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Just Dial Ltd
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Ladies and gentlemen, good day, and welcome to Just Dial Limited Q2 FY '22 Earnings Conference Call, hosted by Nomura Financial Advisory and Securities. [Operator Instructions] Please note that this conference is begin recorded.I now hand the conference over to Mr. Siddhartha Bera from Nomura Financial Advisory and Securities. Thank you, and over to you, sir.
Yes. Good morning. Good evening, everyone. On behalf of Nomura, I would like to thank the management of Just Dial for giving us an opportunity to host this earnings call. To take us through the Q2 FY '22 results and to answer our questions, we have with us Mr. Abhishek Bansal, Chief Financial Officer of Just Dial. Unfortunately, Mr. VSS Mani, Founder, is not able to join due to some unavoidable circumstances.So we -- I will now hand over the call to Abhishek for his opening remarks and presentation. Over to you, Abhishek.
Thank you, Siddharth. Hi, everyone. Welcome to Just Dial's earnings call for second quarter of fiscal '22. Before we discuss quarterly results, I shall share a quick update on our strategic partnership with Reliance Group. Reliance Retail Ventures Limited, RRVL, has recently acquired controlling stake in Just Dial via multiple transactions for a total consideration of about INR 5,719 crores. They have infused INR 2,165 crores into the company via preferential allotment, acquired stake from promoters under a share purchase agreement and acquired further 26% stake via open offer from public shareholders. Consequently, RRVL currently holds about 67% stake in the company and overall Promoter Group shareholding stands at 77.7%.Coming to quarterly results. This quarter saw an impact in top line due to declining collections that we witnessed over past quarters, especially the last quarter, 1Q FY '22, which saw impact of COVID second wave. Our operating revenue for the quarter stood at about INR 156 crores, which declined 6.9% sequentially. Our deferred revenue stood at INR 334.2 crores, which was up 8.7% sequentially due to a sequential recovery in our collections.However, at this point of time, our monetization is still about 25% below pre-pandemic levels. But with COVID impact receding and SME business recovery likely to pick up pace, we believe our monetization too should pick up in coming months. Active paid campaigns stood at about 431,000 at the end of the quarter. On operating expenses, employee expenses saw about 11.9% Y-o-Y increase. Part of it is due to increments that we rolled out this year, which has not been done last year. Apart from that, we have started hiring talent across sales products, technology and content, our core functions to build strong teams as we plan for next leg of growth of JD.Other expenses had approximately INR 2 crores of advertising spend for the quarter. Ad spend should resume aggressively in few months as we roll out some of our pipeline products. Overall, adjusted EBITDA margin stood at 13.3% for the quarter. Other income stood at INR 35.6 crores, and overall, PAT stood at about INR 32.9 crores, witnessing a decline of about 30.5% on a year-on-year basis. Cash and investments stood at INR 3,773 crores as on 30th September, post INR 2,165 crores of preferential issue.Coming to operational highlights. Traffic recovered well sequentially and stood at about 150 million unique users for the quarter. Most of the traffic came organically. On strength of database, total listings now stand at about 31 million. We are working on several initiatives to augment our content, which will not only strengthen discovery of products and services on the platform. At the same time, a transactional layer shall be enabled across various categories.With this brief update, we shall now open the floor for questions. Thank you.
[Operator Instructions] The first question is from the line of Abhishek Bhandari from Macquarie.
I had 3 questions, Abhishek. First, you mentioned your monetization is running 25% below the pre-COVID level. So if you could guide us into by what time frame do you expect it to come back to a normal level, that would be helpful? Second is on your advertisement spend, while you have withdrawn from the second leg of IPL. But what would be the budgeted expenses for ads for the remaining quarters of this year?And thirdly, now that the transaction is closed, and I think your almost close to a month after the closure of the transaction and all the money is coming in. If you could update us about the reconstitution of Board, what is the strategy refresh the company is taking? And what will be the plan of aggressively in launching some of the pipeline products, including your JD Mart and Omni, that will be also?
