LinkedIn (NASDAQ:LNKD) is increasing its focus on its second largest market after the U.S. – India, where the company has 35 million users, nearly 10% of its total user base of around 400 million. The market holds huge growth potential for LinkedIn, and the company is now looking at ways to expand its reach in the region. LinkedIn is working on initiatives to optimize its website for the relatively slow internet connections available for much of the Indian population, and focusing on localizing content to reach more rural areas of the country. It recently opened a new office in Bangalore, purported to be its biggest office in Asia. It is also looking to acquire startups in the region to meet its goal of offering more tailor-made content to Indian businesses. As the urban population in the country grows at a rapid pace and it adds significantly to its workforce each year, LinkedIn’s strategic focus on India should give the company a strong foothold in the region, which could boost revenues in the long term.
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Optimization For Slow Internet Speeds
LinkedIn has been addressing challenges in the Indian market, such as slower internet connections and mobile devices being the first point of access for much of the country’s population. In December, the company overhauled its mobile app to make its products easily accessible via mobile devices, and is now working to optimize its website for slower 2G internet connections. India’s urban population is increasing at a fast pace with high economic growth, and is expected to reach 600 million by 2031. LinkedIn is tapping into this growth through initiatives which should enable it to expand into tier 2 and tier 3 cities in the country.
We expect LinkedIn’s corporate customers to increase steadily from around 50,000 in 2016 to almost 100,000 by the end of our forecast period. If LinkedIn can convert a large number of companies into paying corporate customers – through customized products and other initiatives – and reach 110,000 customers by the end of our forecast period, there can be a nearly 10% upside to our price estimate.
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