Why not JUST DIAL? – The challenges of being a pioneer

It just seems like yesterday, when the yellow pages gave in to a digital innovation as Just Dial opened up a whole new way of getting buyers and sellers together via the telephone. Quickly they added an internet option, followed by the mobile App. Through these years the Company has been able to maintain a healthy EBIDTA (Graph 1), and enviable cash balance (Graph2).

The capital market minions are not impressed, however. The market capitalization has been dropping and currently, the Company is valued close to its cash on hand- Which means there is hardly any premium to the business!

Three developments seem to provide an answer to this drop in valuation:

Beyond the Aggregator: Riding on the market developed by the pioneer, later players like Urban Company introduced a differentiator by taking on responsibilities beyond an aggregator. The service providers on their Apps are vetted and the Company steps in to take payments if required. This is a subtle assurance to the user of the capability of the provider, and the willingness of the Company to settle disputes.

Beyond Information: The world bows to Google when it seeks information-even as minute as the location of the nearest Kirana store.  That space is best left to them! JD, unfortunately have Google as their competitor- for what it provides is simple information. Alexa and its siblings would provide that without a device!

Back to Specialization: After getting general information from Google, the customer tends to rely on a “specialist” for consummating the deal. This is a threat that Amazon too faces as the specialist sites score on quality and currency of information in addition to covering the entire chain from the origination of the need to payment for services delivered and maintains links after the sale as well.

We are sure the pioneer has a plan to yet prove the capital market wrong!

(With inputs from Amlin Roche and G Sivaram)

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