Indian local search – insights from an insider

Warning: This post is not for the faint-hearted. Continue reading at your own risk.

2020. Somewhere in Bangalore – “Lets build a local search application, one with a difference …
For god sake, please don’t do that – no matter whatever your differentiators are. Not even if you created something better than the PageRank algorithm to rank local listings based on user queries. Not even if you have cracked the formula to “understand” tweety user reviews and not even if a VC firm were ready to cut you a 7 million dollar check*. I am not trying to play the devil’s advocate here; there are some solid reasons to justify -

  1. There is no real problem that today’s local search platforms solve: Proponents of the concept of vertical search engines might kill me for writing this. But believe me or not, in the world we live in, the answer to everything good or bad starts with Google. Majority of online users continue to Google for local information. Vertical portals are busy optimizing their site for search engines, so that they could appear at the top or at least on the first page for most of the user queries. All of them vie for your attention and try to trick you to their respective sites. What’s the point? There was a problem of finding local information, but Google has solved it (yes, the same text search engine you use for searching porn). 60-80% of the traffic for all local search sites comes through search engines (primarily Google). Majority of these users come to such destination portals for a need based query. They are not in a mood to explore your site. Infact, too lazy to even remember your domain name. So, even if your site had the best “tomato throwing application”, no one cares to try it out. The point is that local search companies today solve only one problem – SEO. Is that the next big thing you want to work on?
  2. There is no eye for detail: I have lost several heated debates with my friends on this topic. Burrp started out as a review platform for local listings. The reviews, because of strict quality checks, were excellent in standard and started getting a lot of mentions in the blogosphere. Taking cues from this, several other local search platforms introduced the ability to put comments (or reviews?) against listings. Can these comments compete with Burrp reviews? Ask this question to the tech and content team at Burrp and you’ll hear great reasons on why they couldn’t. But, who cares? Actually no one. Whether you had an organized representation of rich, high quality meta data or a simple paragraph of text for name-address-phone, it does not matter. Whether you had a  manicured and grammatically correct review or a tweety one liner comment, it does not matter. I am sorry to say this, but when it comes to Indian local search, richness in information is useless – it doesn’t bring you enough loyal (returning) users.
  3. Show me the money, honey: Did you say, ad revenues? Oh, lemme tell you – its a lot – enough to buy refills for your coffee machine and executive bond papers for your printer; and, if you got lucky with the traffic last month then you could afford weekend pizzas and beers for your team. Stop! No matter how hard Google and other ad networks have tried to serve “contextual ads” on your site, clickability is extremely low. It continues to be the silly impression game and unless your traffic is putting the likes of Yelp to shame, forget about it. Did I hear “a solution for small and medium businesses”? What does the “solution” do? Well, “it increases the visibility of a business”. Oh, I see. You know what – it is not the business that needs a solution; rather it is your business model which actually needs one. Efforts to sell such online solutions to local businesses go in vain. And rightly so, because there is no accountability matrix. Transactions is all a business cares about. If your platform doesn’t guarantee that, then its useless for them. Sounds like a conventional lead selling model? Yes, it is. Selling leads generated via their online and voice platforms is the primary source of revenue for several “successful” local search players. Do you want to be one of those? Nothing wrong, but, scaling such businesses is a nightmare – it means building a huge workforce, 1000′s of people as feet-on-street collecting data and several hundreds in your sales force. Ready for the “challenge”?
  4. Small market, multi-faceted competition: To an end user, local search portals, classifieds and yellow pages directory listing services – are all the same. A sane mind would disagree but try doing a few Google searches in some of the popular categories – eating out, movers and packers, property rentals, doctors and hospitals, banking and insurance services etc, you’ll find classifieds competing with local listings. No one’s complaining, because as I said earlier, name-address-phone is all that matters end of the day. Moreover, after a surge in the number of Groupon clones, group buying platforms, which drastically reduce the cost of availing local services, seem to be challenging the very utility of plain vanilla listings. Such is this local search domain, that competition might come from the unlikeliest of places. If your platform doesn’t offer enough value to the end user and businesses, be ready to die a silent death.

Does this mean that there aren’t any opportunities in the Indian local search space?
Was Google the first search engine? Didn’t most of us switch to Gmail? I simply meant “no more me too’s in the local search space“. Innovation would be the key. Local search has to go beyond plain information (no matter how rich/decorated your info is) – no one searches for local listings without a need. Does it not make sense to fulfill this need? I know you are ready with a lot of questions and apprehensions w.r.t the term fulfillment. But that is where the challenges and opportunities are – Can you let me look at the menu and place an order for home delivery? Can you book an appointment with that dentist this weekend? Can you send that courier guy to my home and pick up the consignment? … And yes, there is life beyond metros. People avail local services in tier 2/3 cities as well. Needless to say, the entire landscape is fragmented. Acquiring data and keeping it updated is a huge challenge for all these companies. Am I talking about a local listing GDS? Maybe … Focus on the “real problems”, there are many.

Who am I to give you all this gyan?
I have been in the Indian local search space for almost 5 years now. First with an IIT-Delhi incubated startup called Onyomo in 2006 and then at burrp for the last 4 years. While Onyomo was fully focused on local listings from different categories, burrp has been more of a review/recommendations platform centered around local listings – a desi version of Yelp in the US. Though most of my work revolved around technology and product, yet my inquisitiveness and passion for the domain made me a significant contributor to shaping these products the way you see them today. Besides working on these two products, I have significantly tracked the growth, product and people at competitors in this space – Justdial, Asklaila, Sulekha, Getit, Metromela, Yahoo Local, Google Local etc.

