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Just Dial Ltd
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Ladies and gentlemen, good day, and welcome to the Just Dial Limited Q1 FY '23 Earnings Call. [Operator Instructions]. Please note that this conference is being recorded. I now hand the conference over to Mr. Abhishek Bansal, CFO, Just Dial Limited. Thank you, and over to you, sir.
Hi, everyone. Welcome to Just Dial's Earnings Call for First Quarter Fiscal '23. Our operating revenue for the quarter stood at INR 185.6 crores, witnessing 11.4% sequential growth and 12.2% on a Y-o-Y basis. Our adjusted EBITDA, excluding ESOP expenses, stood at INR 11 crores versus a loss of INR 80 lakhs in previous quarter and a loss of INR 10.4 crores in June quarter last year.
Our employee expenses have increased by approximately 33% on a Y-o-Y basis, led by 45% Y-o-Y increase in headcount across sales, technology, content, marketing functions and increments in recent quarters. Our advertising expenses stood at about INR 6.5 crores for the quarter.
Other income stood at negative INR 60 crores during the quarter due to MTM loss on our INR 3,700 crore treasury portfolio due to rise in bond yields during the quarter. Yields on 2- to 3-year AAA bonds, which mostly reflects the underlying of our treasury, went up by 135 to 150 basis points on quarter-on-quarter basis during the quarter. On a year-on-year basis, the same stood at about 205 to 220 basis points increase. With yield stabilizing, treasury income should return to normalcy. And in any case, treasury yields should be looked at on a 2- to 3-year basis rather than a quarterly basis since we typically hold our investments for 3-year plus period to ensure they are tax efficient. Led by this MTM loss, we had a loss of INR 48.3 crores at net profit level.
Coming to business update. We continue to focus on selling on monthly payment plans. We signed up approximately 70% customers on monthly plans in last quarter. Our sales headcount has gone up by about 53% on a year-on-year basis. We have seen our monetization continuously improve significantly on month-on-month basis since last November, December. And the same has started showing up in top line sequential growth as well.
Our paid campaigns grew by approximately 22,000 counts to total of about 484,000 active paid campaigns. Collections stood at about INR 201 crores during the quarter, witnessing 12.2% sequential growth.
Deferred revenues stood at about INR 353.4 crores, which was up 4.5% sequentially and 15% year-on-year. Sequential growth in deferred revenue despite focus on monthly payment plans where upfront collections are typically lower is encouraging. The realizable value of sign-ups that we did in first quarter stood at about INR 235 crores to INR 240 crores. So realizable value is essentially total money that we expect to receive in 1 year from both upfront and monthly plans that is sold during the last quarter. So this, as I mentioned earlier, acts as a lead indicator for us to see where our collections and future P&L revenues are headed.
Our monthly ECS collection, which is money received from direct bank debits for monthly plans stood at about INR 33 crores for June month versus a low of just INR 13 crores in October '21. The ramp-up in sales hiring is yielding good results, and we should see better monetization going forward.
Overall, as far as reported P&L is concerned, our sequential top line growth reflects improved -- improvement in monetization over the last couple of quarters. Margins are currently suppressed because most employee costs hit our P&L immediately. As we see our top line ramp-up in coming quarters, we should see margins improving as well.
Cash and investments stood at INR 3,740 crores as on 30th June. Coming to operating highlights. Traffic stood at about 148 million unique users for the quarter, growing 19% on a year-on-year basis. 84% of this traffic comes on mobile platforms. Total listings in database stands at now about 32.8 million.
In a nutshell, the core business is clearly on our recovery path. And endeavor is to get it back to pre-COVID levels of top line and profitability as soon as possible and grow thereafter. Our new initiatives are getting rolled out to users in a phase-wise manner. Focus there is to get user experience right for these products and broadening coverage in terms of product services and geographies.
So with this update, we shall now open the floor for questions for further discussion. Thank you.
[Operator Instructions] The first question is from the line of Vivekanand from AMBIT.
I have a few questions. So starting with the bookkeeping ones. Could you give us a split of the campaigns and revenues by the top 11 cities and others? That's one. And the other bookkeeping question is, we saw costs in the current quarter of year to be much lower than the run rate that we were seeing in the last 7, 8 quarters. So any thoughts on how we should look at this number going ahead as well as advertising? Those are my bookkeeping ones. I want to ask a few others after this.
Sure. So, Vivek, firstly on campaigns and revenue distribution. So top 11 cities last quarter contributed about 43% to campaigns and about 64% to revenues. This particular distribution for last 2, 3 quarters has largely been in this particular range.
On ESOP expenses, yes, current quarter ESOP expenses are lower, primarily because the expenses that are getting recognized right now are from tranches that we have allocated almost 2 years ago. There haven't been any substantial ESOP -- fresh ESOP allocations in last 1 to 2 years. And the way accounting [ versus ] that ESOP expenses tend to be front-ended. So for example, if there is a ESOP scheme which [ was at ] 25% each year, the expense booking in first year is first 25% plus half of second 25%, plus 1/3 of third 25% and so on. So by the time you come to third or fourth year of ESOP expense recognition in P&L, they sort of taper down substantially. So going forward, basis, whatever fresh ESOP allocations are done, these particular expenses will accordingly go up.
