Ladies and gentlemen, on behalf of IndiaMART InterMESH Limited, I welcome you all to the company's Q2 FY 2024 earnings webinar. As a reminder, all participant lines will be in the listen-only mode, and there will be an opportunity for you to ask questions after the presentation concludes. Joining us today from the management side, we have Mr. Dinesh Agarwal, Chief Executive Officer, Mr. Brijesh Agrawal, Whole-time Director, and Mr. Prateek Chandra, Chief Financial Officer. Before we begin, I would like to remind you that some of the statements made in today's conference call may be forward-looking in nature and may involve risks and uncertainties. Kindly refer to slide number three of the earnings presentation for the detailed disclaimer. Now, I would like to hand over the call to Mr. Dinesh Agarwal for his opening remarks. Thank you, and over to you, Dinesh.
Thank you, Kshitij. Welcome, everybody. Welcome to IndiaMART's Q 2 FY 2024 earnings webinar. We have circulated our earnings presentation about an hour ago, which is available on our own website, as well as the stock exchange websites. I'm sure you would have gone through the presentation, and I would be very happy to take any questions afterwards. I'm pleased to report that IndiaMART has delivered 28% year-on-year growth in collections to INR 337 crore, and 26% growth in deferred revenue to INR 1,244 crore on consolidated basis. Revenue from operations has also grown by 22% to INR 295 crore. Total traffic grew to 288 million, and unique business inquiry grew to 24 million respectively, representing a growth of about 10% and 6% respectively.
Our total paying subscribers, total paying subscription suppliers grew to 210,000. As communicated in the previous quarter, we did a price change in our Silver subscription on May 15th, which generally has a temporary impact for two quarters on our new customer acquisition. In addition to the price increase impact on the gross customer addition, we also have seen more than anticipated churn on the increased customer base in the Silver bucket. As a result, our net customer addition was limited to only 2,000 in this particular quarter. As the impact of this price change stabilizes and the improvement in churn happens, we will come back with the guidance on the net customer addition. While the customer addition has been slower than anticipated, we are confident of this similar collection and revenue growth for the next two to three quarters.
On the people front, we have added 234 employees, primarily in the client servicing team, to take care of the renewals and upgrade of the existing customer. We'll continue to make these investments in strengthening our organization to leverage the growth opportunities. Now, I will hand over the call to Brijesh to update about Busy Infotech. Thank you, and over to you, Brijesh.
Hi, good evening, everyone. Busy has done a net billing of INR 14.6 crores in this quarter. This represents a year-on-year growth of 38%. The revenue from operations have grown by 24% year-on-year to INR 12.9 crores, and the deferred revenue has grown by 49% to INR 38.1 crores. The EBITDA for the quarter is at INR 1.7 crores, that represents a margin of 13%. The net profit for the quarter was INR 2.5 crores. We also generated positive cash flows of INR 2.5 crores during the quarter. There were a total of about 8,000 new licenses that were sold to customers, taking the total licenses sold count to 348,000 at the end of September.
The overall performance has been in line with our expectation and also our goals of increasing the growth rate in this financial year. And I think we are on the path of realizing the goals of increasing the growth rate that we set at the beginning of the year. With this, I'll hand over the call to Prateek to discuss about the financial performance.
Thank you, Brijesh. Good evening, everyone. I will take you through the financial performance for the quarter ending September 2023. Consolidated collection from customers and revenue from operations grew by 28% and 22%, respectively, to INR 337 crore and INR 295 crore. The deferred revenue for the quarter stood at INR 1,244 crore, an increase of 26% on the year-on-year basis. IndiaMART's standalone collection from customers for the quarter were at INR 321 crore, and revenue from operations stood at INR 281 crore, registering a year-on-year growth of 27% and 23% respectively. A growth in revenue was primarily driven by a 12% increase in paying subscription suppliers and 10% improvement in ARPU due to higher monetization.
Deferred revenue were at INR 1,205 crores, representing a year-on-year growth of 26%. EBITDA of IndiaMART's standalone business stood at INR 81 crores, representing a margin of 29%. Margin had increased from 28% margin in Q1 this year. Consolidated EBITDA was at INR 80 crores, and consolidated net profit was at INR 69 crores. Consolidated cash generated from operations was INR 102 crores.