I have made an unbiased attempt to demystify some facts and myths. Would love to hear your thoughts. Coming back soon with another boring post. Thanks for reading.

* There is something with this number – $7 million. This amount has been the most frequently raised sum by a lot of companies in the Indian online space. I am trying hard to crack the underlying formula. Will share once done.

Note: This article has been cross posted by the Pluggdin team here – http://www.pluggd.in/local-search-space-in-india-challenges-and-myths-297/ … thanks guys, its humbling.

19 responses to this post.

  1. Posted by Vikram Saraswat on July 28, 2010 at 8:52 AM

    Bang on sir! Extremely helpful and insightful. Would like to know if the companies you mentioned are profitable. If yes, what kind of numbers? The GDS idea also sounds great. Any parallels?

    You rock, as always :)

    Reply

    • I am glad that you liked the post, Vikram. Not that I know of all the numbers you might be looking for, but I do have some knowledge. This is too public a forum to post those. Check your email.

      AFAIK, there has not been a single full-fledged effort to build a consolidated repository of local listings in India.

      Reply

  2. Posted by Manish on July 28, 2010 at 11:23 AM

    Hmm…nice and quite a thoughtful post. I can see the problem that you have explained not only with the local searches in India but also on overall in Indian web space. Everyone seems to be focussing on some way or the other on local business listings and somehow trying to make some money by getting some advertisements listed.
    What I see is too less advertising revenue and too many guys trying for a pie of that. Indian advertising industry still relies heavily on mediums like television, newspaper, magazies etc. for these mediums have much more penetration and are considered more trustworthy than Internet by a normal user.
    The other problem I see is most of the search and listing products don’t actually solve any of the problem that I face on a day to day basis. Further, accuracy of the data is also a problem. I search for a good restaurant in Gurgaon on burrp and when i call on the number given I have to bear the brunt of some disgruntled aunty irritated obviously by the number of calls she gets everyday for placing an order for home delivery. :D

    Reply

    • I understand your pain Manish. That is exactly what I was trying to explain – the “real problems” are still unsolved. Fulfillment of need is still a distant dream.

      Reply

    • Posted by Anand on July 28, 2010 at 7:41 PM

      @manish – can you please tell us which business in Gurgaon are you talking about? We’ll ensure that the correct numbers are listed. Thanks in advance.

      Reply

  3. Well said, Avlesh!
    What I personally feel about Indian Local search startups is that they lack innovation.
    Basically they fail to evolved from ‘just another local search engine’ to a meaningful location based service. The potential of local (location based) online services are huge and there are tones things of still to be done on this space.
    The actual problem is with copy-cat-innovation one cannot go anywhere.

    Reply

  4. Agree with 1, 2 and 4. Partially with 3.

    -Naman
    Started my startup career as intern with Onyomo.

    Reply

  5. Posted by Sumit Jain on July 28, 2010 at 2:46 PM

    Bang on !!!

    Reply

  6. Posted by Vikas Tantia on July 29, 2010 at 12:56 AM

    A true eye-opener for all those blindly mesmerized by the Local Search Space!
    It indeed requires audacity to question the loopholes of the industry u urself belong to…
    but glad that u did it …. and did it really very well !!

    I just hope that this makes their genre think about bridging the divide between the digital n actual !
    Keep writing … its a pleasure reading such radical blogs.

    Reply

  7. Posted by Guru on July 29, 2010 at 10:41 AM

    This is not at all true that local search engines should not be built.And No Google has not solved all the problems.When you go and search for say South India restaurants says a Google might give you some name of the restaurants which is near at maximum.But how on earth will it know how much is money you would want to spend.You might have Rs10/- or Rs100/-.Enter Facebook which wants to know what you like and how you behave.Enter the same query in Facebook,the chances that you get a better results(assuming you have shared more about yourself) are better.And this is the reason Google is afraid of Facebook.

    Reply

    • IMHO, buying Pizzas is entirely different from buying mobile phones.

      Reply

      • Posted by Guru on July 29, 2010 at 11:36 AM

        The point I am trying to make is local search is not dead.And a lot of personalization is required.You just need to have a product which does that well.Face book is one of them.

        The fact is we also need Indian Social Networking Site which understands and gives solutions for Indian culture.IMHO,To say that Google and Facebook have solved all problems is going a little over-board.

        Reply

  8. Excellent views Avlesh. I totally agree with the fact that there is very little to be done in the conventional directory assistance service. I agree that Justdial doesn’t offer a great experience online and on voice calls. But it does not matter. Marginal improvements in those areas would only bring in a small pie from the already fragmented market.

    The GDS idea you wrote about is indeed promising. Data, as always, has always been a pain point. We should get talking.

    Reply

  9. Posted by Sudarshan HS on December 9, 2010 at 10:34 PM

    Thanks for sharing your insider’s view, Avlesh.

    Very good points.

    Reply

  10. You mentioned that “Innovation would be the key”. Completely agree. Today no local search or Google can provide the answer to the query “Restaurants WITH SWIMMING POOL in Mumbai” or “Marriage Purohits in Chennai”. Please visit http://www.hudku.com. We are making an attempt to answer such kind of queries and also are trying to address the complete local search spectrum which is not just limited to searching Business Listings.

    Reply

    • The question is does one really need a search engine other than Google for “restaurants with swimming pool in mumbai”? Most vertical searches today do that with the help of filters and if, as a vertical search portal, your pages were well designed for SEO, Google would do a good job of suggesting your site for the same query. Users would type such queries on Google and not on vertical search engines no matter how hard you have tried to crack the semantics of such searches.

      I hope that made some sense (I read it and to me it does not :D). Good luck w/ Hudku, Arun.

      Reply

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