On advertising spends, last quarter, we spent about INR 6.5 crores. For the full year, we have budgeted around INR 60 crores or so. So as we get into future quarters, we could have certain branding advertising, digital will anyway continue. So there could be quarters where it could be lumpy in nature. Last quarter primarily was almost fully digital in nature.
Okay. That was very useful. Just a couple of additional questions. So on the...
Sir, sorry to interrupt you. There is a slight disturbance coming from your line.
Is it better now? I'm closer to the mic.
Sir, I think it's the AD sound coming from your line.
Okay. I don't know if I'm audible or not, but...
Vivek, it's okay. Please go ahead.
Yes. The other question I had is with respect to your traffic and the content enrichment. So it seems that you have added a lot of new listings in the current quarter, much more than what we have seen in the past. So if you can just give us some color on whether these new listings are helping you get any visibility on monetization? Is this part of your content enrichment strategy or was it related to any sort of pent-up or catch-up as far as COVID is concerned? That's one. Second is on the A&P, you said that most of that A&P was on digital. So I'm getting that some of the traffic that you brought in the previous quarter would include inorganic traffic also. Can you help us understand your traffic better and the trajectory?
So firstly, on content enrichment. So you're right, we added about 900,000 listings to our database. As I have mentioned in the past as well, see, India overall has about 70 million to 80 million SMEs out there. And we, despite being the largest local search engine, we cover only, say, [ 40% ] of the population at this point of time.
In last 3, 4 quarters, the addition of fresh listings was relatively lower, there was more focus on enriching content in existing listings. And before that, if you would see, we were adding about 1 million listings every quarter for a good 8 to 10 quarters. So this particular quarter, again, we are focused on broadening our coverage. And once we add listings, obviously, those particular listings start getting prospected by our sales team and over time that aids monetization as well.
It is difficult to say whether listings that got added this particular quarter are directly aiding monetization.
To your other question on advertising spend. So yes, there is a -- there was some particular paid traffic that came during this particular quarter. So out of about 145 million users, approximately, I think, around 15% or so would be from paid means and rest is coming organically.
Thank you. The next question is from the line of Pranav Kshatriya from Edelweiss.
My first question is that we've seen a very strong employee addition in this quarter. But if I look at the revenue productivity or the collection productivity, it seems to be significantly lower than what we had pre-COVID level. So should we expect that pre-COVID level productivity to be achieved in the next 2 to 3 quarters? Or it could take longer? Or we should assume lower productivity of this workforce?
Okay. Pranav. So first of all, we need to understand on which particular metric are we measuring productivity? The 2 metrics that you mentioned, revenue and collection. So firstly, coming to revenues of INR 185 crores. So INR 185 crore revenue is getting recognized in P&L from customers whom I had sold in last 3 to 4 quarters when my sales strength was not that higher. So as a result, this particular revenue divided by number of employees will not be the right indicator because this particular revenue is not really the revenue achieved by current sales force.
Second, as far as collections are concerned, collections of INR 200 crores, while they are better than revenues, they are relatively lower currently because a lot of customers are getting signed upon monthly payment plans, where upfront collections is lower. The realistic metric which we look at it is, as I mentioned, the realizable value, which is the expected revenue that I expect to get from sign-ups that I did in this particular quarter, which stood at about INR 235 crores to INR 240 crores. So that particular INR 235 crores is what I will likely get over the next 1 year from sales done by my existing sales force in the last 1 quarter. So that will be a more relevant metric.
Considering we had about, I think, 10,000-odd employees at our peak pre-COVID, and now we have about 10,600 something in sales. So productivity is slightly still lower, but considering additions have happened in last 3 to 4 months, in next 2 to 3 months, these particular employees will likely start getting us even better productivity.
For example, against INR 235 crores of realizable value for the quarter, my exit run rate was about 250 plus. So that way, we are on a month-on-month improving trajectory.
And if I look at the contribution of the monthly payment plan to the revenue, how much will that be?
Contribution of -- so contribution...
70% [indiscernible] is the number of customers, right?
70% of customers that I signed up in this particular quarter came on monthly payment plans. If I were to look at distribution of my overall active campaigns of 485,000, there, approximately 40% are on monthly plans and 60% on upfront plans. As we keep going into future quarters, that 40% will keep moving up. That 40% was 32% in March quarter -- at March quarter end.
Sure. So do you see any challenges in reaching to the pre-COVID margin? I mean we were consistently 25%, plus/minus 2% kind of range. So is that the margin possible in the next few quarters? Or there are certain headwinds to it?
So definitely, once we reach that kind of pre-COVID top line, I think we should be reaching those kind of margin levels. Currently, margins are lower because there is a sort of mismatch between revenue recognition and salary expenses.
So I think once we reach that INR 230 crore to INR 240 crore range, whatever incremental revenues will come in from current levels versus that pre-COVID level, a good chunk of that should directly flow to EBITDA.
