JustDial Business Model: How Does It Make Money

PV Vyshnavi PV Vyshnavi
Sep 12, 2020 7 min read
JustDial Business Model: How Does It Make Money

“JustDial app se pucho” has now become the main tagline for the local search market JustDial. It has become so popular in India that its advertisements run all across the country on billboards, social media as well as movie theaters. Have you ever wondered how this company become so famous?  JustDial came from humble beginning like most successful ventures, it was the Justdial business model that make the company to be one of the top classified website in India.

JustDial was founded by V.V.S Mani who was a former employee of the yellow pages when he thought of JustDial idea in 1987. The company’s turnover is over 128.8 Million with a huge call count of over 1.9 Million on a daily basis and has 7.22 million daily page views. It extended its services to Canada, UK, UAE, USA and its offices in Ahmedabad, Chandigarh, Hyderabad, Bangalore and other metropolitan cities of India.

Justdial logo and number.
Justdial logo and number.

JustDial allows businesses, websites anyone offering any kind of service to list for FREE in their search engine but charge INR 2000 per month in turn forward all user details in that segment who call Justdial looking for that service. Today, JustDial is so popular and successful enough to employ the services of one of India iconic actors, Amitabh Bachchan as their brand ambassador.

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History of Just Dial

The company registered in 1994 they started out in a hired garage, with rented furniture with a merge investment of ₹50,000 and with just 5 to 6 employees. The founder V.S.S Mani has been a serial entrepreneur throughout his career as also had started a company called Ask me. Although the company was successful the business soon failed since the business model wasn’t viable as the penetration of telephones was less than 1% in that time as it was in the year 1989.

Amitabh Bachchan the brand ambassador with V.S.S Mani the CEO of JustDial
Amitabh Bachchan the brand ambassador with V.S.S Mani the CEO of Justdial

Although the name Ask me was a catchy name which hit the customer mind, the lack of a telephone number with a good and memorable hook to it but the number was not on their lips because of its complexity. So the business failed shortly, while that did not stop V.S.S Mani as he planned to move into a business of wedding planning. Mani was successful with this venture this time as he generated a profit margin of ₹ 2.5 lakhs.

However, still dissatisfied with his line of work and the business model, Mani decided to head towards his original idea of making a platform for local search destination leading to the making of Justdial. Mani agreed to the fact that he had made mistakes earlier and had learnt many things from his failure.

With the new start he moved on with a fire in heart to become a leader in the local search destination. He then focused more on getting a valuable number rather than to have a unique name for the company which proved a big mistake to his previous venture Ask me. This time he succeeded got the number 10 times the number 8.

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JustDial Business Model

Justdial's success story essentially boiled down to the business model by which it was run. This has resulted in Just Dial reporting a negative working capital and higher and higher revenue each month, which means their business practically runs itself. Let’s look at just how Justdial was able to achieve such a widespread outreach.

First things first, the founders of Justdial got a catchy and easy to remember telephone number. Since they started out as a yellow pages company they needed a telephone number which user remembers at their fingertips. Thus after acquiring the phone number 10 times 8 they combined it with the name JustDial that made the company easy to remember.

Once they had successfully established the brand identity the next obstacle that they faced was the just dial team was one of the populating a database. They then managed to achieve the approaching local businesses personally on foot door to door. And continued this process until they were able to get a substantial healthy database.

Justdial Business Model.
Justdial Business Model.

Once justdial established a good database which had a considerable volume the next challenge awaiting them was getting the users to use their extensive research and database to make the company a success. It was extremely difficult to generate an audience for the platform as it was short on funds and advertising revenues were also not that yielding.

Therefore in order to promote the usage of their service, the business tried convincing their clients as well as their employees to use the service being offered by the company. One more efficient and smart tactic that justdial deployed was not to focus and target on the big name brands but it was to strengthen their ties with diverse local businesses that were already available.

This basically helped people to search for small businesses for daily utility like carpenters, plumber, mobile shop, painter among others. This method of working on word of mouth referral helped justdial get a lot of popularity and skyrocketing the number for their user base. In addition, justdial was adamant of being a helping hand towards small and medium organizations.

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Revenue Model of JustDial

Just dial was adamant of huge online visibility, payments solutions, customized website, mobile site, and mobile site, and mobile app were all packaged together making an attracting value addition for companies with an MSMS registration. Justdial has a very efficient revenue models which cut their operation costs to a minimum. This was a tough task for the team as the management was lacking in fund and was unable to afford the advertisement cost.

Justdial revenue increasing in 2018.
Justdial revenue increasing in 2018.

So they decided to ask their employees to use the services of justdial.The low price of the products helped justdial in capturing the marketing quickly and each month they ended up with additional revenue. This gave them spare money and helped them in hiring more sales staff. The clients showed faith in the brands and paid in advance for the service.

The company had now started to expand their service not only in the category but also in geography. The B2B and B2C services available on a number of platform like phone, internet, mobile internet and SMS and now the growth of mobile and handled devices has motivated Justdial to launch its mobile app for android, IOS and blackberry.

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The investers of JustDial

In June 2012, Justdial raised $57 million from the existing investors including Sequoia Capital and Sapphire Ventures. Earlier, the company had raised funding of $10 million in June 2011 from the same investors. The fund was also utilized wisely by the management which increased the brand value in the industry. The funds were utilized in the process mentioned here.

With the growing popularity and ever growing network of justdial many big firms started seeing the benefits of the local business indexing system and started investing in the same. Some of the major investors in the Justdial journey are:

  • SAIF Partners
  • Sequoia Capital
  • Tiger Global
  • EGCS
  • SAP Ventures

The revenue raised was then managed effectively for brand building, promotions and advertisement. Here are few objectives that were achieved through the investor money.

  • Strengthening the Company’s Brand Value
  • Improving the relation of the brand with SME’s.
  • Extending the scope of business activities into new products and activities
  • Obtaining licensing to expand the geographical outreach of the company.

Reasons to why JustDial is a success

  • Long Standing presence in the search market
  • Business models adapts to the needs of the present. They shifted platforms from a telephone based directory to a web based directory and now to a Mobile App based services.
  • Quick Response time to user questions
  • Consistently delivering User Experience of the highest quality
  • Profitable revenue Model
  • Experienced Marketing and Management Divisions with extensive experience.

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