as compared to the first wave. Then how do you see it in terms of the impact that we have seen in, like, in the various pockets, maybe if you can comment what has been the impact on the monthly and on the yearly package users. And as we see that -- we have seen sharp jump in realizations. So how do you -- how do we actually read that? So what has actually led to the increase in the realizations? So if you can provide some clarity on that, then I have a follow-up.
Thank you, Amit. As you can see, last time also, we had reiterated this fact, and this time also. Most of the customers that pay us monthly, they are the immediate ones who we come to know immediately because their monthly payments are not received and they are removed from our customer count. So even the last time and even this time, I think almost 80%, 90% of the total customer that we decline is coming from the Silver monthly bucket only. And most of the other customer buckets have either more or less filled up from the new upgrades or have signed up, so there we have not seen much of a decline. Now coming to your second question on the realization. As you know the total revenue itself has been increasing, which is coming from the deferred revenue. Deferred revenue last quarter had increased substantially, and so is the revenue for this quarter, and it is divided by the number of customers this quarter. And since most of the customers, which are downloaded or which are removed, are the lowest ARPU customers, and that is why you see a sudden jump in the average revenue realization per customer for the quarter. I believe that is just a quarterly aberration and as soon as we will recover this customer base, that will normalize back again to INR 45,000, INR 46,000.
Okay. Okay, sir. And also, sir, in terms of your investments that you have planned for the rest of the year and, like, what kind of recovery you're seeing. So based on that, can we expect like upfronting of some of the investments that we have been doing in terms of sales and marketing, in terms of outsourced sales cost because that has been coming down like consistently. So based on the market conditions and like based on the recovery that you're expecting, how do we see the -- how do you see the cost going forward in terms of your investment in sales and marketing and hirings and in terms of your outsourced sales cost? And also in terms of the increasing competition, like maybe some of the competitors are spending huge amounts of money on advertising. So are you seeing any impact of that on, say, traffic or in terms of any of our clients like shifting from IndiaMART to the competition or something of that sort if you're experiencing?
Yes. So since you have asked 2, 3 questions, let me try and answer them one by one. So first one, let us see the -- we have been telling this that in the October, November, December quarter itself, that we could not do hiring in the first 2 quarters of the last financial year. And we wanted the office to open before we start hiring; however, that did not happen until Diwali. So post Diwali, we started to hire a number of people and that could be seen as in this last quarter, we have been able to increase total employee on the roles of IndiaMART from INR 2,700 to about INR 2,982. January, February, March was good months where we could do the campus interviews, do the other interviews and hiring was good. However, as you know, April and May were pretty bad for everybody, many of our employees and many of people were very suffering. So I think there could be a little bit of a dent on the speed of hiring that we could do. But other than that, we definitely are committed to get back to our employee numbers and especially on the sales and servicing numbers as soon as possible over the next 2, 3 quarters. The second question that you asked was in the -- in terms of the cost guidance. That we have been giving very similarly that we used to have a pre-pandemic cost of about INR 115 crores, INR 120 crores. And we believe that it had come down all the way to INR 180 crores, which has now -- INR 280 crores, which has increased from INR 80 crores to INR 85 crores to INR 90 crores to INR 95 crores. And we continue to guide that it will remain in the range of INR 100 crores to INR 105 crores. Now the competitor advertising, I think, yes, you are referring to the recent advertising done by them on the IPL thing. But look at our buyers side traffic and the buyers side traffic remains steady. So I don't think advertising has led to any distraction on that side. And we will continue to evaluate. We have a good profitability as well as cash balance, and we will not be shy of advertising, if at all needed at any given point of time.
And sir, on this -- on the competition angle. Now with Reliance acquiring a majority stake and now the company is also having a full war chest. So are we, in any case, worried about that in any sense that huge war chest can impact our future ambitions? Or are we planning to tweak some of our strategy based on that, as of now?