And should we assume the salary levels to be higher than what pre-COVID level was? Or we can actually go to that level?
Yes. Salary levels would be definitely higher, a couple of reasons. One, basis, regular increments -- over the last 2 years, salary levels have gone up. Second, every state keeps coming up with the revised reach levels for either minimum wages or other statutory compliances. So basis that, there is obviously an increase in wage level versus pre-COVID.
Okay. Last question from my side. Any comments regarding the synergies with the parent and how you are working together to build any business or anything which you can tell us?
So as far as synergies with RRVL are concerned, we currently are sort of looking at our business in 2 buckets. One is the core search business where the endeavor is to get it back to pre-COVID levels of top line and profitability, ASAP, and there's a clear visibility on the same already.
And then the second bucket is to add a transactional layer on the local search platform that we have. So on the second side, where there is good expertise of RRVL as well, we are working closely with them. So one of the products which is a hyper local marketplace, we are already -- we have already rolled out a pilot for users in 3 cities: Mumbai, Bangalore, Hyderabad for certain categories such as electronics, mobile, et cetera. So we are working very closely with them on those particular projects.
Okay. And do you think that ONDC can be of enabler or a challenge for you in any way?
So once that particular ONDC gets implemented, we'll have to see since we are just rolling out these transactional services. We'll have to see how it pans out.
Next question is from the line of [ Ankur Jain ], an individual investor.
Good evening, everyone. I have 2 questions. One, even before Reliance Ventures, Reliance Retail came into picture into Just Dial. I've been an investor into Just Dial based on what I was hearing about JD Mart and the B2B transactions thing. I think you just explained that you also look at your business into 2 buckets. You look at the surge, the traditional business and then the value that you try to derive from those clients that you get through search in your B2B business or something.
But it's been at least 7 quarters, if not more. And you had pilots in 3 cities you mentioned, it is highly disappointing to note that your investor deck contains no information at all on any of such disclosures on the 2 segments. [ Ideally, ] you are actually looking at 2 segments even as per the accounting standards, you have to be reporting about those 2 segments. I mean, you may choose to say that no, we don't, but internally, you're very well aware that you have to, but you don't. So I would like to pick your thoughts on that.
Because as an individual investor, I find it disheartening. I put in my valuable money into it, a lot of money based on the story, but I don't get to hear an update on that story. That story is in some closed doors. Obviously, not everything can be opened, but there is some responsibility that the business has toward the minority shareholders. So that's one.
Number two, if I heard correctly, you said your mark-to-market losses is about INR 48 crores if I heard correctly. And also your loss for the quarter is about INR 48 crores. So if the both the numbers are same, are we saying that we actually did not make any [ money in ] this quarter? This was just a breakeven quarter? So these are 2 questions I have.
[ Ankur ], so a quick clarification on the second point first. So mark-to-market loss during the quarter was about INR 60 crores and INR 48 crores was lot -- loss at quarter level. So excluding other income, the overall profit was about INR 12 crores, INR 12.5 crores.
No, I thought that even the -- sorry to interrupt you, but even the mark-to-market would be adjusted for [ tax loan ]. So that's what I thought.
So mark-to-market would be adjusted for tax, but that tax essentially would be reversal of past wins that we would have recognized.
Right. Right. Absolutely. So it will be closer to 48%. If I look at it, maybe 20%, 25% tax rate. But anyway, I leave that gap.
Right. So coming to your first question on -- regarding looking at the business in 2 buckets and relevant disclosures for the same. So firstly, see, JD Mart, the monetization model is subscription-based listings itself. At this point of time, out of the total unique users that we had for last quarter, about 8% to 9% of those particular users came for JD Mart related new pages.
Why I'm referring to new pages because as part of JD Mart, what we have done is we have essentially brought products on our platform, though listings we already had. Earlier, about 20%, 22% of our revenues used to come from B2B related categories. At this point of time, from last quarter, that number stood at about 25.5%, 26%.
On JD Mart, the dedicated team, which works on monetization for the same is now about 650 people, which previous quarter was about 400 people. So considering JD Mart's particular monetization works as a listing [ fee itself ] and JD Mart products are available on both JD and JD Mart platform. So that obviously gets recognized as overall revenue.
The key is that this particular platform's monetization should aid us with revenue growth, which is happening at this point of time as can be seen [indiscernible]. As far as the transaction...
No, I'm more worried about the disclosure about it. If you see your stock has taken a beating of more than 50% from its peak. Well, in this scenario, every stock has taken a beating, but some have taken more than the others. And you obviously belong to the more category. So there needs to be some introspection and some responsibility shown towards the investors, who are not sitting in the board, discussing some secretive things. There is so much cash in the balance sheet. And for 8 quarters, we're having the same story. So obviously, there needs to be something shared with us.
So you are right. But please understand that as management, we obviously cannot simply control what happens to our stock prices. Yes, operating performance is fully in our hands, which is what we are working on. And I think if we continue to deliver numbers both on top line profitability as well as new initiatives, this particular current gap should ideally get bridged in coming quarters.
As far as disclosures, et cetera are concerned, so feedback taken, whatever is relevant, which we should disclose, we will continue to do so.