Okay. Abhishek, so on your first question on monetization. So as far as time frame is concerned, see, a good percentage of our revenue comes from B2C service-oriented category and SMEs in these categories have been most impacted. But the way vaccination is panning out the way overall economy is recovering. We believe that from here on, this particular 25% gap that we have versus pre-pandemic levels. I think you say next about 3 to 4 months likely it should get bridged.We are already seeing signs of our sales team getting better traction with customers. So compared to first wave where recovery was gradual, I think post second wave, especially in coming few months, we should be able to bridge this particular gap.On advertising spend, so advertising spend in this particular quarter, they were negligible at about INR 2 crores. The overall thought process is that instead of looking just at an annual basis, we are going to calibrate our spend in line with the product rollout and other initiatives that we shall be undertaking going forward. For this particular year, I think ad spend should resume aggressively in fourth quarter of this year. So we have spent about whatever INR 55-odd crores during the first half. So second half, as and when we see time lines of our products, et cetera, we will decide to advertise during the fourth quarter. So it will be a mix of, again, digital versus mass media.On your question around reconstitution of Board. So RRVL has taken control of the company, including the Board with effect from 1st September. So the Board has already been reconstituted. So at this point of time, we have total 11 directors on road, out of which 6 have been recently appointed; 5 are non-independent and 1 independent director. We are in -- so the transaction concluded very recently, including the open offer.We are closely working with RRVL leadership team and our newly inducted board members on firming up our strategy, we are sort of reevaluating all aspects of our business. There are several exciting initiatives in pipeline. As and when we decide on how would we allocate our resources for each of these initiatives, which initiatives will be prioritized, et cetera, you will get to hear more details from us.So overall, the thought process is that JD has created a great asset in terms of 31 million listings, SME relationships being in place, a good network of e-Tail speed being present. How can we leverage all these in light of this particular partnership to take JD to the next level? So as and when we firm up our plans, which should be a very shortly over the next few weeks, we would be communicating our road map going forward.
The next question is from the line of Vivekanand S from AMBIT.
So I'll start with the bookkeeping question. Could you give us the rate of revenue by the geographies? And secondly, a similar split for campaign. My second question is on the product pipeline that you have. So would you prioritize promoting JD Mart or would you want to launch multiple new products, like you have discussed in your annual report, the JDXpert the sell-serve model for SME.How are you thinking about these new launches? Will they happen gradually, or will they happen in a flurry in the fourth quarter, as you mentioned, that the IPL is resumed then?
So Vivek, firstly on revenue split. So Tier 2, Tier 3 cities contributed about 56% by campaigns and about 35% to overall revenues. On your second question around product pipeline. So definitely, JD Mart is one of the key initiatives we have. We are currently thinking of seeing that how scope of JD Mart can even be expanded. So that is one thing that we are working on.Apart from that, on the B2C category side, the overall thought process is that while Just Dial has been a first destination, how can we take search to the more deeper engagement level in terms of either qualified leads in certain categories or in terms of enabling transactions across certain categories, we would be putting in dedicated teams for handling each of these categories.So as and when those particular products keep getting ready, they will get rolled out. Obviously, since there are so many categories, we'll have to prioritize that, okay, which are the key 3, 4 initiatives that we aggressively want to go after and which are some of the other initiatives, which will be rolled out over a period of time.
Okay. A couple of other questions, which I did not ask because it was getting too lengthy. So one of them is the JD app that is currently there. Has there been any discussion between your company and your platforms to integrate the JD app as far as the MyJio app or make it part of [indiscernible] apps at Reliance might be planning? So that's one.And secondly, historically, you have been very, very consistent in paying out dividends and returning cash. With the new board coming in, has that been discussed? And is there any difference in the approach towards returning cash that Just Dial will now do? Or should we continue expecting dividends from the company?
Okay. Firstly, on JD app being integrated, See, there has not been any specific discussion around, okay, whether JD app will be integrated with any Jio platform or any RRVL retail platform. The key discussions are around, okay, can -- what can JD leverage from strength that the RRVL or RIL Group brings in? What can they leverage out of the SME relationship and the effort that we have created? So there are thoughts being put around those particular items and whether that would ultimately require any integration, et cetera, that we'll see.On your question around dividend or return of capital. So you are right. I mean before this particular transaction; post-IPO had returned about INR 700 crores back to shareholders. At this point of time, the thought process is that we operate in a very sort of disruptive sector. And instead of thinking about, okay, how much cash should be returned, et cetera, clearly, the thought in the leadership team's mind is that how can we grow JD to the next level.Now that would require investments across various items, first of all, talent; second augmenting our content; third could be for any of the verticals that we may want to go deeper. There could be investments pertaining to fulfillment of services, et cetera; then fourth, obviously, is spends towards promoting or advertising those products.So firstly, capital would be allocated to all these. And then over a period of time, once we see that there is a sustainable growth path for JD 2.0. Thereafter, we shall think of, okay, how efficiently to return cash back to shareholders.So at this point of time, nutshell, I would say that thoughts are not at all on what should be mode of returning of cash, et cetera. The complete thought process is on, okay, what does JD need to do to get to the next leg of growth?
