Close to 90 per cent of the revenues of his company, Info Edge, come from its recruiting portal Naukri.com - and naukri makes close to half its income from recruitment in the IT and BPO spaces.
Even the thought of the IT spends coming off in the US following the sub-prime loan crisis doesn't bother the managing director of the Rs 140-crore (Rs 1.4 billion) Info Edge.
He has ambitious plans for Naukri and Info Edge's other two ventures, real estate portal 99acres.com and matrimonial website Jeevansathi.com.
"Our strategy over the next five years will be to grow Naukri.com and also to become the leader in the real estate space. By then, our portfolio should see revenue streams that are more even," says Bikhchandani, who started Info Edge in 1997.
He's already started working towards those goals. Take a look.
On the job
Info Edge's enthusiasm for Naukri is easily explained. Between FY06 and FY 08, the job portal is tipped to grow at a blistering 60 per cent CAGR, and settle at a highly respectable 37-38 per cent after that. That is higher than the market average: according to IAMAI figures, the online recruitment market in India will grow 50 per cent to Rs 600 crore in 2007-08.
Naukri accounts for over half the market, both in revenues and in database size -- with over 11 million resumes, it is ahead of Monster.com (7.2 million).
The 10-year-old portal has guarded its marketshare ferociously for several years, but now threats loom, both internally and from outside.
Even as newcomers like Web 18 work towards chipping away Naukri's share, Info Edge COO Hitesh Oberoi admits that the company is "just 12 to 18 months ahead of the competition in terms of technology and product offerings". What would be a good lead, then? "About 10 years," he says, only half-joking.
Competitors and analysts also voice doubts on the efficacy of the database as a USP. "It is the quality of resumes, rather than the quantity, that will matter," says Surya Mantha, CEO, Web 18.
Also, as Ernst & Young Partner Milan Sheth points out, the database needs to be relevant. "You may have several million resumés but the important question is, how many jobs have people found through the portal?" he asks.
Info Edge is not unaware of these issues. While it allows anyone to post a resumé on the site, there are effective search filters for recruiters. It is also working with its sales team to add about 350,000 new CVS to the site every month.
Still sometime last year, Naukri updated its strategy. The first task was to broaden its product offering. In April 2006, it launched InstaHire, a service that connects recruiters and applicants through SMS.
Three months later, it unveiled Naukrigulf.com, aimed at the low-competition West Asian market. Launched to tap into the booming Indian expat market in the region, the site has extended its brief considerably. "More than half the resumes are of non-Indian origin," says Bikhchandani.
This year, the company has rolled out a professional networking site, Brijj.com. Says Oberoi, "The idea is to get people to connect. We have now integrated the site with Naukri.com, so that someone already registered there can automatically get on to Brijj.com." Post the integration, Oberoi hopes to get 10,000 profiles a day on Brijj.com compared with 200 a day currently.
Naukri is also ensuring frequent visitors to the parent site are constantly surprised. It redesigns the site almost every six months, based on customer feedback, ensuring leaner interfaces, soothing colours and relevant information upfront.
A few weeks back it revamped the "job seeker" section and, according to Oberoi, there's been a 30 per cent surge in applications. "It is difficult for a me-too player to survive. Users can evaluate the offering and measure the responses they receive, so the product needs to meet their needs," he says.
Before that happens, though, a portal needs to ensure its visitor stream. Which means brand building. As E&Y's Sheth explains, "The brand is perhaps the only pull in the online world. Many of us pay per minute to use the Internet, so we tend to visit the top sites."
Unlike most consumer brands, whose adspends are high at launch time and then taper off to 8-10 per cent of sales, internet portals' adspends remain consistently high. Web 18's Mantha confirms that the figure may be as high as 15-20 per cent of sales.
Unlike Jobstreet, which advertises on group portals like Moneycontrol and Ibnlive, Info Edge can't really leverage that advantage -- Jeevansathi and 99acres target a different customer profile, so a banner ad for Naukri on these sites, and vice versa, may not have much impact. Instead, it restricts itself to links on these sites.