I think we will maintain the same stance as earlier. I've been saying that more investment, more entrepreneurs, more industrialists coming into Internet as a sector, software as a sector, marketplace as a sector, e-commerce as a sector, is good for the entire sector. Secondly, in the last 2, 3 years, the number of Internet users have gone up tremendously, and their needs have gone up tremendously in terms of software needs, in terms of commerce need, in terms of -- and there are huge opportunity today to channelize different kind of things. And I don't think it will be possible for a single IndiaMART or a single Justdial or single Google or a single Reliance to do that. Many more people and many more entrepreneurs and talent and industrialists would be welcome in that side. Having said that, yes, Justdial was always a very different business than our B2B business. They had recently announced entry into B2B. We haven't seen yet much of the traction on that side or haven't heard anything, but we remain cautious and keep monitoring the situation properly. At IndiaMART, I think our focus will remain to see how do we continue to increase our network effects by way of more buyers and more suppliers coming there. And the supplier behavior data and the buyer behavior data that we gathered over a period of last 10 years and every year that we gather, with 55% repeat visit. That we will use towards behavioral matchmaking using AI and ML and different data techniques. Also, as you can see, we are slowly and slowly expanding our ecosystem to go beyond just discovery towards financial accounting, towards logistics, technology and towards distribution management or other management side. And we continue to look for more organic as well as inorganic opportunity. Within IndiaMART, organically, also our lead management system has been slowly and slowly going towards becoming a conversational commerce platform. And we continue to work slowly on that bit by bit. I'm sure these things will result. I hope that answers your question.
Next question is from the line of Amit Jeswani, Stallion Asset.
Dinesh Ji, when I look at your vertical things, you've done everything perfect. When I look at website views, RFQs, number of buyers, sellers, you created a great platform. So you are perfect horizontally. But do you think we've been very conservative on not going vertical? I mean, getting into newer products, which can solve large customer problems, because you have massive numbers of customers, probably the largest. What we are doing right now is a very small scale things. Your customers need accounting, they need websites, they need -- a lot of these SMEs need to get digital and you have a platform. Do you think -- because we have capital, do you think we need to hire the right kind of skill from places like Zoho, et cetera, to get that thing rolling? My question is more on the verticalization of IndiaMART, not on the horizontal things. Horizontal thing, sir, now it's an automatic platform that you have created. So my ideas are more based on how do you think about verticalization and what large new customer problems can you solve?
Okay. Thank you. So on the -- let's say, first of all, how do we expand our ecosystem horizontally. So within horizontal ecosystem, as you can see, we started with the website. We started offering them RFQ and BuyLead system. We started them offering the cloud telephony, lead manager and CRM. Now we are adding accounting logistics, order management. We already have a payment system in place. So horizontally, we have been adding multiple items, and we have been investing into multiple items. You are right, vertically, we have not invested so far into any, but we continue to look for any vertical inorganic investment opportunity. On the other hand, if you look at internally, we have -- last year also I said that previous to pandemic are more or less very little category focus was there within IndiaMART. It's only last year first time when we suddenly had to work on the medical as a category or medicine as a category. We realized that there is a huge opportunity to do things more horizontal -- more vertical category-wise. And we are actually in the process of increasing team and expertise on that side to -- so that more and more vertical fulfillment can be done and more vertical problems can be solved. And you're right, yes, hiring better people can definitely improve this whole area. And the better we are able to hire and better we are able to execute, that is how we will go. But to answer your question, we are looking at vertical -- vertically inside the category management and also we are expanding horizontally slowly.
Right, right. Dinesh Ji, last time when we had a conversation, you were speaking about 5 to 10x growth in the next 5 to 10 years. Have you set like a road map for it, that what I'm at 1.5 lakh customers, I need to go to 7, 8 lakh customers in the next 5, 7 years. You already have a large number of customers already on your platform. Of course, they're not paying. But do you have -- have you set like a road map? Or does it include many vertical things in that kind of goal that you've set?
Yes. So I think as a broad strategic road map, we have shown you that we would have a core SME business and the medium and large enterprise business. And then fintech SaaS and vertical commerce. However, if you ask me, do I have a business plan broken quarterly on that? We don't yet. We have done about 5 investments in different, different sectors so far inorganically. At the same time, we have done organically into 3 sectors, whether it is payment or whether it is CRM lead management or whether it is order management. So I think give us some 2, 3 more quarters when we will be able to give you a slightly more deeper insight on how does the growth will look like. I think we would have given you a better insight if the April, May would not have happened. But everything was started to fall in place since June, but I think April, May was a big surprise.