...As we had completed the buyback in this quarter, leading to a total payout of INR 620 crore, which includes buyback amount and the related taxes and expenses, consolidated cash and treasury balance stood at INR 1,910 crore at the end of this quarter. Thank you very much. We are now ready to take any questions.
We will now begin the Q&A session. If you wish to ask a question to the panelists, kindly raise your hand and allow camera and microphone access. Alternatively, you may type your question in the chat menu and we will revert on it. Please restrict to two questions so that we may be able to address questions from all the participants. We will wait for a couple of seconds while the question queue assembles.
First question is from the line of Vivekanand from Ambit Capital. Hi, Vivekanand. Please go ahead with your question.
Hi. Am I audible, Aditi?
Yes, Vivekananda, you're audible.
Yeah. So, my two questions. The first one is on the collections in the standalone entity. The growth was 27% faster than what IndiaMART has witnessed in the last several quarters. So, I wanted management commentary on the thought process and outlook as far as collections are concerned. Also, if you could call out any one-offs or any other element related to long duration customers renewing during the quarter at higher price levels, that would help. Second question is, if you could give us an update on the churn levels across Silver annual, Silver monthly, Platinum, and Gold, that would be helpful. Thank you.
Thank you, Vivekanand. So on the collection front, I think we have been guiding that we should be. We always target about 25% or so. And in the past, because we have now accumulated customer base over the last seven, eight quarters, and those customers, some of them have graduated to a higher package and some of them have graduated to now second year also. That may be leading to the. There is no one-off here, because as I said, we are very well diversified across industries and across the customer. No single customer, no single industry, no single city contributes any large amount. So this 26%, 27% could be a one or two quarter thing.
I think the collection, as I said, we are confident that over the next two to three quarters, we should be able to maintain our collection growth in excess of 22%-23%. That is what I've been guiding. Now, coming to the churn side, on the Platinum and Gold customer, which is about 50% of the customer base now, and contributes about 3/4 of the total revenue contribution, that continues to remain healthy at 1% per month. So the churn in the top tier of the customers, Platinum and Gold, is continued to be very healthy and which contributes about 50% of the customer base and 75% of the revenue. While the Silver monthly and Silver annual churns have deteriorated, because, probably because of the customer base or other things.
So Silver annual customer has moved from earlier, about 2%-3%, to now close to 4% per month. And Silver monthly, which used to trend at around 5%, 6%, now has gone to 7% or so on the monthly basis. So there we are seeing churns to be higher than usual, pre-COVID churns. Thank you very much.
Okay, thank you. That was helpful. So if I look at the collections on a pre-COVID versus current quarter CAGR, it appears to be a 17% CAGR. I'm comparing it with Q2 FY 2020. So is this the number that you feel in the long run should trend upward further, or am I reading the numbers wrongly or the commentary wrongly?
Right. I mean, last, because FY 2021 and FY 2022, we had so many ups and downs in terms of customer not being there, lockdowns and everything. So I don't know what kind of CAGR from that period would be helpful. You know, I think it will be a longer term CAGR, has been 21% CAGR, and a nearer term CAGR, I mean, quarter-over-quarter, sometimes around 25%, sometimes around 22%, and sometimes around 27%. So as long as, You know, the customer base has grown significantly in the last six, seven quarters, which is now resulting into the collections, better collections, and that's been the trajectory ever. So I think, upwards of 20% it should be possible.
whether it will be 17 or whether it will be 27, that's difficult to comment on a longer term basis.
Yeah. Also, Vivekananda, if you, you know, also see in the consistently in the last four quarters, our standalone collections growth have been northwards of 23%-24%. So, so it's not like, let's say, one-off in the scenario in this particular quarter, it has been consistently higher, on more than 23%-24% for last four quarters.
All right. All right. The last follow-up, is there any specific reason apart from the price hike that is causing this high churn? Or have you tried to identify what is causing this, and what are the steps that you are taking to mitigate or perhaps bring churn back under control, given that it is now weighing on your net adds and adding to so much uncertainty that you are unable to give a guidance even on the net adds?
Yeah. So, see, net adds has two components. One is the price, gross adds, and the price impact is mainly on the gross adds. The price impact will not typically have a huge impact on the net adds, on the churn side, because currently it's only been three, four months of the new customers being added at the new price point. Rest old customers are still at the old price point. So while typically, it takes anywhere between three to six months to stabilize on the sales team and digest the price hike, I think there has been some holidays also, and it has been taking longer for us.