[Operator Instructions] The next question is from the line of Ruchi Burde from BOB Capital Markets.
Hi, Abhishek. I mean sticking on the previous question, there's a change in -- you sounded there's a change in the payout policy at JD. Similarly, would you say that now with the growth chase, profitability is now a secondary, I would say, target or thought process JD would like to prior type growth at this point of time? Would that be, I would say, good interpretation of a current state of strategy?
So my assessment so far, this is interaction with the RRVL team is that both JD and RRVL have a very similar thought process that any business that we run should have long-term unit economics, should have long-term profitability. So there might be investments that might be done in short term to bring that particular initiative to a particular sale. But that particular business should not be run with the thought process that we spend INR 100 to earn INR 80.So that particular DNA with JD has followed from day one, that will definitely be in place. But yes, we would no longer be any averse to making investments in short to medium term to make our initiatives a success.
Got it. Got it. And secondly, I mean, we heard you on the Board level changes. Has there been any talent or resources changes on the operational level or the executive team level?
So we have been inducting talent, so at senior leadership roles, the number of people we have hired in, say, last 6 to 9 months is probably far higher versus what we would have done in say, last 4 to 5 years. So we are inducting senior developers in our tech product teams then even on the marketing side, we have dedicated CMO in place with dedicated teams.JD Mart, there is a 150, 160-member team that is already in place. At the same time, for all other initiatives, the thought process is to have dedicated heads for each of these initiatives. So yes, there is a significant investment that is happening in on the talent side.Similarly, on content, which is one of the very key areas. There are certain 4 or 5 good senior hires that are expected to join us in the next couple of months.
Understood. Understood. My next question is regarding our paid campaigns. So is there any geographic queue towards where these are -- where we are losing or we lost a paying customer where we need to focus more to get them back or these are across the board?
So if I compare paid campaigns versus peak levels of pre-COVID. So definitely, the drop is higher in Tier 1 cities compared to Tier 2, Tier 3 cities. But one of the reasons, obviously, is also that Tier 1 tends to have a higher ticket size. So when B2C services business of SMEs got impacted, so high ticket size businesses tend to curtail their spends first. But with the economy coming back on track, I think we should be able to cover our loss ground even in Tier 1 cities.Plus, as I mentioned, some of the initiatives would be around adding a transactional layer in certain categories, where it may not necessarily be about chasing more number of customers. It could be about having certain few quality vendors fulfilling all the orders in those particular categories and overall revenue would be maximized from those few vendors itself.
The next question is from the line of Ameya Karambelkar from Kotak Investment Advisors.
A couple of questions from my side. Firstly, if you could help us with how you're looking at sequential recovery in the active paid campaigns panning out. And by when could it go back to the pre-pandemic level? And from a medium-term perspective, is there any kind of target or aspiration that you have for the number of paid campaigns? That's the first question.And the second is, as you look to aggressively invest in tech and sales employees, could we see a material increase in the employee expenses going ahead?
On your first question regarding sequential recovery in paid campaigns. So last quarter, paid campaign had a degrowth. One of the key reasons there was that due to COVID second wave impact, we could not have our feet on street aggressively meet customers. As a result of that, we focused on more of upfront payment contracts versus monthly payment contracts. Typically, historically, our average 30% of the customer sign up on monthly payment basis. But in last quarter, that was only around 9% to 10%.Now what that does is that if you are asking a customer to pay INR 22,000 upfront versus signing up on a INR 2,000 per month payment plan. There is a drop in number of customers that tend to sign up. Having said that, since you get upfront money, that is what gets reflected as higher deferred revenue.So despite drop in campaigns, you see a sequential increase in deferred revenues. From this particular month onwards, now since all employees are working from office are able to report to field, et cetera. We are going back to our strategy of aggressively signing up customers, be it on affordable monthly payment plans. So I personally see that recovery in paid campaigns should accelerate from here on. So before even the say, revenue goes back to pre-pandemic levels, I am hopeful that campaign should see recovery much faster.On your second question regarding investments in tech and corresponding increase in employee expenses. See a good chunk of our employee expenses is towards sales-related employees in -- on the tech side, while we are making investments, we'll have to see how that pans out. But we are clear that in case investment in tech product content, the results in increase in employee expenses for a certain period of time, so be it.As I said that we operate in a very disruptive sector. So there is no point converging -- conserving cash in bank with the thought process that employee expenses say should not grow up materially, et cetera. So the first thought process is that, okay, make investments, whatever are needed. And over a period of time, unit economics of those particular verticals will automatically take care of revenues, profitability, free cash flows et cetera.