Yes. So correct. You cannot control the price, but maybe the introspection means that because of your silence, your complete secrecy, if I may use that word, the stock has taken a beating and people are not believing the story any longer. So that's what I meant. And obviously, I'm not asking you to control the price, which you cannot obviously...
The next question is from the line of Naman Jain, an individual investor.
So Abhishek, I just wanted to ask a small question as to -- for the pilot launch of JD Shopping, right? So that there are key categories broadly where you guys have launched products, mobiles, electronics and home and kitchen products. So how are we planning to -- what are the initial feedbacks? And what is the plan to scale it up? How long are we going to take?
So Naman, on JD shopping, as you rightly said, 3 particular categories have been launched. At this point of time, vendors are being onboarded in each of these categories. The key USP that we are working right now is that for our delivery and basis, whatever pilot orders we have been receiving in almost 98%, 99% of the cases, we are able to achieve the same.
Over next 2 to 3 quarters, endeavor is to broaden product selection across other categories and also onboard vendors in other cities as well. So we are already in the process of adding 3 more cities and on a month-on-month basis. So sometime by the end of this particular fiscal year, the product selection catalog and number of cities should be meaningful. The target is to cover almost all metros by then.
Okay. And so on the last call, we discussed about are we going to give accounts from the cash that we have. And it was clearly mentioned that we are not in the business of giving -- attracting a customer by giving discounts. So now in these categories, 3 categories, I can see there are some discounts offered. So just a clarification, are these from the merchant's ends? Or is this -- our company giving discounts on the products?
So whatever discounts that you see in the platform are solely from the merchant's end, while we have advertising budget. So this is the way you look at advertising the customer acquisition cost. So in case, we think that for certain categories where we have decent margins, we cannot afford to pass on a part of that margins back to consumers, we would look to do so. The discounts that you see currently at this point of time, they are fully borne by merchants.
Okay. So in that case, then again, 2 things and 1 is that you have allotted a large advertising budget in this year. So how are we planning to -- are we going to do TV commercials for JD Shopping specifically? Because I understand the core business anywhere is doing very well, and we are getting back on track. Since this is a new launch, are we planning to do majority of our spending on this advertising spending?
So advertising budget that I mentioned, majority of that is planned for core business itself, for JD Shopping. The thought process is unless there is a substantial pan-India coverage and cross category coverage, we would mainly focus on digital advertising because via digital, you can target specific categories, specific geographies. Once we have desired user experience in place, et cetera, then obviously, ATL campaigns will follow.
Okay. And what is the targeted or a vision to how much transactions per month do you want to reach in JD Shopping? And in some vision that may help us understand the prospect of the opportunity?
See, this particular segment per se has a huge opportunity in terms of there is no pure-play 3P marketplace currently. All SMEs dealing in products want online presence to get new customers, et cetera. So I won't put specific numbers in terms of what the ambitions are. I think on a month-on-month basis, we want to see that we keep improving, both the user experience side, fulfillment side. And then over the next few quarters, we will see how numbers, et cetera, pan out.
Okay. So -- and just one more thing on this. What is going to be the plan to monetize this? Basically, is this going to be commission based on each product that we are going to make money? Or is it going to be a subscription-based model because from other competitors, I understand it is more of a commission-based business.
So at this point of time, we are signing up merchants on a commission-based model itself. Once we have substantial traffic, then other streams of revenue such as advertising, et cetera, too can form part of revenues in this particular vertical as well.
Okay. So it is not going to be like our core [ search ] business where we have a monthly plan or something like that, it's not going to be the same for JD Shopping unit?
No, this will be purely a commission on every transaction.
Order? Okay. Okay. And just 1 small question on the cash balance that we have. So what are we planning to do with that? Because obviously, it's a large balance that we have. Any plans to distribute it or use it for buyback or something?
So no such plans at this point of time. We have exciting products in pipeline, we would want to spend on building those particular products, content enrichment, advertising those particular products in future. The good part is we have a core business in place, which is a healthy free cash flow generating business. So we'll see after maybe 12 to 18 months, how the situation is. At this point of time, we think our core business itself should be able to fund a good chunk of these particular new initiatives.
Initiatives. Yes, which is why I'm asking you the question. So if your core business is able to support all these initiatives, why not -- why deploy cash at such lower returns? Why not pass it on to investors or do something better of it?
So some of the new projects that we have undertaken tend to be long gestation projects. There could be a situation where we think that an aggressive advertising plan could help us scale exponentially. So we don't want to -- we want to be in a situation that we can comfortably take those decisions with cash on our balance sheet.
Okay. And just one small feedback. So I think it is also what to do with the previous participant who had asked the question. I think what is needed from the company is like you did your pilot launch in 3 cities, if there could be some small press release or something to at least keep the investors updated. Because even I had asked in the last call, when is the launch going to happen and you mentioned in the last -- first half sort of -- end of the first quarter on -- or maybe the beginning of the second quarter. It did happen then, but I had to go to the app and check whether it has been done. A small press release of the updates that are happening in the company would really help keep information flow regularly to the investors.
