An Analysis of strategies for the future

direction of Info Edge

1. Introduction
Info Edge is India’s largest Internet classifieds company and operates​ ​Naukri.com​ (classifieds for jobs),​ ​99Acres.com
(real estate classifieds),​ ​Jeevansaathi.com​ (matrimonial classifieds),​ ​Shiksha.com​ (higher education classifieds) and
other business units in allied spaces. Info Edge also had a very successful investment arm, which had been the first
investor in Zomato (restaurant listings and food delivery) and Policy Bazaar (insurance comparison shopping), two of
the largest successful startups in India along with 29 other startups with an aggregate valuation of more than $1B.

Naukri.com​ is the largest business of Info Edge bringing in 70%+ of the revenue and the only profitable business
segment. It is also the leader in the recruitment space in India with over 90% market share as of 2020.

As part of the Case Analysis, we examine the different strategies and their merits and demerits for the future of
InfoEdge.

2. Analysis of different Strategy Option

2.1 Collaborating with Google Jobs and Linkedin Jobs

Resdex, the resume database of Naukri is the largest revenue source accounting for 50%+ of the revenue. Any
strategy that strengthens this offering by aiding the virtuous cycle (​Exhibit 11A​) will help Naukri in maintaining its
Market Leadership.

Partnering with Google for Jobs is one of such strategies. Not being part of Google for Jobs, Naukri is not only
missing out on the higher ranking in the Google Search but also missing out on potential candidates, which might
create a negativity on the side of recruiters and employers. Further this will enhance the resume database for Naukri,
since the candidate needs to finally create a profile on naukri for applying to the Job. The virtuous cycle is thus
strengthened by getting more traffic and applications.

Having said that, Naukri also needs to be careful about the risk of Google emulating Google Flights in the recruitment
space. Over the last few years, Google flights has collaborated directly with Airlines to circumvent the Online Travel
Agents. Though the probability of the same is less in the recruitment space as the employer base is highly
fragmented as compared to only few airlines in the travel space.

On the other hand, Partnering with Linkedin is not suggested. The major reason is that both Naukri and Linkedin have
the same customer segments with a similar product. This collaboration may lead to cross cutting of the customers.

2.2 Vertically integrate their value chains

Info Edge has expertise and experience in developing platforms to enhance matchmaking between different
stakeholders, be it employer and candidate in​ ​Naukri.com​ or bride and groom in​ ​Jeevansathi.com​. There are two
major issues in vertical integration for InfoEdge. First, a Conflict of Interest may arise because of Vertical Integration
and result in competing with its own customers. For example, recruiting firms make 26.6% of its customer base as of
2019, and Quadrangle, it's in house Executive Recruitment Agency, competes directly with other recruitment firms.
Second, vertical integration requires building strong operational capabilities and a longer payment cycle which may
not be feasible and scalable. For example, AllCheckDeals required building a strong on-ground team to not only
handhold the customers but also was a positive cash flow business where the payment happened at a later stage.

Having said that, Info Edge can increase their share of the customer wallet by playing to its strength of Matchmaking
and Technology. One such opportunity is to create a listing platform for various wedding vendors similar to
weddingz.in​ (acquired by Oyo) to capture a larger share of wedding expenses. Another opportunity is to leverage its
technological capability and new age technology like machine learning to create premium products that can help the
customer derive more value from the existing platforms.

2.3 Convert into a Horizontal Classifieds Platform by entering

into other verticals
In the global context, large economies either have a large horizontal player like​ ​58.com​ in China or Craigslists in US
or a combination of a large Horizontal Player and one or two large vertical players as in the case of the Middle East
and UK. But in India's context, there is no single large player in the Horizontal Play and most of the vertical segment
have 2-3 three large players except in recruitment where Naukri is the leader with 90%+ market share.

Also, considering the experience of InfoEdge in entering new verticals, it is clear that there is no single template that
can be applied to every vertical of Classifieds. Each vertical has its own market structure and drivers that require a
dedicated team that can build a business on First Principles. Also, building a business from scratch where there is no
early mover advantage, will require significant investment in terms of Money and Time.