That's helpful. Just one follow-up. If you could give some qualitative or quantitative color on how the traction on JD Mart timed out this quarter, that would be helpful?
So JD Mart, as I said that on the team front, we already have a team of about 150-odd employees in place. For B2B related categories, we always used to get a certain percentage of our traffic coming to JD platforms. Since JD has such a strong brand recall even today, JD results tend to get far more prominence versus JD Mart results.So JD's brand equity obviously is overpowering. I think it will take a few quarters. Ultimately, the thought process is that with this dedicated platform in place with the products being available on the platform, we via JD or JD Mart, the number of user coming to our platform should substantially increase. So we are seeing month-on-month increase in that. I think after a period of time once we have certain in critical marks in terms of traffic, we will be able to share those metrics separately as well.
The next question is from the line of Kapil from JM Financial.
Hi, Abhishek. Just one question on JD Mart platform again. So can you just help us understand like what is the monetization status of this? Like, have you started onboarding clients who pay for these services, JD Mart services? Or you are still in the running the trial campaigns that you are doing.Also, how many store fronts, B2B store fronts do you have now you used to have around 100,000 store front early pre-pandemic. How many do we have now? And how many are paid basically in that? And any update on the content that we were supposed to workload and make visible for the buyers. So those kind of metrics, if you can just share some detail on those.
So JD Mart monetization, as I said that right now, we are in the process of primarily training the team. So we have put this particular team in last about 30, 40 days itself. Our teams have already started reaching out to customers in these particular categories, primarily, say, manufacturers, distributors, wholesalers, in the first phase, trying to expect the importance of being present online, et cetera. I think in the next few months, monetization should start picking up.On B2B content side. So at this point of time, we have almost 1 million listings with the reasonably rich catalogs. So out of the total inwards of about 6.5 million to 7 million businesses, which are B2B in nature in about 1 million, 1.1 million faces, we do have reasonably rich catalogs on the platform.As far as paid customers are concerned. Paid customers on regular JD platform for B2B categories, so they from approximately about 20% of our paid campaigns. So approximately 85,000 would be existing paid campaigns for B2B-related categories.
Right. So the understanding is like JD Mart specific B2B has not started. So there's no monetization there, no paid suppliers there right now -- as of now?
So paid suppliers of B2B segment, which were present on Just Dial, they are getting priority visibility on JD Mart as well. So if you are a ball-bearing manufacturer and you are paying to JD. In that case, when you search for ball bearings on JD Mart, these particular paid customers products will rank on top. Ultimately, from a SMEs perspective, they do not care much whether they are getting a lead or visibility from JD or JD Mart.So from that particular perspective, those particular customers are getting priority on JD Mart also. But the key is that how do we quickly get incremental revenues from this particular initiative. That incremental revenue should start flowing in coming months with the new dedicated team we put in place.
Right. And any color on the transactional -- transactions and that you plan to initiate for some of the categories. So which are these target categories?
On the transaction side, one is like on the JD Mart platform itself, we would want transactions to ultimately happen. Then JDXperts, which is the on-demand home services, that is another category. Effectively, today, the way user behavior is changing that everyone wants to do activities or the click of a button. There are many categories which can ultimately become transaction-enabled for us the key question will be that whether how much scale can that particular category ultimately get. So whichever categories we believe have significant scale that can happen in coming years. Those we will try to shift towards transactional business model.
Okay. And would you also enable logistic services for this on your own or like?
So the way we see logistics is that in today's era, logistics is gradually becoming commoditized. So you have well-established players for hyper-local intracity intercity. To start with, we would tie up with some of these particular players for logistics services. Having said that, in case user experience warrants as to get deeper into logistics services as well, we could look at that option also.But as I see, there are multiple players out there, which at competitive rates are willing to fulfill any product deliveries, et cetera. So the first thought process will be to have these third parties fulfill these particular orders that will also help us have faster time to market for our initiatives.
The next question is from the line of Shivang Agarwal from Lake Water Advisors.
I have 2 questions...
Sorry to interrupt you Ms. Agarwal, we cannot hear you very well. Could you just speak a bit louder, come closer to the phone?
Can you know me now?
Better. But if can speak a bit louder, it will be fine.
I have 2 questions to you for today. My first question is, could you shed some light on the current status of the copyright infringement dispute of the first service in IndiaMART?And my second question is that the transactional services, which you just spoke about in the previous question, do you have a roadmap created for it for the future?
