Yelp Inc. (
recently entered the Asian market. The online information service
provider announced the availability of Yelp in Singapore, where
residents can create accounts on Yelp.com.sg to post their views
about local businesses and services.
Yelp's free application for
iOS devices is available. The company announced that free Yelp for
business owners will also be available to the thriving business
community of Singapore.
Currently, Yelp Singapore is available only in some European
languages (namely English, French, German, Danish, Finnish,
Norwegian, Spanish, Swedish and Italian).
We believe that to achieve significant popularity in Singapore
and fight competition from local providers, Yelp needs to add Asian
languages, particularly Chinese, Malay and Tamil, which are the
country's official languages.
Nevertheless, we believe that the expansion may boost Yelp's
top-line growth, due to the strong macro-economic growth potential
of Singapore, huge English language based customer group and higher
per capita gross domestic product (GDP).
Singapore is one of the fastest-growing countries in Southeast
Asia. According to a study by Knight Frank and Citi Private Bank,
Singapore is projected to be the wealthiest country in terms of GDP
per capita by 2050, surpassing Hong Kong (#2), Taiwan (#3), South
Korea (#4) and the U.S. (#5).
According to a recent report from Asian Development Bank, growth
in Southeast Asia, (particularly Singapore, Malaysia, Philippines
and Indonesia) continues to remain robust particularly due to
strong private consumption and increasing domestic demand.
Moreover, the region's stable government policy will also support
continuing growth over the long term.
We believe that Yelp will continue to expand in the rapidly
growing markets of Asia, particularly Southeast Asia. This is due
to the fact that most of Yelp's operating markets (US and some
European countries) have been facing macro-economic weakness for
some time that is hurting its top-line growth.
Although Yelp has been pretty aggressive in exploring new
markets (launched service in 6 overseas markets including Denmark,
Finland, Norway and the United Kingdom during the second quarter),
none of the international markets generated revenue during the
Currently, Yelp has a presence in 39 international markets. The
company spent approximately $5.4 million in the first six months of
2012, adding new sales associates and personnel. Yelp expects to
spend $15.0 million on international expansion during 2012. We
believe that this incremental spending will hurt profitability in
the near term.
However, expansions in the rapidly growing markets of Asia,
strong growth from among the mobile user base, and partnerships
with Apple and
will provide significant monetization opportunity over the long
We remain Neutral on Yelp over the long term (6-12 months).
Currently, Yelp has a Zacks #2 Rank, which implies a Buy rating in
the short term.
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