Why Is LinkedIn Focusing On India?

by Trefis Team
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LinkedIn (NASDAQ:LNKD) is increasing its focus on India, its second largest market after the U.S. with 37 million users, over 8% of its total user base of around 450 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 recently launched three new products for the Indian market:

  1. A “Lite” version of its mobile website to adapt to slower internet speeds
  2. LinkedIn Placements: a product aimed at students to find job opportunities
  3. LinkedIn Starter Pack: aimed towards startups and small and medium-sized businesses

Here are two primary reasons why LinkedIn is focusing on India:

  • Huge Potential In Revenue Per User: LinkedIn’s revenue per user in the U.S. was $8.30 in the first half of this year compared to $1.50 in the Asia-Pacific region, and $4.00 on average globally. If LinkedIn can generate around $4-5 per user in Asia-Pacific, it could easily be a billion dollar revenue generating geography for the company.

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  • User Base Growth: LinkedIn’s user base grew from 50 million to 100 million in the Asia-Pacific region in the last two years and this growth can continue considering 40% of the world’s working professionals reside in this region. The recent launches are aimed at improving LinkedIn’s base in emerging markets, and the growing number of jobs and increasing smartphone penetration should help going forward.

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We expect LinkedIn’s corporate customers to increase steadily from around 51,000 in 2016 to over 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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