Market Research Report :Local Search markets in India 2012


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Local Search Market in India to grow at a healthy rate as internet penetration increases and local search increases their offerings and spread out in different platforms like mobile and offline.

The report begins with an introduction which explains the features of online and offline searches and how they have evolved with time. Further, the advantages of local searches are explained. It also gives a snapshot of global search market and the popular uses of search engine. Global market share for 2011-12 is also illustrated. In the market overview section the market size of local search in India is shown along with the growth rate. It also shows the percentage of successful local searches in India. Next the major offline search modes are described. In the next section the business model for both online and offline modes are explained.

In the next section drivers and challenges has been highlighted. Drivers include increase in phone based local searches. Proliferation of internet has also been instrumental in increasing the demand for local searches. Rise of mobile internet is yet another driver for the rise of phone based local searches. It has also been found that local search advertisements are more cost effective for small businessman. Also offline based local search in regional languages will further boost the market for the same. Challenges identified are search engines are acting as default sites for local search as well. Offline searches further face the barrier of ‘paperless environment’ where corporate houses encourage less use of paper. Also a large section of population in India cannot use local search because they are not aware of the concept and also they are not conversant in English whereas bulk of the search results are in English only.

Trends identified include increase in PE/VC investments in local search engine sites. Also many local search sites are migrating to other platforms like mobile platform. Some other local search engines are providing other additional services in order to garner a greater market share. In order to increase their offerings some of the local search engines are entering into a JV with other players.

The competition section begins with complete traffic statistics of the major players. It includes ranks, audience snapshot, technical details and most viewed sub domains. The summary slide lists the major local search engine brands and their corresponding phone number and websites. The major players in the market have been profiled which includes a financial summary for each of the players. Key ratios and key contacts are also listed. The last section offers strategic recommendations for the players in the local search market.

Table of Contents
Page 1: Executive Summary
Page 2: Features of local search (Online and Offline)
Page 3: Evolution of online a

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Market Research Report :Local Search markets in India 2012