Right, right. Dinesh Ji, what is according to you, except discovery, what is the biggest problem of your customers? Like these are SMEs, largely, who are your customers. Would you say Fintech, would you say more on the logistics side, that is where our large focus? Because there are large profit pools you can target. You've already mailed one profit pool, Dinesh Ji. So I'm just trying to understand, which is that big problem which our customers you think have, which is adjacent to your IndiaMART platform? Is it logistics? Because we've tried once on the logistics side in 2015, '16, if I'm not wrong. So if you can also help us understand what stops us getting more on the logistics side also, so that we control the ecosystem better.
So I think we have conveyed it multiple times. So if you look at this particular slide. The dark blue ones are the areas which we have already worked upon and continue to improve upon. The light blue ones, there are 4 areas, which have been defined: one is the payment; the second is the logistics, technology and tracking; the third is transaction financing; and fourth is the enablement of business. I think on that side, enablement of business is a lot more fragmented because multiple different SaaS and multiple different solutions are to be integrated. It is not just one big ERP that you can acquire and SMEs will start using it. Unlike -- and similarly on the logistics side, the medium enterprise users, very different logistics technology as compared to a B2C brand. So Shipway -- whereas Shipway fits into a B2C logistics help Super Procure fits in into a slightly more larger size, medium-to-large enterprise logistics and transportation front. Payments front, we have been building organically and we are continue to look for more partners on that. As I showed, credit and transaction financing, we tried doing some small, small pilots before the pandemic. But after the pandemic, immediately, I think everything went on to the back burner. So currently, our focus remains on the enablement of business, logistics tracking and the payment side. And as we get more granular data, we will come to the transaction financing side.
Got it. One last question. Do you think, Dinesh Ji, this year also we'll be able to grow at 25%, around those levels? Since July -- June and July, you've seen a bounce. You probably might have seen a bounce in June and July. You think this year, by the end of year, we'll be able to do 25% odd kind of growth?
I will keep mum, not to answer this question.
[Operator Instructions] So next question is from the line of Mohit.
I just wanted to know with respect to the outsourced phase -- outsourced field sales representatives, which has usually disclosed. So I just wanted to know if you can get the numbers for those outsourced field sales representatives and total sales and service representatives. And that was number one. And number 2 is that going forward, since this field sales representative count has declined significantly from the last year, right from Q4 FY '20, so do we see aggressive hirings happen on this front, so as you know acquire more and more customers, thereby resulting in increased outsourced sales cost?
Yes. Mohit, this is slightly complex answer here. So let me try to explain you. So the way total field -- our total sales and service organization in IndiaMART is, is by and large, divided into 2 parts. One is the client acquisition side, the other is the client servicing, upsell and renewal side, whether they are on field or whether they are on telephone. Currently, almost 99% of our renewal, servicing, upsell team, which we call client servicing team, which actually brings about 80% of the revenue is in-house on IndiaMART role. So we have not experimented any kind of an outsourcing on that. However, on the client acquisition side.If you see about 2, 3 years ago, we used to have 100% in-house set of people. Then we actually started to hire some of the people on the outsourced payroll, like TeamLease or other companies. And then we also started to look at telecall centers, who could work with us either on a per seat option or on a per sale base over -- just like a DSA. And now we have -- we had said -- told you in the month of July, August, September, we started with the option of the franchise or a dealer, distributor network, spread in various cities where they operate a smaller branch kind of a setup, 5 to 10-people branch, as a third party.So the outsourced sales cost has now become very difficult to quantify in the number of people because there are so many different dealer, distribution and channel sales. Some of them are employing 5 people and some of them are employing 8 people and some of them are employing 10 people. Though we do have the count of -- overall count, but we do not know for sure if those are the people who are 100% working on IndiaMART only, because some of them could be selling software, some of them could be selling computers as well as IndiaMART, some of them could be selling telecom as well as IndiaMART.So that is why we have only now declared the employees on our own roles and the sales managers, which are managing this outsourced sale, because 80% of this new client acquisition team is now on the different outsourced model. So you will have to look at the cost directly on that side rather than the headcount. If at some point of time in future, I will be able to get a clear number, which I can give you in terms of headcount, we'll give you. But as of now, it is difficult to give you a headcount number rather than the cost.