So let's say, over the next quarter or so, if we are able to fix our gross add correctly back to the similar level as we had before 15th of May. Now, coming to the churn side. The churn side is, you know, not easy to answer in one line, because there has been many differences. If you see over the last two years or so, our Tier 3 , Tier 4 customers have also increased as against metro customers. We have also expanded, getting customers into many more categories than the customer concentration. However, it will still look 1.1% only, but that 1.1% is also into some of these industries which may not be very conducive for current IndiaMART platform.
So we will go back on the churn side, and as I said, those customers who have used platform nicely, those who have migrated to Gold and Platinum, they continue to engage with the platform better. You can also see that customer engagement on the platform, which is available on, say, CRM page, Lead Manager page, probably is one of the highest, with 123 million replies and 25 million call back. So the customer engagement is also high, and everything is also high. We need to probably go back to our drawing board to see which all places we are acquiring customer. Another thing is the vintage of the customer. Another thing is we have built, you know, client servicing team in the last 18 months.
As you can see, the number of employees addition in the last 18-24 months has been too much. They also are newer into the system. So it could be there could be competition also within our own customer base that might be causing. So I think it's a difficult problem to solve, and we have faced this problem earlier also. I'm sure we will go back to the drawing board and see, try many different things and come back to you sooner than later.
Thank you for the elaborate explanation, and all the best.
Thanks, Vivekanand. Next question is from the line of Nikhil Choudhary from Nuvama. Hi, Nikhil, please go ahead with your question.
Yeah, thanks for the opportunity. I would like to probe further what Vivek has asked regarding the churn and lower subscriber addition. Sir, this is not just the one quarter we have seen lower subscriber or lower paying subscriber addition. It's been like in the last four, five quarters, except for one quarter, our subscriber addition has been lower than 8,000, which was our initial guidance of adding 7,000-8,000 paying subscribers every quarter. Even in terms of engagement, what you mentioned, business call and query, that number remained more or less stable, even down from the COVID peak, right?
So, just want to understand, to contain the churn and especially growing the paying subscriber, what are the change in strategy we are doing to make sure the growth comes back there? And just, one follow-up on that is, are we looking to maybe roll out the increase in price for our existing subscriber, which is lower than earlier planned, given the higher churn we have seen for new subscriber?
So, first of all, on the 8,000 target, I think, yes, you are right. We have missed this in three quarters now, out of the seven quarters that we have had, post our total thing. Now, second part is the whether we are going to roll back the new client acquisition prices. No, we are not, because it is not the, the churn is a different issue, and the new customer acquisition is a different issue. These, as I said, these prices were rolled, were reduced, especially during the second wave of COVID. When we saw that the people were really worried and so we dropped the prices by 25% or 20%. Now we have gone back to our pre-COVID prices.
So we haven't changed anything on the entry-level prices in the last three, four years. So we are not going to roll back. On what strategies are we going to work upon to reduce churn, whether we will be able to increase the buyer base, repeat buyer base, reduce some of the non-performing industries, non-performing cities. I mean, I think all of them. Instead of just saying that, have we been able to prioritize one over the other? No.
I think all these four, five things that we need to work upon, and maybe start recalibrating our client acquisition strategy, with how much to acquire from Metro and how much to acquire from Tier 4 , how much to acquire from one industry versus how much to acquire from another industry, how much to acquire from one industry in annual mode versus how much to acquire in the monthly mode. So I think all of that, I mean, churn containment is the biggest issue for any subscription-based marketplace. You know, there is no one single answer, and there is no one, two, three prioritized answer.
We will have to go and do things in all five directions, and each one of them will probably work 0.25%, 0.25% in our favor in the times to come.
Sure, sir. Very helpful. Just, last one from my side. In terms of employee addition, we have again started adding employee aggressively after, you know, slowing down for a quarter or two. Clearly, it might be to address the churn, but that is putting pressure on margin. So just want to understand, like, vis-à-vis your earlier guidance of seeing, you know, incremental revenue or deferred revenue on much higher margin, how you are seeing maybe even directionally margin going forward? Thank you.