So on the first question regarding current status. So there are 2 parallel suits that are running, and those particular suits are ongoing. There has not been any material progress in either of the 2 litigations. Could you please repeat your second question regarding transactions?
So the second question is I asked was the transactional revenue, which you spoke about in the previous question. That the company is planning to take on the tenure on the basis of transactions on the JD Mart platform. So do you have not plan for this as to how it's going to happen in the future?
So on transactional revenue, the thought process is that JD Mart ultimately will have 3 sets of revenue streams. One will be the subscription revenue basically SME is getting visibility through the platform, and they are paying for it. It could be the tenure base subscriptions, or it could be pay-for-performance-based plans? Second stream of revenue would be certain percentage commission basis revenue.So at this point of time, we believe that JD Mart, especially on B2B categories will, to a great extent, be lead generation based, but ultimately, similar to the experience that China has been with Alibaba, there could be a good amount of transactions also that can start flowing in. So transactional revenue will result in commission revenues.And the third revenue stream the idea -- we want to have is certain revenues for add-on services. So for example, we are enabling logistics on the platform. So even if a transaction is not placed via JD Mart, and there is an SME who wants to ship their offline order via selecting logistics players on our platform, they could use that particular process.The reason for that particular SME to come to our platform to choose a logistics service will primarily be they get quotations across various logistics service providers, so they possibly would get better rates after their requirement. So the first and the third stream -- in the first subscription revenues, we are getting currently also as part of Just Dial endeavor is to grow those.And on the transaction base, there is a work going on in terms of not just enabling static digital catalogs, but also having vendors putting real-time prices, inventory status, et cetera. So once those items are in place, that is when we should see traction on transactional revenue streams for JD Mart.
The next question is from the line of Gaurav Rateria from Morgan Stanley.
I have a couple of questions. I'll go one by one. So firstly, is there any fundamental difference in the behavior of users coming via app or versus coming via mobile browser in terms of number of searches per day or per month? And does it even really matter from a monetization perspective because of stickiness?
So on app versus browser behavior. So far, the approach that we had taken was that we are sort of platform agnostic in terms of either user coming via app or whether user comes via browser. Having said that, any user who holds your particular app on their device, they are likely to be more sticky users, slightly more frequent users. So long term, yes, we would want to have our app installed in as many phones. But as I said, that considering a good chunk of Internet surfing happens via default browsers of devices. It is super important to have a browser experience being very similar to our app experience.
What would be the cost of driving an app download right now?
See, cost of driving an app download can vary substantially. So I mean you can get an app download for even INR 20, you can get the app downloads for INR 200. It is all about quality of users. So for example, in case you do any particular advertising campaign on any, say, gaming site, right? So maybe you will get very low-quality installs as far as your service is concerned. Any other gaming app might find that particular user to be a high-quality users.So there is no hard and fast rule to say that, okay, you can get app downloads at x rupees. It all depends on once you get an app download, how engaged that particular user would be.
Got it. Secondly, my understanding is that the churn for SME is increased quite a bit during the pandemic. Is it fair to say that the churn might have come down and now the gross addition of trade campaign had slowed because of lesser effort on sales and marketing, which now will pick up and that will lead to incremental paid campaigns? Any color on the churn rate, what it used to be pre-pandemic? What it that -- during the pandemic time and what it has come down to now?
So there, my assessment is that while churn in SMEs business might have increased, but ultimately, a particular SME, a particular entrepreneur, they would go back to doing some or the other business itself. So during these particular times of say COVID, et cetera, yes, they might have curtailed their spend on a platform such as Just Dial, which is what impacted our campaign. But going forward, all of those particular SMEs would come back doing some or the other business, possibly similar to what they were doing earlier. And as and when that happens, that should help us see recovery, both in our paid campaigns as well as our revenues.
Okay. And last question is on you specifically mentioned about investments on content fulfillment. So it will be very difficult, if you could elaborate a bit on what exactly those investments would be around content and fulfillments. And also on the technology side, right now, what would be our spend on technology as a percentage of revenues? And with the leasing up teams around technology and other things, what's the technology spend will look like in the coming years?