Next question is from the line of Bharat Shah.
Yes. Dinesh, continuing from earlier question. There are many things that we have done well. And then there are others where we have taken some baby steps. And then there are areas which are -- we are aspiring to be something, but yet they have not commenced or taken any steps. So given the size of the opportunity, which is very large before us, unless you disagree that the size of opportunity is small, then it's a separate issue. But if you agree that size of opportunity is large, what is inhibiting us from moving about in a more, so to say, measured way. I'm not saying that we take rash kind of steps in haste, but if we allow opportunity to kind of be prolonged beyond the point, then to that extent our own competitiveness and our own strengths will diminish. So what are -- what is your view about all of this? How are you seeing the situation?
Bharat, you are right to some extent. And just to reiterate, there are 2 ways that we would want to tackle this large opportunity issue. Immediately after the IPO, we said, okay, let's start on 2-pronged strategy: one, the inorganic side and one on the organic side. On the inorganic side, we did 1 or 2 investments and then this whole last 15 months pandemic had happened, though we continue to do the more inorganic investments in the last 2, 3, 4 months after the first 6 months of the pandemic. On the organic side, we have been telling you that our conversational commerce part is shaping up well on the lead management and CRM side. However, you see very little happening on the payment and transaction financing side, I have told you that...
Mr. Dinesh, you may please continue.
Yes. So I think it's just that these uncertainties and challenges every now and then are distracting us from taking those 2 pronged approach in a much faster manner. That's the only thing you can say. But I fully agree that we should be looking at these opportunities both organic and inorganic in a measured as well as rational way, faster rational way. And we do not want to go irrational and rash increasing. So I think hopefully, we'll fall in place of -- or we'll fall to -- we'll meet your expectation in times to come.
Next question is from the line of Kumar Pandit, Somerset Capital.
Congratulations on the results. I just have a couple of questions. First one is could you just explain dynamics behind the...
Mr. Kumar, could you please speak a little bit louder?
Yes. I just wanted to understand the dynamics behind the ARPPU (sic) [ ARPU ] growth in spite of the decline in paying subs, and whether you think these dynamics are sustainable and whether these trends are sustainable over the near to long term?
Yes, Mr. Kumar, I think I've already answered that question. Due to certain decline of the number of customers, mostly from the lower ARPU segment, this suddenly looks like an aberration. I have already answered that once we recover -- start the customer growth base growth and recovery on that side, it will come down to the usual INR 45,000, INR 46,000.
Next question is from the line of Sudheer, ICICI Securities.
So firstly, in terms of the cost structure, right, you spoke about, let's say, reorganization or restructuring the sales team into 2 different models. And accordingly, our cost structure may have changed a bit. And we have also been seeing some of the COVID-led cost tailwinds for the time being in terms of, let's say, a higher mix of telecallers rather than put on fields -- put on streets so on and so forth. So when we reached the steady state, let's say, when COVID is behind and when we reached the steady state, how do we think about the steady-state margins at an EBITDA level?
I think I've already given that answer earlier also. We used to be a 30%-odd margin -- closer to 30% margin. And we had saved about 20-odd percent or increased the margin by about 20-odd percent. Half of that is because of the different kind of automation that we have been able to do, and I think there is a permanent shift in the business that has happened. And half of that is slowly going to come back because we have not been able to hire and we have not been going to the offices. And I think the employee cost is one of the biggest costs and other -- some of the other costs that will return. So I would say that if you take that into account, from closer to 30% margin, I think will be more closer to 40% margin in this steady state.
Got it, Dinesh. And the second point on the buyer side, traffic or business inquiries delivered so on and so forth. This quarter, I think there's a bit of buoyancy we have seen. So is this a decent part of this [Technical Difficulty] searching for product categories, like oxygen concentrators or oxygen cylinders, so on and so forth?