No, but where are you seeing the margin? So margins are already 29% this quarter for the standalone business, and we will continue to maintain this 28%, 29%, 30%, whatever, ±1%, but I think in that range. I cannot give you exact percentage, but I think. And Q4 is always a low margin quarter because there is upfront cost of collection that we get. But other than that, I think margin has been consistently maintained and also rising. Maybe you are looking at the consolidated piece, where we are also investing behind Livekeeping. We are also getting you know Busy. We are also getting P&L losses from our associate companies.
So those might be the cases, but, on the standalone basis, the margins are intact.
Sure, sir. Very helpful. Thank you.
Thanks, Nikhil. Next in queue is Swapnil from JM Financial. Hi, hi, Swapnil, please go ahead with your question. Also, request if you can put your camera on. Thanks.
Hi, thanks for the opportunity. So a couple of questions. First, on the traffic side, I think we have seen some decent improvement in traffic on a YoY basis, and that has come after a few quarters where we had a flattish kind of trends, right? Any specific reason you want to call out as to why how this traffic improvement has been achieved, and how should we see these trends moving forward as well? That's one. And the other question is on the margin side. So, if I remember your commentary from the last quarter, you had mentioned that the margins would over this FY 2024 quarters, it would move towards 30%, at a consol level.
Now, obviously, that has not-
I don't think I ever said it at a consolidated level, and I can never say it, because at a consolidated level, if we are investing INR 750-odd crores in accounting business and another INR 250 crores in the other businesses, at a consolidated level, those are not possible to be predicted.
Okay, let me rephrase that. So how should one look at the margins then, at a consol level and a standalone level separately? Obviously, your standalone margins are improving, no doubt about that, and they are moving, inching towards 29% now. But since you will continue to invest in your accounting businesses, is there any guidance that you would want to give or is there any way that one can estimate that you would like to help us? Thank you. Those were the two questions.
Unfortunately, no, because many of these are minority investments, and their boards run independently on how to manage the growth at Vyapar and how to manage growth at, you know, industry buying, or how to manage growth at M1xchange. And we get profit or loss coming from them, and many of them get revalued also time to time. So it is very, very difficult to predict a diversified business consolidated margin at an early level like this. On the traffic side, yeah, Prateek wants to add something on that.
Sorry, I was just saying that if you see, still, the-
Slide number 70.
No, this is reference slide number 70 of our investor presentation, which talks about EBITDA of each of the business lines, which gives a very clear visibility about the EBITDA of IndiaMART and EBITDA of the newer initiatives, specifically, if you say, Busy and Livekeeping are the other ones. So these, these numbers are fairly small in the overall context, though in the. I n terms of percentage margins.
In terms of percentage margins, it may have some impact because the revenue from these businesses gets added, and the bottom line, you know, doesn't get added up there in the terms of, the profit. So therefore, in the percentage value it looks, but if you see in the absolute terms, these numbers are fairly small as compared to the EBITDA that we generate at the IndiaMART level.
If I can just add to that, is there any target spends that you have in this new businesses? Yearly spends that you want to would do, or a cap beyond which you will not invest?
No, sir. As and when we get the right opportunity, we will invest. And, as we have said that, we will probably stay away from a very high cash burn businesses being acquired at a console level. We will try and see businesses which are either low cash burn businesses or which are closer to breakeven. And Busy is the one which is closer to breakeven business. I-
Profitable.
Currently profitable. But my, my view is that it is neither highly profitable nor losing money. On the other hand, Livekeeping, we are investing. We know for sure that we will probably end up investing INR 1 crore a month there, and that's the current target. On future, what will happen is, anything that happens, I will come back and tell you. But as of now, these are the two things which are happening. Whenever new things start, we will come back and tell you.
Got it. And if you can answer that, on the traffic side question?
The traffic side depends a lot upon many things. So, many times, changes in the Google search algorithms, you know, focusing on desktop versus mobile, and things also help, because currently we do not do any advertising. So I cannot directly attribute it to either any advertising or any, you know, email marketing that would have worked significantly higher than the last quarter. While we have seen the traffic in general improving, and so we continue to work on UI, UX, and you know, various search parameters. However, whether this is going to be a sustained trend, that I think we will know only after another quarter passes by or so. Another part is the content aggregation that we do consistently.