So definitely we'll do so. In this particular case, simply the [indiscernible]. We launched this particular product with a few sort of vendors onboarded. So we are on a day-to-day basis onboarding more vendors and expanding the catalog. So the thought process was once we reach a certain critical mark such that people are able to search for products in their relevant cities, it will be more prudent at that particular point of time to put out a public disclosure.
Okay. And just one small clarification. So I tried ordering some products from JD Shopping. But hyperlocal, really, I thought was that it should be delivered in about 3 to 4 hours. But to me, on the [ rapid short ], it will be delivered by 3:00 p.m. on the next day. So it's not really hyperlocal in that sense, right?
Okay. So currently, in these particular 3 cities, there are certain pin codes where we are able to achieve that particular 4-hour time frame. There are other pin codes, where we are still onboarding vendors. Once we have vendors in this particular category in each particular pin codes, ultimately, we'll have that 3- to 4-hour delivery in each pin code.
The incident that you mentioned is the exact reason that we have not been putting out a public disclosure saying that this is live. So while the platform is live to gather feedback from users who are using it, at the same time, there is a content expansion that is underway.
Hope we see the operating revenue improving with the bottom line.
Next question is from the line of Vivekanand from AMBIT.
Abhishek, can you give us some color on the cash operating costs that you foresee -- the inflation that you foresee in fiscal '23 and '24 for the cash operating costs? And secondly, could you comment on the operating margins of the company if you hadn't been investing in these multiple new initiatives, [indiscernible]?
So firstly, on cash operating costs escalation in FY '23, '24, difficult to say. Having said that, I think on the employee expenses, clearly, with overall inflation being quite high 7% to 8% on an overall basis, definitely needs to be rolled out. Similar could be for other expenses.
On your second query regarding these new initiatives, so new initiatives about INR 12 crores to INR 13 crores of spends are actually capitalized as assets under development. So since these particular products are still in the building stage, these particular costs don't hit our P&L at this point of time.
And that's useful. Could you also comment on what portion of the new initiatives in investments are hitting the P&L? Or is it entirely going into the assets under development?
So entirely it sits under development for new transaction-related initiatives.
Okay. And -- but the JD Mart costs are in the P&L, right?
Yes, they are already in the P&L. Yes, they are completely in P&L, simply because there the revenue model is a listing fees and the product had been obviously launched long time back.
And just to recount the new initiatives, apart from JD Mart, which is already hitting the P&L because you have launched the product. JD Shopping, Jd Xperts, and I think there were some products on the real estate side, right? Am I missing something?
So yes, primarily these particular products, JD Shopping, Jd Xperts. So basically, product-related transactions from part of Shopping, services-related transactions from part of Xperts.
Next question is from the line of Vijit Jain from Citi.
Vijit, may I request to unmute your microphone from your side, please. Vijit, may I request to unmute your line, please.
Due to no response, we move on to the next participant.
Next question is from the line of Anmol Garg from DAM Capital.
Abhishek, just have a few questions. Firstly, if you can split the advertisement cost during the quarter between the paid campaigns and the brand-related advertisements, that would be great.
So out of the INR 6.5 crores that we spent, almost about INR 5.5 crores to INR 6 crores went as part of digital initiatives.
Sure. And secondly, if you can also give your views that if you are planning to do any acquisition related to -- in the JD Mart space, particularly to acquire more customers or to have more value-added services.
No, there aren't any such thoughts on acquisition as of now.
Sure. And thirdly, just wanted to ask that, lastly, what would be the average realization of JD Mart right now? And how many will be the paid suppliers in the category. And in continuation with the same, has there been any increase in the customer acquisition cost from, right now as compared to a year back. Yes, that's it from my end.
So average realization for JD Mart or B2B-related campaigns would broadly be in the range of about INR 20,000 per campaign on an annual basis. And regarding your question around the customer acquisition cost, so customer acquisition cost currently is -- would be a bit higher versus what it was last year due to higher salary levels.
But as and when the current batch of sales team achieves desired productivity once they get tenured, I think our particular cost of sales will be at par with what it was 1 or 2 years ago.
Sure. And if you can also give the paid supplier numbers in JD Mart?
So paid suppliers, there broadly would be closer to about, I think, 100,000 or so.
The next question is from the line of [ Abhishek Banerjee ] from ICICI Securities.
Abhishek, thanks for presentation. I'm relatively new to the company. So [indiscernible] basic questions. First of all, I'll start with the ad spend part. So what [indiscernible] for the full year? I missed that number.
About INR 60 crores.
Okay. INR 60 crores this full year, and this would include your digital initiatives, which is giving some offers or [indiscernible].
No. So this particular INR 60 crores does not include any customer acquisition cost or advertising spends for new initiatives. So this INR 60 crores we have, at this point of time, amounts for core business itself.
Okay. Right. Just now moving to what you spoke about monthly subscription plans. Could you please explain what is the rationale for it? I mean, did you see any liquidity concerns with your supplier base?