See, on content side, the thought process is that very ideally, we want to have digital catalogs enabled for all businesses on JD. So even if it's a salon out there, I want that I should be able to tell you that this particular salon provides which all services and at what particular price point. So address, photos, videos the basic details that in any case, are becoming -- are already available on the platform. The real value add to the user would be, if I can tell pricing about the products and services.So when we talk about investments in content, they are primarily towards getting even more quality content. For example, in a vertical such as real estate. So far, we have agents listed on the platform. But the need of our is that we should be able to showcase what are the various properties that are available for renting or buying, selling. Similar would be the behavior in several other categories as well.And the next step to having a good user experiences, fulfillment should be proper. So if you have actually ordered a pest control via Just Dial so you are ultimately putting your trust on Just Dial. So we should be able to ensure that whoever JD's trusted vendor is fulfilling that service, that transaction should get fulfilled from end to end. Now that would obviously require investments in terms of training those particular vendors or having the team in place to ensure that users get a good experience, et cetera, et cetera.Regarding your question on tech-related investment. So tech-related investments broadly -- two types of investments. One is tech team developer's product-related teams that we have. So we, at this point of time, have about 340, 350 engineers. We are in the process of aggressively beefing up this particular team.Second is -- second set of expenses are like infrastructure-related expenses. I'll have to see on exact numbers on how much we spend. But as I said that I think whatever spend that we need to do, especially on the talent side, we are already in the process of making those particular investments.
The next question is from the line of Pranav Kshatriya from Edelweiss.
I have a couple of questions. Firstly, I'm trying to understand the engagement on JD Mart platform. Since you mentioned that because JD itself is a very strong brand, a lot of searches are directed to it. I vaguely remember you were talking about search optimization being complete for JD Mart and hence traffic going to it in the last quarter. So in that context, how -- since the launch of JD, how the B2B traffic on JD Mart stand-alone plus B2B traffic on Just Dial has moved, if you can share some color on that?And my second question is, how should one see the advertisement on advertising spend for Just Dial and JD Mart planning out? I guess this quarter, there was some increase in other costs possibly due to the paid traffic coming back to the platform. That's why there was increase in traffic as well. But going forward, how should we see this? And will JD Mart will also get a share of paid traffic and hence higher traffic going forward?
So Pranav, firstly, on ad spends, ad spends were about INR 2 crores for the quarter, out of about 150 million unique users that we had only about 3%, 4%, 5, 6 million users were acquired via paid traffic. So by and large, the majority of the traffic came organically itself. In terms of engagement on JD Mart related statistics. So about the 10 million, 10.5 million JD Mart pages have been already indexed. And endeavor is to overall maximize traffic that is coming to JD and JD Mart for B2B related categories.We are also in the process of likely enabling some of JD Mart related content on JD as well, so that users coming to JD also get a better experience for these categories. In recent months, say, the last few quarters, obviously, there have been other factors as well, such as impact of COVID, et cetera. In next, say, 3 to 4 months, we should be in a better position to assess that how overall traffic is faring versus possibly pre-pandemic levels for these categories.
Okay. Okay. And I mean, in the INR 2 crores were that was spent, was it some portion of that directed towards JD Mart traffic acquisition?
Okay. So see, when we run campaigns for, say, Just Dial, when we used to do in the past as well. So 2 strategies were adopted. One was, okay, going after top 200, 300, 500 categories which were fetching JD revenue. Second was blanket campaign across all pages of Just Dial. In both these strategies, B2B pages were also getting covered.So whenever we advertise, it is not specifically that, okay, whether part of INR 2 crores is going towards JD Mart related events or not. It is more to do with the -- I mean, at this point of time, we don't do that much segregation of B2C versus B2B. However, going forward, we will have digital spends also targeted specifically towards B2B-related manufacturers, distributors, wholesalers.
The next question is from the line of Sonal [indiscernible] from Vision Capital.
This is Kunal. I have 2 questions. One was -- the first one was around the investors you people have been making in the CEM over the last 1 year, which is pre-acquisition by Reliance. So I just want to know it forget the acquisition. What were the gains of 1-year, 2-year milestones, the company to hit by the senior hiring or let's say your change in hiring there quantify that, let's say, through a sustainable top line growth, which -- has been we're targeting over the next 1, 2 years, that we get an understanding of what the organic rate of growth of business would have been irrespective of.