  1. 1. Local Search Market – India May 2012
  2. 2. Executive Summary •Current Local Online Search market size in India is approximately INR A bn  •Local Online Search players face competition from global players as well Market •Local players are trying to reach to a wider audience by moving into other platforms • Increasing database holds the key to be more successful  Drivers – Online: Proliferation of Internet, Increasing use of mobile internet  Drivers – Offline: Phone‐based local search to dominate, Offline local searches can be done in  regional languages    Common Drivers: Profitable for small and local business owners Drivers & Challenges E  Challenges – Online: Search engines acting as default sites for local information search, lack of  L awareness and language barriers, building database around local content P  Challenges – Offline: Lower acceptance in present corporate culture, global drive towards  M paperless environment Trends S A  Increase in PE/VC investments  Local web directories moving towards mobile platform  Providing additional services to the users  Players are entering into joint venture agreements  Mobile service providers are entering the domain Major PlayersCompetition Player 1` Player 2 Player 3 Player 4 LOCAL SEARCH  MARKET – INDIA 2012.PPT 2
  3. 3. • Introduction• Market Overview• Business Model ‐ Online ‐ Offline• Drivers & Challenges• Trends• Competition – Traffic Statistics – Major players • Strategic Recommendations• Appendix LOCAL SEARCH  MARKET – INDIA 2012.PPT 3
  4. 4. Local searches try to meet specific requirements in targeted geographies  Local Search Local Offline Search • This method of searches includes  the use of specialized city specific  • Local search relies on geographically  guides/books/ journals to find specific city related information targeted pages to bring searchers  relevant results • Searches are much more city  specific than other search results Local Online  Search • Often the searches are specific to a    • This essentially means the use of specialized internet search engines  particular zip code and street  E to find geographically constrained searches number P L Local Online Search   Major Sources  of  Revenue S AM Registered Users • Registered users pay an amount for  being listed in site Pay Per Click • Advertisers pay an amount to the  site every time the ad is clicked Local Offline  Search   Major Sources  Registered Users Advertisement of  • Registered users pay an amount for  • Advertisers pay an amount to  Revenue being listed in yellow page display its logo/message LOCAL SEARCH  MARKET – INDIA 2012.PPT 4
  5. 5. Local search market is expected to grow rapidly as the service is becoming increasingly popularMarket Overview – Online  (1/2)  Search Engine Marketing Revenue • Online local search involves the use of localized  portals that allow users to search for geographically‐ constrained results from a database of local listings 15• Major players have multi‐channel access including  A% Y phone, web, mobile portals 10 T R• Local search engines provide information on a wide  W E 5 Q range of topics ranging from company addresses to  food joints, hospitals, movie theatres etc.• Advertising is the main source of revenue generation• India is the third largest Internet market and this  LE   0 20-- 20-- 20-- 20--e 20--e 20--eTop Internet Markets (20‐‐) MP gives ample scope for all local search engine to  maximize their business Local Searches : India  C1 0 100 200 300 S A 400 500 600 Type A  Type B Potential for  local search  C2 options to grow A% B% C3 C4 C5 LOCAL SEARCH  MARKET – INDIA 2012.PPT 5
  6. 6. Business Model – Online • Sponsored results get greater visibility as they are highlighted and are  Sponsored  given preference over the other listings Listing • Sponsored advertisers also have the option of including video ads to  attract attention and demonstrate a clearer picture of the product • Players adopt either of the two models for sponsored listings –  Flat fee structure Listing Fee  Pay per lead • Since the listing is free anyone can register and showcase their services Non‐Sponsored  Listing E   • Non‐sponsored results get lesser importance than the sponsored listing  L • The results for these sites appear much later in the listings  MP • Traditional advertising options similar to any commercial website • Full range of advertisement inventory including banner ads, videos (ad commercials) etc.  AAdvertisements irrespective of the user search or results S • Revenues generated with standardized models such as Cost Per Click, Cost Per Action, Cost Per  X impressions and Cost Per Visitor • Database sharing or syndication: Some smaller local search companies are sourcing listings or  ‘powering’ search results from market leaders with comprehensive databases in return for    Other Revenue  payment Sources • Partnering with global search engines: Major search engines are partnering with local search  directories to integrate listings in results for local search queries • Contact Database: In return for providing free information, local search directories maintain  contact details of users. User contact database is sold to businesses for marketing activities LOCAL SEARCH  MARKET – INDIA 2012.PPT 6
  7. 7. Drivers – Summary  Offline Market  Online Market  Common Drivers Drivers Drivers• Phone‐based local  search to dominate • Proliferation of  Internet • Profitable for small  and local business  owners• Offline local searches  can be done in  • Increasing use of  regional languages mobile internet LOCAL SEARCH  MARKET – INDIA 2012.PPT 7