So Abhishek, what typically happens is, so Just Dial sell this listing [ win ] 2 payment plans, either you could pay upfront or monthly payment plan. So for example, you could either pay INR 4,000 down payment and sign a mandate, which allows us to charge you INR 2,000 per month on your bank account or you could directly pay as a annual subscription of INR 22,000.
Now post COVID or during COVID, what has happened is some of the customers might be averse to actually selling out the entire INR 22,000 upfront. So we thought that, okay, for us, it is important to sign up customers, once they sign up, once they take the services, definitely, they would be willing to stick around for a longer period of time. Plus, the ecosystem is also evolving in a manner that everything is being sold on EMI plan, monthly installment plans. So that is what has made us gravitate towards monthly plans and which so far is working out pretty well.
No, absolutely [indiscernible] seeing that for the person who is going with the monthly plan, they are actually paying INR 20,000 to you in a year -- so that's -- yes.
Over time, over a period of 9 to 10 months, they would end up in that particular amount.
Got it. And what is the retention level, I mean so-called customer who is going with monthly plan. So what is the average realization you're getting from them end of year?
So average realization that we get from our monthly customer is very similar to what we would get from upfront customer. So last quarter, whatever we sold on monthly plans, approximately 20,000 -- 19,500, 20,000 annually likely to be the annual realization.
So what happens is in a monthly plan, my ticket size tends to be slightly higher. So upfront plan might be, say, INR 21,000, INR 22,000 for the year. But in a monthly payment plan, I am able to get them to sign up at INR 2,000 a month, which effectively is INR 24,000 for the year. So even if the customer does not honor full payment or honors for, say, 9 to 10 months, I still end up getting INR 20,000, INR 21,000.
Got it. But -- I mean is there a time value of money what does that come to? Is it coming a little lower?
Not really. So in fact, in this particular case, whatever are our particular monthly plans, they tend to be perpetual in nature. So they get auto renewed at the end of each year. So even today, we have certain customers who signed up on monthly payment plans 5 years, 7 years ago. And in fact, there is a zero cost of sales in those particular plans. So the time value of money relatively is not a factor -- a significant factor in this.
Got it. But -- so kind of slightly different [indiscernible]. So what was the annual plan cost seen a couple of years back, has that increased over year...?
Annual -- sorry?
So the annual subscription costs that you were talking about. How -- what would be the inflation in that over the last 3, 4 years?
So we -- during COVID times, we had actually rolled out certain discounts to customers. So the first thing that we did in the month of October, November was withdraw all those particular discounts.
Our pricing varies by geography, pricing varies by category. Pre-COVID, if you see our realizations used to be at the peak was about INR 18,000 per campaign annually. Right now, while the P&L realization would be lower because P&L revenues, as I mentioned, are lower. But the realization that I'm getting from customers that I'm signing up right now is ballpark in the range of about INR 19,500, INR 20,000.
So there has been about 8% to 10% increase versus my pre-COVID peak levels.
That's really [indiscernible] But -- see, the reason why I was asking this is that while on a yearly basis when you're asked to make a payment, is actually easier to pass on inflation, whereas if you are going on a monthly basis, [indiscernible] right? And if you need to increase that to [indiscernible] 2,500, that would require a customer approval and [indiscernible], which might be a little bit of a question mark, which is what I'm just trying to understand...
So there also, it is not necessary that you need customer approval in the sense that yes, you need a customer approval, but it is -- but if the limit on the previous mandate is higher, so for example, versus a INR 2,000 per month plan, if the limit set is INR 3,000 per month, you can actually build post customer consent for a higher value.
And right now also, there are 30% customers that come on upfront payment plans. Monthly payment plans are lucrative to get a new customer into the ecosystem. And thereafter, once customers are satisfied with the services, want to take a higher value plan. A good chunk of them want to opt for upfront plans. Their renewals obviously happened with inflation building.
Understood. Very clear. So is there any way of passing on this thing to [indiscernible] taking a loan now in that sense? Can [indiscernible] have you done that in any way?
So we provide various payment modes, for example, payment mode is EMI on your credit card, EMI on your debit card. In fact, those plans work in a manner that customer has to say on a monthly basis to their respective bank or credit card, whereas we get the money upfront.
There, in fact, we incentivized by bearing that particular interest component. So we tell the customer that you will anyway pay INR 2,000 per month on your credit card. And we are -- you don't have to pay any extra interest. As [indiscernible] the benefit we get is, we get the entire, whatever, INR 22,000, INR 24,000 less whatever is the interest upfront.
So all those particular payment plans are being made available to our customers.
And that is accounted for in the 70% or it's in the 30%?
I counted in 30% because I got the money upfront.
Okay, sir. That was very helpful. Now moving to the new initiatives. Will it be possible -- will it be possible for you to share any of the take rates for JD Shopping and Jd Xperts?
So JD Shopping take rates got the -- should be -- like it will vary by category, but overall, it should be in the range of, I think 7% to 8%, depending on certain categories such as mobile phones could be lower, whereas categories such as apparel, et cetera, would be higher. And in case in future unbranded products come in there, obviously, take rates would be higher. And on the services side, it is typically in the range of around 20% or so.