So Kunal, on the business, the way we are looking at it is that, okay, there is a core search business that we have, which will continue -- which should continue to flourish in say probably 80%, 90% of the categories since those categories are relatively infrequent in nature, and there will never be a possibly vertical competition in those particular categories. Because on a stand-alone basis, it doesn't make sense to do a vertical in those categories.And second would be certain categories where it is necessary to go deeper either in terms of content or in terms of fulfillment via better quality inquiries or via transaction. So the thought process is like get core business, first of all, to come back to pre-pandemic levels and thereafter, try to grow it sustainably at least on a 15% to 20% basis because the way we are still underpenetrated, that should be possible.Now that would also require certain augmentation in terms of getting better content. No longer can you just rely on address, photos, videos you need to have catalogs of businesses in certain categories, such as say real estate have content in terms of product or service type of listing. So all those changes ultimately or sort of category-specific approach should help us grow that core business at a reasonable sort of run rate.And then the newer initiatives, which would be sort of adding on top of these revenues from scratch. As I said that it will -- some of those discussions are already on that, which are the kind of verticals we want to prioritize. JD Mart is already launched. JDXpert, we are already piloting in a couple of cities with 1 or 2 categories. So as and when we have more clarity on our firmer plans on, okay, which are the verticals we are targeting, we will be able to share milestones around the same.
Got it. Understood that. So that answers the first part. Second question around -- I don't know if you could share, but basically like what are the incentives for the current management to stay put going ahead? And -- or is that something which is working on this or the Reliance management to look into and see that the leases still continue there's not too much churn.
So the existing team, they have been reasonably well incentivized through lucrative lease of plans, which have vesting in future years. Very importantly, we share a slide on our leadership of the management team. And most of the folks who have been listed there have been with us for at least 15, 20 years. So from that particular perspective, I don't think so there should be any concern around churn in top management.At the same time, like in the past also our particular incentives in terms of either e-shops or other variables have been reasonably well planned. That will be the same case going forward as well.
Understood. If I could just squeeze in the third question. Is there a plan like going higher and to keep this entity as a listed entity, as an independent listed entity or if you can't answer that right now, maybe it's okay, but just asking to get this all the business?
Yes, to the best of my knowledge, yes, it will continue to operate as a listed independent entity.
The next question is from the line of Abhijit Jain from Citigroup.
Yes, sure. Just 3 questions from my side. Of the 85,000 paid B2B campaigns that you highlighted, could you give a broad mix of how much of this would be in services-oriented accounts, and how much of it would be goods-oriented accounts?
So within that, I think broadly it should be around 50-50, 50% of those should be service-oriented and another 45%, 50% should be product-oriented.
Got it. And what is your current share of overall top line, I would ask, which is coming from large corporate or organized corporate kind of customers. I know that there was a -- you used to do business with a budget hotel operator, right? So I'm just trying to get a sense of what part of your business is coming from that segment still?
So, I'm not honestly looked at the most recent numbers, but pre-pandemic when we were doing say about INR 950-odd crores. So at that time, about INR 70 crores to INR 80 crores used to be large corporates, so to say. Corporate for businesses having a Pan-India presence for multiple outlets.
Got it. Yes. And one final question from my side. I know that in 1Q, obviously, most of your ad budget would have been obviously on the IPL side. But in a more steady-state scenario, how do you look at your ad budget allocation between digital and offline? And what is the broad split look like from a going-forward perspective?
So in our experience, like mass media advertising tends to be expensive, but lumpy. So the way typically, it works is that you do a 4 to 6 weeks mass media campaign and follow it up with a sustainable digital campaign. So maybe in terms of value, those might consume 50% of your advertising budget. But large -- in terms of tenure, maybe 70%, 80% times you might be dominating digital advertising versus mass media.So like pre-pandemic, we used to advertise in multiplexes. So that, again, is a nondigital property, but a good property to get savvy mobile users. So it will be a combination of all those that we will evaluate. As I said that we have a dedicated marketing team in place, which is already working on creatives and digital-related items so that we optimize whatever spends will do for our future product rollouts.
Got it. And Abhishek just 2 other questions. One is, see, it will you said -- and obviously, we covered this that 85,000 is our paid campaigns. On the traffic side of the total traffic, how much of the traffic goes to B2B kind of search results out of the 150 million?
So pre-pandemic, B2B used to contribute about 16%, 17% of the traffic. So revenue contribution of B2B use to be about 20%. On the traffic side, it used to be a bit lower at about 16%, 17%. I presume similar should be the behavior now as well.
Got it. Yes. And one final question from my side. Among the categories that you currently have on the business, which are the top ones you would make where you don't have any verticals, they are competing with you right now, either in B2B or in B2C in any of those segments?
See, ultimately, while there might be a vertical player or not -- I mean business models can be different. For example, in pest control services, maybe in certain urban cities in certain pockets, you might have a vertical clear. But at the same time, there might be a huge traffic that might be coming to look for a regular pest control service provider, housepainters. So there might be a vertical player who might also be doing lead generation as what we are doing.So I don't think it would be right to segregate categories to say that, okay, in these there is a vertical player in these, there is not a vertical player. The right way to look at it would be that, okay, in this category, what is the business model that company should have should it just be search base, should it be search plus transaction? And that is how we should look at category wise.
