The Hindu Business Line : Just click for jobs

When the Internet galvanised India in the mid-nineties, few realised that this would bring about a generational change in our lives. . Info-edge India (owner of naukri.com) has been a pioneering Internet-based online portal that has hit it big time.

Business Offering

Info-edge is a top online classifieds company with presence in four domains — recruitment, real-estate, matrimony and education. In recruitment, its flagship product naukri.com connects India Inc with the country’s talent pool and accounts for more than 80 per cent of its overall revenues.

In real-estate, its portal 99acres.com serves as a dashboard that lists properties available for sale and rentals on a pan-India basis. Jeevansathi.com, the company’s matrimonial portal, helps users find their partners and its shiksha.com helps institutions advertise their course offerings.

Founded by Sanjeev Bikhchandani, the launch of naukri.com was in 1997. In 2000, the company received venture capital funding. Since then, its growth has been pronounced. Revenue grew from Rs 3.8 crore in 2001-02 to Rs 270 crore in 2008-09 — nearly doubling every year! This growth has been possible due to the company’s ability to keep its business model scalable and innovative.

Today, 71 per cent of Internet users search for jobs online and this activity ranks second only to the search for travel products which is used by 84 per cent of Internet users. Eyeballs are the key to success in web-based models. Naukri.com followed the free model .

This ‘free’ service attracts jobseekers in large numbers. Each day, about 12,000 CVs get registered and as of June 2009, 18 million CVs were registered with the portal. The money comes from the fee employers pay for listing the jobs and getting access to the CV. More CVs, more the job listings; more the job listings, more the CVs. This cycle keeps the cash registers jingling. The model for Jeevansathi.com is even more interesting. Match seekers can register, search and express/accept interest free of cost. However, proceeding to the next step would require them to pass through the “toll-gate”.

Porter’s 5 forces analysis

Bargaining power of suppliers: Low

Branding and eye-balls are the keys to succeed. Suppliers are Web site designers who do not add much value to the overall scheme of things. Hence, the bargaining power is low.

Bargaining power of customers: High

A feature of the online portal business is that customers register with multiple portals in order to maximise the chance of finding a taker. Thus, portals are always on their toes to woo customers and retain them.

Threat of substitutes: Medium

Portals’ value proposition in terms of speed and cost is enormous compared to that offered by traditional brokers.

But of late, social networking sites offer almost similar data and are gaining popularity. However, there is no major threat in the vicinity.

Threat of competition: High

Portals in India have gained inroads only into a few segments such as recruitment and matrimony. This narrow business scope results in cut-throat competition amongst portals that target the same customer base.

Barriers to entry: Medium

Portals are an ‘easy to start’ business. Designing a Web site is not expensive. Overheads are minimal since the business is run over the Internet. However, gaining scale is challenging.

If Info-edge keeps its innovative edge, it has a long fair road ahead.

(The authors are Chennai-based chartered accountants.)

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