So as we have added about 60,000 customers in the last six quarters or so, those 60,000 customers, content is also useful enough, which might be adding to this additional traffic. But whether it will sustainably hold or whether it'll be, you know, start to increase further, that we can only comment after two quarters or so. I think a better number would be to also look at the unique business inquiries. Because sometimes what happens, the traffic also ends up increasing if somebody starts to scrape your site. So, so I think the better metric would be the unique business inquiries, which has also grown, but it has grown by about 6%, 7% or so.
Got it. Thanks for taking my questions. All the best.
Thanks, Swapnil. Next question is from Mr. Mihir Damania. Hi, Mihir. Please go ahead with your question. We'll take question from Mr. Manoj Doshi. Hi, Manoj. Yeah, Manoj, we can hear you.
Manoj, you need to unmute yourself, please.
Can you hear me now?
Yes, we can hear you.
Hi. Is it fair to assume that the employee addition will be sort of not as high as we are having from last two quarters, given that our subscriber addition is not so high?
Yes, it is fair to assume. I think, it is fair to assume that.
Okay. Thank you.
We request participants to raise their hand to ask question from the panelist. Next question is from Mr. Manish Gupta. Hi, Manish. Manish, please unmute yourself to ask the question.
Yeah, thanks for the opportunity. You know, you mentioned that Gold and Platinum are about 50% of your customers and about 75% of your revenue. So I was just wondering whether the growth of customers and the in the Gold and Platinum is a better metric of how the overall business is progressing vis-à-vis churn in Silver customers. Because I would imagine that if Gold and Platinum are 75% of revenue, they actually might be a significantly larger in terms of percentage of profit, because the gross margin on this business might be higher than on the Silver customers. So just wanted to understand that would the high churn rate in Silver, et cetera, really bother you? Because bulk of your revenue and profit is essentially coming from the Gold and Platinum customers.
Yeah, Manish, that is true, but that is also depicted in the historically in the top 1% and top 2% and overall ARPU. So if you see the overall ARPU being INR 54,000, while the top 10% ARPU being INR 250,000, accounting for 46% of revenue alone. So if the top 10% of the customer itself, accounts for 46% of the revenue, that, that already gives you that, feel that 50% of the revenue is coming from top 10-12% customers. And that top 10-12% customer is not also, small in number. They are 22,000 customers, 21,000 customers. So you can't say that, okay, your dependency is only on 10, 10 customers accounting for it.
It is not 10 customers, it is 20,000 customers at INR 250,000 average revenue. However, for a freemium marketplace like this, it is important that you continue to have a long-term growth on the silver bucket, because that silver bucket ensures your leadership on the market in the space and builds the network effect. While on the financial metric, I think the gold and platinum will probably derive, you know, for different marketplaces different or for different SaaS businesses different, but they will typically derive anywhere between 50%-75% of the revenue, and maybe more than 100% of the cash flow. Because the whole bottom of the pyramid is to maintain leadership and create that network effect.
Even the freemium model is also for that. They don't contribute anything onto the revenue, but we do spend such, you know, sizable amount of time, money, energy on maintaining and adding freemium customers. Yeah.
Yeah. Very clear. Second question was that, how do you track a share of your share of competition? Because it's not easy to define competition in this space.
So, I mean, if you're directly defining competition, direct competition, which offers a very similar business model, has a very large overlap with our kind of customers. We have always said Trade India and Exporters India are the two which are the nearest one. And, you know, I think both of them are private limited companies, so they file their, you know, annual returns with the MCA, and that data is available, and we track that closely, how we are doing. And their traffic data is also available. So, that is, you know, purely doing the similar business model. Now, then there are indirect business models, where, you know, we might be having 5%-10% overlap with different businesses.
This 5%-10% overlap could be with Google, 5%-10% overlap could be with JustDial, 5%-10% overlap could be from Amazon also. And I'm talking this 5%-10% overlap on the buyer side as well as on the supplier side. Now, so on that side, it is difficult to define a real market share. But on the like-to-like basis, I think it's very clearly we used to probably have 60% market share at the time of the IPO. We today, we might be having much higher market share than the IPO time.
Okay, very clear. And my last question is that, you know, a decade, you know, very long term down the road, do you see any chance of being able to monetize a little bit on the buyer side? I mean, we have 182 million registered buyers. There is over 50% repeat buying purchase. Do you see any opportunity where you could, maybe a decade down the line, ask a buyer to pay a little bit just to participate on your platform?