Advertising is only part of the story. Most portals spend as much on creating buzz because, as Anupam Mittal, chairman and managing director of People Interactive, which runs the Shaadi.com portal, observes, in the online world, creating buzz is probably as important as advertising.
Of course, in Naukri's case, its ad campaign created enough buzz -- the Hari Sadu television commercial, launched last year, was feted and criticised in equal measure, ensuring invaluable word-of-mouth publicity for the site.
Says Oberoi, "Our research showed that most people quit their jobs because of their bosses rather than their companies and we decided to use this." The ads apart, the company also sponsors corporate and campus HR events and has recently started organising job fairs.
With spends on brand-building and other costs ramping up from about 20 per cent of sales to 25 per cent, Info Edge's operating margins are unlikely to expand dramatically and will probably settle down in the region of 30 per cent from the current 33 per cent.
Rather than raise prices indiscriminately -- strategy allows for one price hike a year, of between 15 and 20 per cent -- Naukri has got around the issue by introducing variants of the existing service line at altogether different price points.
For instance, it offers limited access to resumes and customised searches at lower price points. "We are still trying to penetrate the market and keep competition at bay, so we don't take many price hikes, unless a product is in high demand," explains Bikhchandani.
Marrying opportunity with initiative
Which is why it is essential to scale up, something Info Edge hasn't really been able to do with Jeevansathi.com. The wedding portal lags behind Shaadi.com and Bharatmatrimony.com, a ranking that hasn't changed since Info Edge acquired Jeevansathi in September 2004.
Jeevansathi has got two strikes against it. One, it hasn't made inroads in the lucrative NRI market. Then, customer acquisition costs are high -- Shaadi.com's Mittal estimates it could be anywhere between Rs 50 and Rs 200 for a customer -- hindering the business from reaching critical mass.
That's still some way away: although Bikhchandani aims to reach revenues of Rs 50-60 crore (Rs 500-600 million) in three years, at present Jeevansathi and 99acres combined bring in about Rs 12 crore (Rs 120 million); the two posted combined losses of Rs 2.5 crore (Rs 25 million) in the September 2007 quarter, down from Rs 4 crore (Rs 40 million) in the June quarter.
How will Jeevansathi make its mark in the Rs 140-crore (Rs 1.4 billion) market? By focusing on the marriage mart in North and West India, and later looking to the South. Last year, it launched a Hindi version of the website to cater to this market and now also plans to improve the "matching" system, which is critical for a matrimonial site. "Our advance search has 24 parameters," explains Oberoi.
Local advertising will help and a brick-and-mortar support system to appeal to older family members -- similar to Shaadi.com's Shaadi Points -- is also not ruled out, although this could delay the portal's turnaround.
Like Naukri, Jeevansathi also depends extensively on customer feedback. In 2005, it redesigned its website based on research that showed people wanted to know more about prospective matches -- now people profiles are displayed upfront on all major landing pages. This year, it again rejigged the site, this time adding customised search features and intelligent community mapping to simplify navigation.
Building on strengths
It may be a while before Jeevansathi "settles down". But Bikhchandani sounds far more confident about 99acres.com, the real estate portal launched in August 2005.
"The site is growing at upwards of 200 per cent a year," he declares, adding that it is likely to break even before the targeted March 2009 date. That's probably because 99acres appeals to a broad customer group, including NRIs and Indian builders, brokers and individual buyers.
And given the low penetration of online real estate sites, it is likely to remain protected from any variations in the operating environment. In July, the site launched its first TVC and a few months later, agreed to cross-link with international real estate site Properazzi.com.
All of which should help the site add to its listings (already past 60,000) and expand its scope for providing allied services like facilitating home loans and putting users in touch with interior decorators. If that happens, it will be all meat for Info Edge, no poison.