Yes. So in the month of April, a lot of oxygen related and CPAP, BiPAP and mask-related items were there. Some of them have sustained, like mask has become a permanent feature now.In the May, a lot of them were for the purpose of medicines, Remdesivir or tocilizumab and things like that because after a certain time, the medicine shortage had started. But in the June, I guess, the traffic had sustained. It is not that they -- whatever respite came in the April and May because in April and May on one side, these medical spikes came, on the other hand, naturally, the industry was more or less shutdown. So that actually balanced it. But we are seeing in the June month or in the current weekly trend, I think a 250 million to 260 million traffic seems like a sustainable traffic.
Got it. So even after that spike is over, that rush towards oxygen concentrator as a category is over, you are still seeing reasonable amount of buoyancy in the inquiries delivered and the buyer side traffic.
Yes, it is because very diversified, as you have seen in the past. We are coming from 50 different industries and almost 100,000 different categories coming from 1,000-plus towns and cities. Tier 1 cities only contribute about 33% of the buyer traffic, tier 2 city about 25% and then tier 4 -- tier 3 and 4 is actually increasing now at 41%. So we have a very well-diversified traffic across fashion, apparel environment, chemical, fertilizer, medical, agro, machinery and everything. So I guess we have seen even on a monthly basis, if you go and look at any of the indicators at Alexa or similar web, the traffic is maintained, and we believe that there is a permanent shift has happened towards Internet adoption and IndiaMART has proven to be a go-to place for our people.
[Operator Instructions] Next question is from the line of Bharat Shah.[Operator Instructions] Next question is from the line of Kushagra Bhattar.
So one question on this data advantage, which you were mentioning, of buyers and sellers on the platform with or the AI, ML, you can do on that. I just wanted to gather more sense on how with this core data you're sitting on, what sort of analysis or what sort of advantage you can do versus others, possibly because all of the businesses in the B2B space are sort of moving in a similar direction. So how are you thinking of differentiating yourself, in a way what additional offering, which you can provide, which others will not be able to?
I got it. I got it.
And also one related question is with the Reliance data sitting on, right, with all the Jio platforms and all, what data you think is probably you are missing today, which Reliance would be bringing to the table with their telecom and whatever Jio platform ecosystem they have?
So let me answer what we know of our own business. So there are 2 kinds of data. One is the database. The supplier database or the category database or the product database or the photos database or the ratings database that we have, which probably everybody has, even Google has or even Justdial has. Telecom companies also have some different kind of data. The second part of the data is the behavioral data or usage data. Now many, many places, you will see more consumer personalization that is being done.So if you go to Google, if you go to Amazon, if you go to -- and as a consumer, you go there, not very frequently, you go there frequently, maybe 2, 3, 4 times a month. Here, at IndiaMART, we do very differently. We do supplier personalization. What happens at IndiaMART, we have developed 2, 3 very good supplier tools, which bring the supplier back on our platform almost every day or almost some of them every hour. So for example, our RFQ system, our lead management system and our call pickup system, this cloud telephony system, all of these, they actually bring back the supplier and especially our paying customers, almost multiple times a day to our platform.And they end up doing activities on those kind of buyers, which are -- which they like the best. So if they like the retail ones the best, if they like the Agra ones the best over the Jaipur ones or if they like the sofa set ones best better than the -- so suppose there are 2 furniture manufacturers. Both of them say that they can do all kind of furniture. Both of them actually sell a sofa also and a table also and a chair also. However, the supplier 1 like sofas because he has some expertise in sofas, and he keeps coming and checking out RFQs of sofas and checking out replying leads to the sofas very frequently.However, the other guys are doing, say, office chairs very frequently. So we know that both of them are furniture manufacturers, but he is a sofa set specialist and he is the -- other one is an office chair specialist. This data is not available with most other platforms, and they are not even gathering this. Similarly, we know location affinity. Similarly, we know price point affinity. And similarly, we know quantity affinity. The other thing is the buyer profiling that we have created over a period of time. So a buyer comes to on our platform, say, once, and then he gave you his number, maybe e-mail and name and some information. And he put a requirement for say, sofa. Next time, he came in and he gave a requirement for, say, a chair. Next time, he came in and gave a requirement for, say, a sofa fabric. So we know that he is probably a sofa set integrator or a sofa set fabricator, and we display that to the suppliers. So it's an enhanced buyer profile that we have gathered over a period of time because the buyers have been repeating on our platform at 55% rate. So these are some of the special insights that we gather and thereby, we use them in the matchmaking. So we know by behavior that he likes retail leads. We know by behavior that he do not like retail leads. We know by behavior that he is an exporter. We know by behavior that he is an exporter or he is a local-only manufacturer. So we know all of these because of this data that we collect every day in day out. And the data sources are RFQ consumption, our lead management where callback and replies happen and the PNS system. And all of these data sources, obviously, over and above, there is a product data, which is there available. So that is a very specific data that we are referring to. And anybody will tell you that the relevancy is far more better at IndiaMART than at any place else.