Keeping this in mind, it is not beneficial for Info Edge to enter a new vertical. But at the same time, it can try to
capture different customer segments in the existing verticals. For example, in the recruitment space, Naukri can try
and venture into other segments of recruiting like Blue Collar Jobs, Freelancers, Management Jobs and Coders like it
did by acquiring IIMjobs and Hirst in 2019.

2.4 Invest more aggressively in Jeevansaathi and Shiksha and

grow them to massive profitability
Info Edge acquired​ ​Jeevanshathi.com​ in 2004 and since then has grown into No. 3 matchmaking platform in India
with a No. 2 position in North and West India. With the fragmented nature of the Matchmaking Market in India, where
there are different players dominating a particular community or region, it will be difficult for​ ​Jeevansathi.com​ to
leapfrog into the No. 1 position without merging or acquiring existing players.

On the other hand,​ ​Shiskha.com​ though a leader in its segment, the market is too small for the Listing platforms in the
Education Space. With most of the colleges and universities admitting students through national level entrance
examinations both in Graduate and Post Graduate level, the utility of the​ ​Shiksha.com​ remains limited.

Considering the above points, it is not suggested to invest aggressively in both​ ​Jeevansathi.com​ and​ ​Shiskha.com​.
2.5 Invest more in outside startups to develop more success
stories like Zomato and Policy Bazaar
Info Edge is one of the first and most successful Corporate Venture Capital in India. Starting with the investment of
Policy Bazaar in 2008, Info Edge has invested Rs 1,453 Cr in 30+ startups in India. Some notable names include
Zomato, GreytHR, ShopKirana, Medcords, and Gramophone. It has also seen its share of losses with failure such as
StudyPlaces, 99 Lables, My Dala, Canverra, and Meritnation, collectively writing off Rs 436 Cr.

As mentioned in the case, Info Edge brings in the following strengths that makes it a different and favorable to
entrepreneurs:

● Operational experience of the Info Edge founders of creating and scaling large internet companies in India
● Access to function specific advice and support from the internal department heads.
● A patient investor without a timeline to return back capital to the LPs.

Building on this reputation of an entrepreneur friendly and a hands-on operator VC, info edge should invest in more
business models that are riding on the "Big Shift in the Indian Ecosystem". One such trend is the ​next half a Billion
internet users, which will be significantly different from the current set of users. They, hailing from the hinterlands and
small towns of India with income levels much lower than current users, may not be well versed in English (or even be
literate) but this set of users will bring in a new opportunity to solve some of the pressing problems of India across
supply chain, agriculture, healthcare, education and fintech with increasing mobile internet penetration coupled with
affordable smartphones. Some of the early success in this space can be seen in companies like DeHaat and
AgroStar in agriculture, and Medcords in Healthcare. It opens up a new dimension for Info Edge to nurture and invest
in the new generation of entrepreneurs.

2.6 Expand to International Markets

Expanding to international markets with existing market leaders is not suggested.

Classifieds are one of the first things to get digitized with the advent of the internet, resulting in market leaders in
almost all major geographies. For example, in the Recruitment space, Monster is present in 30+ countries along with
similar leaders in Europe and SouthEast Asia. As a result, launching in any new Market without any differentiated
product and without any local team that understands the local market dynamics will not make sense.

2.7 Maintain Status Quo

Naukri.com, the largest and the only profitable business of InfoEdge has reached a stage of declining growth. In the
past three years, though the number of resumes on the platform is increasing, the rate of addition is on a constant
decline, with the growth percentage declining from 11.79% in FY 17-18 to 9.52% in FY 19-20. This also happened in
a period when the Internet users in India has grown to all-time high crossing 49.7% of the population in 2017.

So, in this scenario, even if the share prices of Info Edge are at an all time high, maintaining status quo is not an
option. They need to strengthen their core offering of Naukri.com and strive hard to maintain the Market Leadership
by innovating and providing more value to their core customers.