Yes, sure. That -- I think that completes my -- yes, Abhishek just one final question from my side. I know you disclosed the number of app downloads every month -- every quarter, would you have a sense of what is your MAU metric look like on the app side?
So I will have to come back to you on this. I don't have that number ready with me.
The next question is from the line of Garima Mishra from Kotak Securities. [Operator Instructions]As there no further questions from the participants. I now hand the conference over to Mr. Abhishek Bansal for closing comments.
Thank you, everyone for...
I'm so sorry to interrupt you. Sir, we got one question in queue now, would you like to say [indiscernible] request.
Yes, sure. Please go ahead.
The next question is from the line of Alroy Lobo from Kotak Investment Advisors.
The first question is on the fact that you want to begin listed, you would [indiscernible] holding now is 77.7%. So is there going to be a sell off of 2.7%? Or would there be a reclassification of the promoter in agri?
So this is my current understanding. We will have to bring down promoter shareholding to 75%. There could be some bit of dilution to e-shop related dilution that might happen over a period of next one year. But yes, remaining will have to be brought down. And there is likely to be...
There's not going to be a reclassification of promoter. There will be a selloff -- in case it doesn't come down to 75%, there would have to be about all of those balances.
So among the promoter group, primarily, it is RRVL and Mr. VSS Mani, and there are few other [indiscernible] promoters. There could be some reclassification of other promoters. However, stake held by them is not significant.
Okay. Second is on your ad productivity, you had a big spend in the last quarter on IPL. How do you measure ad productivity? For example, the INR 50 crores of ad spend that you did last quarter. How do you measure it has been very effective in growing our business?
See, so advertising, I mean, in our case, probably since that was a one high ticket expense. That is why we are discussing it. But otherwise, whenever you do say, INR 200 crores, INR 300 crores of advertising spend in the entire year, maybe there is some 30%, 40%, 50%, which did not yield the desired results, but it is difficult to pinpoint the same.So since we did this particular IPL spend today, whenever my sales team get in touch with any B2B manufacturer, distributor and give the reference of those particular ads, there is a recall that happens. So that helps in starting that particular conversation much faster. Some of these intangible benefits cannot be directly quantified. So the way any ad spend should be evaluated is that, okay, for a sustained period, you do certain spend and what is the outcome in terms of total revenues.So even for Just Dial we -- before this particular strategic transaction, we used to plan spending, say, 7% to 8% of our top line towards advertising. So not that we could quantify with that INR 60 crores, INR 65 crores of annual spend, what exactly worked, what exactly did not. But yes, overall in terms of branding, in terms of assistance to sales teams and overall traffic that does help. So you keep doing jumping between various mediums trying to see how you overall optimize it.
No, the reason I'm asking this question is that in the last quarter you spent INR 50 crores. One would have expected at least some immediate benefit of the INR 50 crores coming in terms of increase in paid campaigns or realization per paid campaign, both these are actually dropped this quarter. So -- and I understand they do not add in the long-term investment. But normally, you see results, at least in the near term, after the specific ad spend. So that's the reason I'm trying to understand internally how you measure the ad productivity?The next question is more to do with the blueprint you have closed the Reliance acquisition. When do you think you can come out with a more comprehensive blueprint for our investors because the hearing you in terms of various initiatives are taking across your [indiscernible] platforms? But on a indicated basis, so that there is a clear understanding how this company would basically evolve going forward. When do you think they're going to be ready to sort of outline the plan?
Okay. So just one more comment on the first remark that you made. See, this year's IPL was also we have to remember, not in a very normalized scenario. I mean, since we had impact of COVID second wave, to the extent that the IPL had to be translated and be run in 2 phases. So that also is something that we should keep in mind, which also is the reason that one should not be looking at it that, okay, in this particular quarter ex amount of spend, what is the immediate gain in next quarter and so on.On your second question in terms of time frame, I think in another about say 6 to 8 weeks is tentatively we should be able to firm up our plans and be able to openly communicate that what is the road map that we are taking forward and then be able to also track progress on that particular road map.
And sri, we don't have anyone in queue. Would you like to have any closing comments now?
Yes. So thank you, everyone, for joining us. In case you have any further queries, please do reach out to us. We do our best to address. And you shall very shortly hear further details on our strategic road map ahead. So that's it from our side. Thank you.
Thank you. On behalf of Nomura Financial Advisory and Securities, that concludes this conference. Thank you for joining us, and you may now disconnect your lines.