  8. 8. Challenges – Summary  Offline Market Challenges Online Market Challenges  • Search engines • Lower acceptance in  acting as default  present corporate  sites for local  culture information search • Lack of awareness  and language • Global drive towards  barriers  paperless  environment • Building database  around local content LOCAL SEARCH  MARKET – INDIA 2012.PPT 8
  9. 9. Trends – Summary  Increase in PE/VC investments Mobile service providers  Local web directories moving  entering the domain towards mobile platform Trends  Players entering into joint  Providing additional services to  venture agreements the users LOCAL SEARCH  MARKET – INDIA 2012.PPT 9
  10. 10. Traffic Statistics – Summary The rank is calculated using a combination of average daily visitors to  Global & India Rank the websites and page views on them over the past k months. The site  Global & India Rank with the highest combination of visitors and page views is ranked  accordingly Reach Reach LE   Estimated percentage of global internet users who visit the websites for  a period of  abc month MP S AUnique Page Views/Day Unique Page Views/Day (%) (%) Estimated daily unique page views per user for the particular website  for a period of abc month Search Engine  Search Engine  Estimated percentage of visitor traffic redirected from search engines Redirection (%) Redirection (%) LOCAL SEARCH  MARKET – INDIA 2012.PPT 10
  11. 11. Public : Domestic Company – Company 1Company Information Offices and Centres – India  Block ABCCorporate Address City XYZTel No. 123456Fax No. 1234567  Website http://www.abc123com/Year of Incorporation 20‐‐ P LE City AProducts and Services CategoryProduct 1 P1,p2,p3 S AM Products/Services Key People Name Designation ABC abc XYZ xyz MNO mno LOCAL SEARCH  MARKET – INDIA 2012.PPT 11
  12. 12. Public: Domestic Company – Company 1Financial Snapshot Key Ratios y‐o‐y change  Particulars  20‐‐ 20‐‐ 20‐‐ 20‐‐ Revenue Net Income (20‐‐‐‐‐) Profitability Ratios 6 x4 0.15 Operating Margin a1 a a2 a3 a4 x3 Net Margin b1 b b2 b3 b4 4 x1 x2 0.10 Profit Before Tax Margin c1 c c2 c3 c4 2 0.05 Return on Equity d1 d d2 d3 d4 Return on Capital Employed e1 e e2 e3 e4 0 0.00 Return on Working Capital f1 f f2 f3 f4 20‐‐ 20‐‐ 20‐‐ 20‐‐ Return on Assets g1 g g2 g3 g4Financial Summary  Return on Fixed Assets h1 h h2 h3 h4   Cost Ratios• The company incurred a net profit of INR  A mn in FY 20‐‐, as  E Operating costs (% of Sales) i1 i i2 i3 i4 compared to net profit  of INR B mn in FY 20‐‐ L Administration costs (% of  j1 j j2 j3 j4• The company reported total Income of  INR X mn in FY 20‐‐,  Sales) registering an increase  of  r % over FY 20‐‐• The company earned an operating margin of  d1  % in FY 20‐‐ an  decrease of  k  %  points over FY 20‐‐ MP Interest costs (% of Sales) Liquidity Ratios Current Ratio k1 l1 k l k2 l2 k3 l3 k4 l4 A Cash Ratio m1 m m2 m3 m4• The company reported debt to equity ratio of  g  in FY 20‐‐, an  S Leverage Ratios increase of r % over FY 20‐‐ Debt to Equity Ratio n1 n n2 n3 n4Financial Summary  Debt to Capital Ratio 01 o o2 o3 o4 Interest Coverage Ratio p1 p p2 p3 p4 Indicators Value (DDD/MMM/YYYY) Efficiency RatiosMarket Capitalization (INR) a Fixed Asset Turnover q1 q q2 q3 q4Total Enterprise Value (INR) b Asset Turnover r1 r r2 r3 r4EPS (INR) Current Asset Turnover s1 s s2 s3 s4 c Working Capital Turnover t1 t t2 t3 t4PE Ratio (Absolute) d Capital Employed Turnover u1 u u2 u3 u4 Improved Decline LOCAL SEARCH  MARKET – INDIA 2012.PPT 12
  13. 13. Public: Domestic Company – Company 1.Key Business Segments  Key Geographic Segments  C1 6,000 6,000 c1 d b1 c 4,000 4,000 b a1 a   2,000 2,000 0 20‐‐ 20‐‐ 20‐‐ 20‐‐ P 0 20‐‐ LE 20‐‐ 20‐‐ MKey Recent Developments Description OverviewProduction facilities S A News • It sells product A under the brand name of ‘abg’ & ‘def’ • In India the company has k manufacturing hubs and  j marketing offices Shareholding pattern • Promoters of the company hold j % of the share while k % is held by general publicClients • Clients are spread across ghj countries spanning across t continentsInvestments • The company wants to invest INR K mn in a company through a  joint venture in Country 2  producing product a and product b • So far the company invested INR 0.C mn in company A in country A LOCAL SEARCH  MARKET – INDIA 2012.PPT 13
  14. 14. Thank you for the attentionThe Local  Search Market – India 2012 report is a part of Netscribes  Entertainment and Media Industry Series.For more detailed information or customized research requirements please contact:Phone: +91 33 4064 6214E‐Mail: sales@netscribes.comFollow us on:About NetscribesNetscribes is a knowledge‐consulting and solutions firm with clientele across the globe. The company’s expertise spans areas of investment & business research, business & corporate intelligence, content‐management services, and knowledge‐software services. At its core lies a true value proposition that draws upon a vast knowledge base. Netscribes is a one‐stop shop designed to fulfil clients’ profitability and growth objectives.Disclaimer: This report is published for general information only. Although high standards have been used in the preparation of this report,Netscribes is not responsible for any loss or damage arising from use of this document. This document is the sole property of Netscribes. and prior permission is required for guidelines on reproduction. LOCAL SEARCH  MARKET – INDIA 2012.PPT 14