So let's say two things, you know. So total, 182 million people have sent an inquiry or made a call from this platform over the last decade or so. However, every year, last year or so, we have 37-38 million people who have done that. Even that number is large enough to be monetized. That monetization is possible in two, three ways. People have done that in... So if you get into an e-commerce mode, where you are able to charge a convenience fee for buyer for every transaction or charge a commission from a seller. We, generally, we don't intend to necessarily promote a high commission marketplace. We take pride in saying that we are a zero-commission marketplace. Maybe 1%-2% commission for facilitation is possible.
Nobody in the world has proven that big time. On our payment subsidiary, whatever revenue that we generate, that's all of it, 100% of it from the buyer, buyer monetization, because we only charge buyers. For the sellers, yeah, I mean, the buyers pay for the credit that they avail through credit card or other methods. Tomorrow, whether we'll be able to find a product like Amazon Prime or Zomato Gold, we don't know. We haven't seen that happening much in the 1688 in China. But yeah, you never know. Thank you.
Thank you.
Thanks, Manish... Next question is from the line of Mr. Rahul Jain, from Dolat Capital. Hi, Rahul. Please go ahead with your question.
Can you guys hear me?
Yes, we can hear you.
Yeah. Thanks for the opportunity. Basically, wanted to understand slightly more in terms of what we are doing to increase the ARPU and the, at the top end of your subscriber base. Where possibly the increased activity on the digital side may be, you know, helping them to value our platform and proposition slightly better. So we've been seeing that ARPU number going up, but if you could share some of the inputs in terms of what we are doing to ensure that we are able to get more and more from that top 25,000 customer and beyond.
Thank you, Rahul. So, historically, I think I've talked about this, maybe two years ago in the con call, but not recently. So historically, we have had, you know, a similar, all category, all, all cities or all location-based pricing for Silver, Gold, Platinum, all customers. So our leading supplier or our star supplier packages used to be, agnostic of the number of categories or number of locations, as many as you deal into. Over the time, we have moved, to limiting the number of categories as well as increasing the, monetization. Then, I think we moved to, location and category combination. We are now in the process of moving to purely and purely category-based, pricing. Category-based pricing framework.
So instead of you buying a X number of category, you buy one, one category separately. And that itself actually reduces the overall input entry price point, but at the same time gives us higher ARPU for customers who actually use that properly. So effectively, if you see, if you see the ARPU of top 10% customer, that has grown significantly over the last many years. And if you actually subtract, most of the ARPU gain has come in typically from top 10% customers only. I think that's already built in, and these are the two, three initiatives that we have taken.
So when you say, categorization, is there some focus on, keyword monetizations also?
What?
Keyword monetization.
When I say category or when you say keyword, they are interchangeable. So, you know, our categories are so micro that they are, you know... So cotton shirt would be one category, full sleeve shirt would be another category, designer shirt would be another category. So these are, these are very similar to keywords and categories. So we don't sell categories separately and keywords separately. So when you buy a particular category, you get that keyword also as a search keyword.
Right. So players with more number of SKUs and scale player are eventually the player where the ARPU monetization could be far superior?
Well, yes and no, because it is not—I mean, in fact, if you have less number of ARPU of SKUs or categories or keyword—In fact, it might be more useful for a customer like that to use an online platform, because here the targeting is very accurately possible. While for a brand or for a customer who owns multiple keyword and multiple category or multiple SKU, there might be other revenues of promotion. So, like, traditional dealer distribution or going to a slightly mass media of advertising. But if you have a very unique key product and unique pricing, a unique location targeting, then I think... So it helps in both the cases, I can't say that one over the other.
Right. And last bit on this, categories that we defined, some 97,000 odd category that we have. Is, is there a way to understand that, of course, many of these categories are subcategories within a particular domain. So which categories, how many of these 97,000 category you see India has a significant TAM, any threshold if you want to draw and say that, okay, a category is defined category? Of a significant size, let's assume if it has INR 100 crore market in India or whatever way you want to define it.