Okay. And second part of the question, like data, you probably would be missing today, which Reliance is able to provide. Any sense on that? Or you won't be able to comment on that?
No, we have not been tracking Reliance, not been tracking Jio. So we know only about Justdial. Now that this development has happened, we will start to study that more in detail, as and when more details are revealed, and we'll try to see where are we, where we need to act. And we'll keep a close watch on the developments happen and then start to build our strategy accordingly.
Sure. Last question on the ARPUs thing. So is this the correct understanding when I break it off the ARPUs, that the platinum customers, the top 10% suppliers on your platform, the ARPUs for them have kind of moved from INR 180,000 to almost north of INR 2 lakhs. So is this a correct understanding, first of all?
No, sir. I think what happens is the way our revenue recognition work -- Prateek you would like to explain the way our revenue recognition works. It comes from the deferred revenue. And the way ARPU we calculate is end of the quarter customers. So the total revenue recognized during the quarter divided by the end of the quarter customers. And that is -- so that -- this does not mean that the ARPU has increased dramatically in a particular segment. It is purely because there has been a sharp decline in the number of paying customers by INR 6,000, and that is why it is reflecting. It is also reflecting that most of the decline has happened at the bottom of the [ plan ].
Okay. Okay. Got it. And a related question is, so when you mentioned that the ARPUs will kind of go back, I remember in one of the past few con calls you sort of hinted towards planning or strategizing towards price hikes as well in respective categories. So that -- so those price hikes are not -- you are not going ahead with, right?
I mean we have been doing minor things here and there, and that is how you see a longer dip -- if you see a longer duration from INR 33,000 to INR 44,000, about almost 33% price hike has happened over the last 3, 4 years, 4 years or so. The specific instance that you're talking about the category based or city-based pricing that we have not been able to roll out. And I don't think this is the right time to rule out that.
Next question is from the line of Bharat Shah.
So we'll be discussing that in terms of the size of opportunity, are we being a bit more measured than what is good for us? Or we think what we are doing in at a piece is something which is meaningful and appropriate. Therefore, in that context, you answered, I wanted to raise an alternative point of view on that. Supposing we have to -- if you have to think about IndiaMART 3 to 5 years down the line, what do you think IndiaMART would look like? What will be the key defining aspects of IndiaMART that you think it will look like? Otherwise, you would regard that as a missed opportunity?
What we think we will look like is already there on this slide. Puneet, can you put up that slide again.
No, I said in 3 to 5 years' time and not today.
Yes, this is 3 to 5 years' time frame. This is where we would look like. This slide truly depicts what we want to look like in 3 to 5 years' time.
Which means dark blue or light blue, whole boxes will be cleared and will be attained.
I mean ,80% of these boxes should be ticked.
And the reason why it is as yet not there is because of a strategic reason or not having adequate talent tool or some other reason why it is kind of being moved over slowly?
Mr. Bharat, I think until last year, we were only doing the first 2 quadrants. We were only doing the discovery and we were in the process of doing conversation. The next light blue color items we had put down only in the month of October, November, December last year. So from there, we are only sitting in July. So it's been 7, 8 months when we thought that we will actually start doing all this.
