Connecting to Win

LinkedIn is relying on localisation and newer target groups to propel itself in India

RA Chandroo

Three phases. Precisely three phases define LinkedIn’s journey in India, according to Akshay Kothari. In 2016, his leadership team in the US sent him to India, to take over LinkedIn’s India operations. Kothari’s first phase started in 2009, when LinkedIn already had 3.5 million subscribers. Back then, they just had a sales office. 

In late 2012, the company entered its second phase, when they set up a research and development office in Bengaluru, which focused entirely on technology building.  About a year ago, LinkedIn planned to localise sufficiently and open up new frontiers in the Indian market as part of phase three. “We decided to build products, essentially made here and adopted for local use case,” says Kothari. Since 2009, the subscriber base has touched an impressive 42 million; a more than 10-fold jump in eight years. The company rolled out three new products for India last September. First it launched LinkedIn Lite, a stripped-down mobile version of its website to make it easy to access in areas with poor connectivity. This helped a great deal in improving its accessibility. Then it launched Linked Placements that helps students in colleges and universities across the country get their first job and introduced the LinkedIn Starter Pack, which offers hiring, marketing and learning solutions targeted at small and medium enterprises (SMEs).

Currently, India is LinkedIn’s second largest subscriber base after the US where it connects over 133 million professionals and the fastest growing market for the company. In the Asia-Pacific, China follows India with a total of over 31 million members. LinkedIn which focuses mainly on knowledge-based professions and white-collar professionals believes it still has a long way to go. “We are 40 million members in India but we still have a lot of room to grow. In our internal calculations, there are about 60 million professionals and 25 million students in India. If you add those up, we are about half way there,” says Kothari. But, this is not enough. Recently, LinkedIn has its eye set on blue-collar professionals in India, after the Indian government and parent company, Microsoft encouraged them to look at this group. 

India calling
For Kothari, India was more a destination for his one-year break that he was planning to take. But when the leadership team came to know about his plans, they made him an offer he couldn’t refuse — a chance to head the India operations. So after a 12-year stint in the Valley, Kothari landed in India. Few days into his India stint, he realised high-speed Internet connectivity was a luxury for Indians even in the metros where the site wouldn’t even load at times. So accessibility was a challenge at times. Kothari and team got cracking to solve the problem. They built LinkedIn Lite — an India specific product, targeted towards tier III and IV cities to provide a stable experience to existing users on slower networks. “It was rebuilt for mobile website. We have reduced the page weight by 80%, making it less than 100 kb. Even with a 2G network it loads under five seconds. Since April, it is available across India,” says Kothari. He feels that their Lite version has worked for them from not only the speed standpoint but engagement as well. “People engaged a lot more with our website and their session depths are a lot better. The drop off rate was a lot less.” However, the bigger challenge for the team is to take Lite beyond India, for other emerging markets to benefit.   

Dr. Moorthy K Uppaluri CEO, RandstadA critical part of LinkedIn’s India growth strategy is to get about 25 million college students in India on board through placements.com. Any student who applies, takes a standardised online test (free of cost as of now) to apply for jobs across the country. The standardised tests create a level playing field irrespective of the college since candidates are only hired based on their performance in the test. “We got 2 million applications since its launch, which was significantly more than what we expected,” claims Kothari. 

Sreedhar Prasad, partner, KPMG says, “Graduate students are a large, untapped market. Increasingly, in tier II cities MBA students are joining LinkedIn but engineering, BBA, BCom graduates are not on LinkedIn yet.” LinkedIn is targeting third and fourth year undergraduate students, looking for a job. 

SMEs are also on LinkedIn’s radar as they scale up their presence in India and they are looking at targeting both startups and family businesses with their Starter pack. “The effort is more about educating SMEs and start-ups what can we do for them. We can help them, as they are scaling from 10 to 10,000. We want to step in early, to scale with them,” says Kothari.

Vivek Bhargava CEO, Dan Performance Conventionally SMEs have not been great adopters of digital technology. They depend on contractors for manpower needs. But Kothari says that even small businesses are starting to realise, instead of paying contractors for one or two hires, they can get a powerful product like LinkedIn recruiter for their entire recruitment. And once the company kicks off its blue collar intiative, they would have a more relevant offering for SMEs.

LinkedIn has three major revenue streams. First is talent solutions, to help companies hire, second is premium subscriptions, and third is advertising/marketing solutions. At a global level, LinkedIn garned a revenue of US $2.7 billion in the first three quarters of 2016. Talent solutions contributes more than 60% to LinkedIn’s global revenue, followed by Premium subscriptions, and finally ad revenue. In terms of contribution by the three streams, LinkedIn India’s revenue mirror the global pattern. 