So one way to look at this is instead of looking at 100,000, just look at these 56 industries segment that is given here, and I think we have already given some 48 industries here. So out of these 48 industries, it is clearly visible that 8% is construction, building, raw material, industrial plant, machinery, equipment, and like that. And, you know, if our total, you know, total GMV is anywhere between 0.5% to 1% of GDP, that makes it about, you know, $15 billion-$30 billion. Now, based upon that, even one percent of share on that market makes it INR 150 million market.
So, given that the overall B2B market size itself is more than a $1 trillion market size, defining, you know, our TAM per category is slightly difficult and slightly too big. You know, for us, we are, we are still a very... I think, you know, scratching the surface, or we-- I don't think IndiaMART ke hone se ya na hone se, you know, kuch bahot major farak abhi padta hai. But can it, can it make a lot, lot more difference to the economy in five, 10 years? Yes.
Understood. Understood. Last bit, if I can. Basically, this churn issue that we are facing because of potentially because of the price hike factor. So is it any change in the existing churn behavior of the existing customer that we have observed? Or it is simply that the gross addition number is not picking up with the increased pricing, which is resulting into net small addition per quarter, or it's a combination of both?
Let me again clarify. The price increase has nothing to do in the short term on the net customer addition or, in the short term on the churn, because, they are still less than 10% of the total customer base, added in the last four, five months. They typically have the price increase, early effect on the gross addition. The churn is obviously because, we used to add about 20,000-odd customers per year, and last year we added about 34,000 customers. Now, that sudden influx of this new customer is one, reason that we have seen even in the past, FY 2016, 2017 ke baad bhi, and now also. So that's one reason, but I think it cannot be just one reason.
It has to be a combination of our sales and service, tier mix, industry mix, product, performance. So I think all of that, we will be able to probably fix the, gross addition, which will probably take our, you know, net customer addition little higher than what we have delivered in the last two quarter. But, for us to be able to do consistently, you know, 5,000-8,000, I think we need to fix the churn, for sure. And that is not the easy one to fix. It generally takes, time to fix, that thing.
Understood. Thank you. That's it from my side.
Thanks, Rahul. Next question is from the line of Ms. Ruchi Mukhija from Elara Securities. Hi, Ruchi, please go ahead with your question.
Hi, am I audible?
Yes, Ruchi.
Many of questions are already answered, so two bit. One, your top ten paying suppliers, which today makes 46% of the revenue. They have been growing at a faster rate than the company for consistently nine quarters, more than two years. Now, this quarter, that trend is different. There is a divergence to this trend. So could you update us regarding your client mining effort for this bucket, and is there any strategic change with your... That's question number one. And secondly, for the Silver category, where we are highlighting that the churn rate was higher, have you already put in place some mechanism to curtail that churn?
I understood, I got that, the results may come with a lag, but have you already started, and which are those steps that we have already taken?
On the churn side, I think I've already answered two, three times, repeatedly the similar, answer.
Yes.
I don't have anything else to add. On the top 10% customers' revenue share, I didn't understand an ARPU. I didn't understand what are you pointing at this quarter being different than the previous seven, eight quarters?
So this 46% or the top 10% of your paying supplier for, I would say previous nine consistent quarter, more than two years, have grown at faster rate than the overall IndiaMART standard of business or growth. This quarter, their growth was lower than the overall company growth. Not material difference, but still lower. Trying to understand the client mining effort or, I would say, upscaling in this bucket, is there some strategic change? And do you expect that this pace of growth to cool down further or how to look at this?
So it is top 10%, so if my total customer base has grown only by 2,000, it is the top 10% of the customer base that also has grown by, you know, 200 only. Yeah, 200 only. So that's about it. There's nothing... no, no, nothing else to read here.
Nothing else. It's okay. It's just,
It's just a statistical number.
Statistical number, which is, causing it. Got it. Thank you.
You're welcome.
Thanks, Ruchi.
Hello?
Thank you very much. It has been a very engaging session. I would now like Dinesh to give his concluding remarks.
Thank you, ladies and gentlemen, for joining our Q2 conference call. We have tried to address all the queries in the available time and whosoever have raised hands. But still, if I could not take anybody's question, please, feel free to contact our investor relations team, and we'll be more than happy to answer that. Wishing you all the very best on this upcoming festival times. A very, very happy Diwali to all of you, and wishing you a very prosperous New Year for all of you. Thank you very much.
Thank you, everyone. On behalf of IndiaMART, we now conclude this webinar. Thank you.