And once we cover 80% or more of the quadrants, you think strategically our remit and our plans would be in -- from your point of view, it will be satisfying, and what is appropriate for the opportunity?
That is what is our thought -- collective thought as of now.
Next question is from the line of Manish Gupta, Solidarity Advisors.
So Slide 32 is a fantastic transparency in terms of how your franchise is being developed. I had one query and one request. So the query is that is it possible for us to report the percentage of inquiries that have been fulfilled successfully as a percentage of total business inquiries delivered?
Sir, that number is only available to us on a sample feedback basis, and we get almost 100,000 feedbacks every month. So out of the monthly daily unique inquiries of about 8 million, 7 million that we have, 26 million in the recent quarter. So if you divide it, about 9 million per month, we send out feedback mailers and to all of them. And about 2%, 3% people respond back, which becomes about 150,000-odd feedback. And based upon that feedback and since that is not a very, very, very reliable feedback that we can say that this inquiry is fulfilled or not fulfilled, whether the payment has happened, whether the actual transaction happened. We have a sample data which tells us on every week basis or every month basis, what is the fulfillment ratio going on. As of now, the buyer fulfillment ratio typically trends at about 40% of the times. So 40% of the unique buyer inquiries are fulfilled. That would vary dramatically from city to city, from a tier 1 to tier 3 and from a category to category.
Okay. So my sense is the range that this is a very useful metric to see how the platform is servicing its end purpose. And as long as you're being consistent in the way you're assembling, I think even if you would report this metric based on the samples you are doing, it might be very useful. But I think this is something I'd request you to think over and see if you could report. But there might be issues there, which might skew the data. But if you believe that the sampling is representative, and if the 40% is trending higher or trending lower, I think it gives some good feedback operationally.
So on a monthly or a quarterly basis, this number may or may not change dramatically. But on a yearly basis, as part of my roadshow and as part of my IPO road show and QIP roadshow, many of you had asked this question, and I had answered that over the 3- to 5-year period, this number has kept moving up from 20-odd percent to almost 40-odd percent. However, in the last year, 1.5 years, the number of buyers themselves have gone up tremendously in the last 2 years again. And the number has still stayed at 40-odd percent. So maybe as part of -- the current year's annual report is almost done, but maybe as part of the annual reporting, we would try to give this some color on this.
Okay. The second query I had, Dinesh, was, I repeat Slide 32 is very, very useful. Is it possible for you also to share, going forward, what is the percentage renewal rate of subscriptions of your top 10% suppliers -- sorry, top 10% customers?
Top 10% customers, the renewal rates are above 90%. They used to be as high as 94%, 95%. In last year, ever since the pandemic happened, that has come down to about 90% or 89%. And we have said that the top 10% of our customers, the churn rates are less than 1%.
Yes. So my question was that can we add that to this quarterly data back that you're sharing?
On the top 10% customer?
Yes. Because again, it's a very good metric to look at operationally.
Yes, we'll definitely note down your suggestion and look at that.
Last question I had was, in your employees, the product and tech employees, that seems to be flat or going down, anything to read into that?
That -- there has been a specific -- otherwise, there have been about 500-odd, but there has been a specific downturn in the last year, last 4, 5 quarters. And that has started to increase. So if you see this quarter itself that has gone up from 419 to 464.And also, many of the -- this product and tech and data employees, a lot of them are now becoming more technology employees and more product employees and less data employee because data-related roles we have started to outsource at various places. And so whatever you see is, about 498 was probably the highest in the Quarter 1 just before the pandemic and that had some natural churn and we did not hire. But I think we are filling this back, and we are aggressively going up there. So we would be -- actually, I would be guiding to go up to 600 very soon there.
With this, we come to an end of the Q&A session. I now hand over the call to the management for their closing remarks.
Thank you very much. I really feel elated that you guys have a lot of interest and a lot of confidence in the opportunity size and that gives us a lot of inspiration and confidence that we have a lot more to execute and a lot more green grass ahead of us. Thank you very much for posing the confidence. And I would say stay safe and have a nice weekend. Thank you, everybody.
Thank you, everyone. On behalf of IndiaMART, this concludes this webinar. Thank you.