So in terms of services that you are providing, what are the touch points that you're interacting with the customer side and what are the touch points -- what are the services that you are helping your suppliers with?
So while the vendors are onboarded, they are given proper kits, et cetera, at the time of onboarding. We have also started some bit of training also for these particular vendors. They go through complete SOPs that they need to follow while fulfilling orders that are passed to them.
As far as a user is concerned, we keep them completely aware of when is the vendor likely to arrive in case of any delays or any rescheduling, et cetera, there are particular either that automatically gets done via the app or there is a team that proactively reaches out and does that.
So whatever a user and a vendor need to do or need to be assisted in order to fulfill that particular transaction, either that is done in an automated manner by the platform or if the automated staff is not able to assist them, then there is a manual intervention that takes place.
Okay. So this you are obviously talking about JD Services, right?
Yes.
So see, vis-a-vis somebody [indiscernible] what proportion of the services that [indiscernible] gives, would you be [indiscernible] total.
Proportion in terms of number of services or how?
No, no. I'm talking about, say -- if say, I want [indiscernible] and if I'm, say, ordering on [indiscernible] if I'm ordering on Jd Xperts, what are the services that [indiscernible] company be more than what you are giving or same?
So in my assessment, the services would be almost the same because there is a standardized tariff card for each particular service. You will be as a user in form freehand, which particular provider will come to fulfill that particular transaction. You will have similar options for payment. The key lies in what other value-add services that we can provide.
So mainly the idea is that earlier, users were calling up these particular professionals, then negotiating a tariff or a rate at their particular doorstep. Now everything is done by a click of a button with free information to both the user and the vendor, how much needs to be charged? And once the transaction is concluded, user can pay via cash on the spot or pay online and all those particular features are in place.
Got it. So how many services do you have on Jd Xperts right now?
Currently, 8 categories are live.
And how many do you foresee in the near term?
So 8 would probably go to around, I think, 10 to 12 categories. We'll keep taking a look, basis, the idea will be to sort of master the existing set of categories first.
Got it. And this is my last question on JD Shopping. You have mentioned 7% to 8% take rate. So for that, do you help in order fulfillment in any way?
So we have tied up with third-party logistics service providers. Essentially, we are a marketplace where vendors are listed. The logistics is also third party. And this particular platform connects those particular users with sellers. So user places an order, seller is informed, seller keeps the product ready, the third-party logistics provider goes and picks up the product and deliver it to the user.
Okay. And the money is [indiscernible]?
[indiscernible] account. And once the time line for returns or refunds are over, then it is released to the merchant.
Got it. But you have no...
Mr. [ Banerjee ], sorry to interrupt you.
I'm so sorry. I think I'm done.
The next question is from the line of [ Arjun Ashar ], individual investor.
I wanted to ask how long will you be in the content engagement...
[Audio Gap]
The line for the participant dropped. We move to the next participant. The next question is from the line of Swapnil from JM Financial.
So Abhishek, I just wanted to understand your strategy change. So last year, same period, I think we have spent a lot in -- during the IPL to promote our B2B JD Mart business. This year, we have added -- the last 2, 3 quarters, we have significantly ramped up our sales team. And I think basis the numbers that you shared, you have been able to -- you have seen significant traction in your JD Mart business or the B2B side of it. Will that be fair to say that your sales team is more -- been able to deliver better results compared to the advertising spends that we did last year?
So Swapnil, the advertising spend that we did almost at the same time, we got hit with the second wave of COVID, which further impacted SMEs across B2C, B2B segments.
The last 2 to 3 quarters, we have spent time in terms of fine-tuning our pricing or sort of withdrawing all sort of discounts, ramping up our sales force. So both B2C and B2B are coming back on track. But with the increasing proportion of B2B and dedicated focus via 600-plus B2B monetization team, definitely, these particular categories are giving better revenues.
Okay. And second is the question. So we used to have around [indiscernible] campaigns pre-COVID that dropped to around 430,000 sometime in the second quarter last year. Now out of this mortality that we are seeing roughly 100,000-odd, how much have we been able to recover back or how much is pending? Can you give some sense on that?
So currently, we are at about 485,000 campaigns. So half of the drop is sort of covered. And the endeavor is that we should exit the year at our -- closer to our peak campaign counts. So last quarter itself, we have added about 45,000 campaigns.
Actually, my question was from the [ perspective like ] of the 100,000 that went out of the system, right? How many are part of that 45,000 that you added in the last 2 quarters? And what is the potential recovery that we can think about beyond the new additions that you might have seen?
See, we are dealing with the small and medium businesses, where what happens is a particular business might be -- or a particular person might be doing a certain XYZ business 2 years ago. Later, they might be doing some other business, and they might be advertising with us at both time periods.
So we do not directly look at it as -- or it is not possible for us to look at it as -- that 100,000, which actually went out or did not renew, how many of them have come back. In any case, in case of Just Dial, even if a customer has not renewed, be it pre-COVID period or current period whatever it is, it does not mean that the customer has gone away forever.