Linkedin India’s contribution to global revenue may not be much yet, but it is one of the fastest growing across the world. “It has amongst the best contribution margins in this continent,” says Kothari without revealing how much its India operations are contributing to global revenues. “Last year the focus was on consumer engagement. This year the focus is on growing enterprise revenue faster,” says Kothari. 

Sreedhar Prasad Partner, KPMGAdvertising is the third largest revenue churner for LinkedIn but one that has a lot of revenue growth potential. Kothari feels he will be thrilled if ad revenue moved up, but their model is centered at professionals and jobs for now. Companies like Blackrock, HCL, ICICI Bank etc. use marketing solutions on LinkedIn. Usually, there are a few text ads, some banners but mostly they are in the form of sponsored updates and content marketing. Vivek Bhargava, CEO, Dan Performance, says, “LinkedIn is pretty unique in where it stands in the B2B domain. And its advertising platform and offering has evolved to match that need. It has the who’s who of India on board, including C-Suite executives. So targeting them and advertising to them directly makes sense. Additionally, LinkedIn enjoys the backing of Microsoft giving access to its respective platforms.” He feels that SMEs offer LinkedIn opportunity in one more way. “It can create inroads into SMBs advertising which is a space that remains untapped. 90% of Google revenues come from SMB advertising,” says Bhargava. 

The network effect
LinkedIn counts on the combination of two things — power of data, to help source candidates and social communication, to improve conversation rates.  It claims to have deep identity data which it can leverage with recruiters. “Paper resume only tells me very little bit about a person. We live in a world today where things are a lot more dynamic. I am much more interested in how this person has worked with other people, and how this person thinks, LinkedIn can provide that based on articles shared, published, and connections made,” says Kothari. And their customers seem to agree. “LinkedIn Recruiter is a versatile platform for dynamic hiring needs. We find it very adaptive, responsive and brings an easy connect of the recruiter with prospects,” says Rajesh Padmanabhan, Director, Group CHR Welspun India.  

LinkedIn’s data must be better than plain CVs but some experts feel some conventional methods of verification are still required. Dr. Moorthy K Uppaluri, CEO, Randstad India accepts that tech platforms have disrupted HR space. “Such data is in raw form. But it becomes important to curate data and make information more credible. Somebody has to validate and curate those claims and present to the client in segmented fashion,” says Uppaluri. “Tech is crucial but we need tech plus touch for complete solutions. So the validation of data is to be done by conventional connects and phone calls.”  

For LinkedIn the problem is primarily solved because it is a network. The verification for all the job postings and positions are done on the network itself, through the connections and cross-connections. It becomes difficult for candidates to fudge their credentials because of the cross-connections. 

Recruiters can look for references beyond the names disclosed by the candidates by going through his profile. One of its advantages it also has over other portals is that it allows head hunters to reach out to candidates who are not actively looking for a job as well.

New horizons
In February 2017, Microsoft CEO Satya Nadella flew into India and launched a flurry of projects, including ‘Project Sangam.’ The project aims to connect skill learning programs directly with relevant jobs, by leveraging the power of LinkedIn’s extensive job search platform via Aadhaar cards. Kothari doesn’t share much details about the product. “We are working closely with Microsoft and we are a few months away from giving out details on how product will be deployed.” 

Uppaluri of Randstad feels that tapping blue-collar workers from any platform has to be very simple and inclusive. “These guys (blue collared) may not be very educated. How will I get myself enrolled, if I am a mason or a welder? Networks need to become inclusive. Simple voice based interface, supporting local languages will have to be developed. Whatever you and me are able to do over LinkedIn, others should also be able to do,” he says. The number of urban blue-collar workers in India has been pegged at 97 million according to a report by Goldman Sachs.

Kothari feels they are moving in the right direction to connect all the workers but the revenue expectations have to be realistic. “We cannot suddenly expect India to drive ten percent of our revenues. We have to benchmark ourselves to what percentage of revenues for other tech companies are driven by India. If we look at that LinkedIn is doing better,” says Kothari. Apart from scaling its presence in India by launching products for the local market, next on the agenda for Kothari is to take these three products global. For Lite can be launched in developing countries which face similar connectivity issues or Placements in South East Asia and South America. The plan is continue to build products in India and then take it global. So in that sense India will continue to be important for LinkedIn apart from being its fastest growing market. For now it does seem like Kothari and his team are connecting the right dots.