So the way Just Dial has an advertising budget, for example, FY '19, we spent about INR 65 crores. Next year, COVID year, we spent only INR 6.5 crores. Then again, we spent about INR 65 crores last year. So that will be a sort of similar behavior for SMEs also. Whenever they are comfortable to advertise for their particular business, they would come and see whichever platforms they want to advertise. And there could be periods way they may not want to do so. So the way we evaluate is what is the total current number of active campaigns that we have.
Okay. And given that we did 20,000 -- 22,000 additions this quarter, do you think we will be able to sustain such additions in the forthcoming quarters also? Typically, what -- if I go historically, so one good quarter is followed by some subdued numbers in the following quarters, but it's been 2 consecutive strong quarters that we had, how do you think about the forthcoming quarters?
So as I said that the last particular quarter, considering exit run rate was better versus full quarter. That sort of gives us assurance that some of these particular trends should keep improving on a month-on-month basis. And if we are thinking that we want to exit the year at peak campaign run rate, then definitely our healthy quarter-on-quarter campaign addition is what we ideally foresee.
All right. And just a last question. So you mentioned INR 60 crores of budget for core business A&P. How can we think about the noncore business investments that you're thinking about? Like how much should we factor in or any sense of guidance on that?
So that, I think we are still working out that once these particular products are in our decent stage to be advertised, both on digital and subsequently ATL. I think we will have to wait for another probably a quarter or so before we can sort of have some clarity on how much spends we are likely to do on those initiatives.
The next question is from the line of [indiscernible] from Ashika Group.
Hello?
Go ahead, sir. You're audible.
Sir, I would like to have some clarification on the plan of parent entity with respect to JD's platform, whether the JD platform will be integrated to the JioMart or any other application of parent entity?
[indiscernible], yes, there can definitely be synergies or integrations. So we are sort of in touch with them, for example, on our particular platform, we have already integrated access for Jio SIM cards. Similarly, Just Dial apps could get integrated with My Jio application, which already has access to multiple other RIL Group applications. So some of those particular integrations are already being discussed.
Sir, you were just explaining us with respect to the logistics third-party delivery partners. So can we understand, is it like the RIL's logistic company has been used by the Just Dial for providing the services?
No, these are completely whatever third-party services such as Dunzo, Grab, Shipyaari and whatever other logistics service providers that are out there, who do e-commerce fulfillment for various companies.
Ladies and gentlemen, we'll take the last question from the line of [ Arjun Ashar ], an individual investor.
If I'm audible now, I wanted to know how long will we be in the pilot phase for the first [indiscernible] for JD Shopping and Jd Xperts in terms of content and enrichment so that we have gone wide as well as deep in various categories of contents being listed on the -- on the app.
So in terms of JD Shopping, that went live for users just about, I think, 1 month ago, and we are already in the process of adding more cities. So current quarter, it would get added. As far as Xperts is concerned, those current set of services are already live in about 10 to 11 cities.
No, I just illustrated -- so for instance, is it a store like Benzer or [indiscernible] on JD Shopping. I see only a few categories like in Benzer, we just had shopping bags, whereas it's an entire superstore or if I look up any local hardware store, when do I reach a stage where I can find at least 100 to 150 SKUs of that hardware stores listed on JD Shopping? When do we reach that stage?
So I think it will take around 6 to 9 months for us to reach that particular stage where there is a reasonably broad selection of products and available across all major pin codes and top metros.
And what will be our strategy to funnel users to these listings because right now, there is no awareness. If I want to buy [indiscernible], many don't know that there is an option like that. And then what happens is that our customers also don't have an [indiscernible] their entire catalog of inventory on JD Shopping, it becomes a [indiscernible] of situation. So what is our strategy to attract users to the website and app?
So a couple of things. One, these particular products and these particular vendors will have access via our particular homepage on existing platforms. So from the Shop Online section, users can explore these particular products. Second, there is already a traffic that comes organically, searching for these particular listings. So once users come for these particular listings, they get to see that, okay, there are transactions or shopping enabled.
Third, there will be dedicated apps also for these particular initiatives. And once we start advertising, that is how users will basically get to know that -- more users will get to know that these particular optionalities exist, and that is how product will get [ scaled up ].
Okay. And the advertising will be like national campaigns, or will it be, again, hyperlocal advertising campaigns like [indiscernible] and all that, like how Paytm used to have these [indiscernible]?
So in the first phase, it will be digital in nature because that will help us to target certain geographies, certain categories of products. Once we have a decent selection and more geographies covered, then it will be a ATL campaign. Thereafter, then it can be a mix of hyperlocal marketing. I mean there will be annual budget, part of which will go towards branding advertising and part of it will go towards digital other sorts of hyperlocal advertising.
Ladies and gentlemen, that was the last question. I will now hand the conference over to Mr. Abhishek Bansal for closing comments.
Thank you, everyone, for joining us. In case you have any further queries, please do reach out. We will do our best to address. That's it from our side. Thank you.
Thank you, sir. Ladies and gentlemen, on behalf of Just Dial Limited, that concludes today's session. Thank you for your participation. You may now click on the exit meeting to disconnect. Thank you.