Tuesday, July 28, 2009

On OLX: Free Online Classifieds

I recently heard from OLX, an online classifieds company who own www.olx.in. As you know, I am interested in marketing, particularly in online marketing, so I was intrigued. The Country Manager for India, Amarjit Batra, has obligingly answered some questions for me. Do read through and check out the site if you're interested.

Let me know if you have any more questions that I can pass on to him. Also, if you have used OLX, tell me how the experience was.

Unmana: Your website says OLX was “created in March 2006 and launched in June 2006.” When did you launch olx.in?
Amarjit Batra: www.olx.in was launched in May 2006.

U: You claim OLX is “the next generation of free online classifieds.” What makes it so? What can users expect from OLX?
AB: OLX is a Web2.0 product and users can easily design rich colorful listings with pictures and videos and display their listings on their social networking profile (Facebook, Myspace, ...) Some of the features that make us different from others are:
  • 100% free (forever) even in jobs and real estate

  • Ability to include videos and pictures in listings

  • A city, neighborhood and zip code database so the entire country is covered and not just pre-selected cities (Available in select countries)

  • Ajax "WYSIWYG" rich-text editor for richer listings

  • Ability to comment on listings to create a stronger community

  • Advanced search functions with sliders allowing searches at variable regional settings

  • A distance field allowing you to see postings near your zip code wherever possible (Available in select countries)

  • Ability to post listings in any language in any country

  • Ability to view the site in any country in any language

  • Global reach

  • Mobile version: The mobile version http://m.olx.in is unique as one can browse all listings with pictures and videos

  • Find a listing you noticed on the web and save it on your phone

  • Read your messages and reply to ads

  • Post an ad anytime

  • If the mobile number is mentioned on the ad, then there is a one Click-to-Call to speak to the ad poster

U: Does OLX have any way of verifying the authenticity of listings on it? Will you enable users to rate sellers and goods/services?
AB: OLX is a free site and we allow free flow of information between the seller and buyer. We do not earn either for listing, searching or transacting. This makes it convenient for sellers to connect with buyers directly without us controlling the communication or the transaction. In a classifieds site like OLX, the transaction takes place offline and unlike an ecommerce site, the buyer does not need to make any advance payment to the seller. This way, the buyer is safe and can transact with the ad poster once assured of the genuineness of the item.
Though OLX does not verify the authenticity of each listing posted on the site, we do have certain tools and filters to check for Spams and Scams. We also have a multilingual dedicated customer support that manually screens listings and deletes those with suspect content. Over all 60% to70% of postings are deleted.
We will not enable users to rate sellers since the transaction between the buyer and seller takes place offline and we cannot authenticate the transaction. But we have a ‘Comment’ section on each listing and users can share their purchase experience with other searchers or provide feedback to the seller.

U: Sites providing online classifieds have come under scrutiny in other countries for illegal transactions conducted or advertised through the site. How do you plan to deal with such issues?
AB: Spams and Scams are challenging issues for a classified site like ours. As mentioned above, we monitor the site manually as well as have automated tools to detect Spams and Scams. We blacklist keywords, IP addresses, countries etc. and have a large multilingual customer team that is vigilant 24/7 to tackle such issues.
In addition, we urge our users to flag a prohibitive listing and this messaging is provided at key user touch points. We also provide onsite messaging to our users advising them to be alert and careful when making any transactions offline. We take proactive measures to prevent such issues from happening.

U: Are older listings removed from the site or do you keep everything up indefinitely?
AB: We currently keep the listings on the site till the users delete them on their own. The users have their own dedicated dashboard ‘My OLX’ from where they can modify, delete or repost their listings. We are also evolving new policies around this.

U: If OLX is “100% free (forever)”, can tell us about your revenue model?
AB: Yes, OLX core site will be 100% free forever. However we have launched ‘Featured Listings’ in few countries that allows users to get prominent placement on the site. This is certainly a value add to the advertisers, without compromising on the free listings that one can still post.
We also do not charge any subscription fee (in matrimonial sites for instance) or charge for any reply to ads.
Our revenues come from the text ads (currently provided by Google) displayed on our listings result pages and the individual classified ad pages. We haven’t activated any banner ads our site.
Our mobile site (m.olx.in) is also completely free for users. The mobile site has a banner or text ad on top and bottom of each page and is monetized through ad networks.

U: Is the global downturn affecting your business, particularly in terms of your entry in India? Do you think you chose the wrong time?
AB: Since we are free to list, search and transact, the Global downturn has affected us positively as more users are flocking to our sites. For ad posters, OLX provides advertisement and exposure to thousands of potential buyers in their city completely free of cost. Even SME’s who want to conserve their cash are turning to free classifieds sites like ours as a channel to increase sales. In the downturn, people are looking for deals on used items like mobile phones, furniture, cars, etc and OLX provides these individuals a free platform to post or search these products.
Our India site has been live since 2006 and recently we have established local presence in the country. It is a good time to enter India as the growth of Internet users and the Mobile Internet users will hopefully work in our favour. The first phase of classifieds has been the vertical classifieds in jobs, real estate and matrimonial. We have entered at the start of the second phase when a free local classifieds model is emerging strongly.
Worldwide, users are getting habituated to free ad supported business models (most social networking sites etc) and India is also catching on to that trend. People are not going to pay for posting their old furniture, car pool, domestic help, finding roommates, jobs wanted and that is where OLX will be the first choice for such users.

U: When you start out in a country, how do you get sellers to put up listings on your site? What kind of publicity do you create? Do you offer any incentives?
AB: We normally do a soft launch in a country and focus on SEO and a bit of online marketing. We try to be present where ever they are looking for platforms like ours; like search engines. Our focus is to provide a clutter free user experience to a new user and make it easy for them to use and navigate through the site.
We would sometimes do a press release about the launch, but we do not do any specific publicity or offer any special incentives. The biggest incentive is that we are 100% free.

U: Does OLX plan to extend its online business to on-the-ground offices across different locations in India?
AB: No. We are a pure online business and do not intend to have any offline presence in any city.

U: Have you personally worked on OLX in other countries? How does the experience compare to that in India? What do you think is the biggest challenge for OLX in India?
AB: I have joined OLX a few months back and am focused towards building the India business. However, I assist in business development initiatives in other OLX countries. In many markets, OLX has grown very well and is the leading classified site in the country. India is uniquely positioned from these other OLX markets as we have a sizable population accessing internet through PC’s as well as mobile.
Our biggest challenge and probably the biggest opportunity in India is to tap into the huge rural and semi urban population who are not comfortable with internet or do not have access to PC’s. Also, these people are more comfortable in communicating in their local languages and not in English. We hope that the mobile version of our site and our presence in other local languages position us to win these users.

U: What are your personal views about how the online marketplace is shaping up in India?
AB: I strongly believe in the online market place business in India. In each of the categories (like jobs, real estate, vehicles, services etc.) there is a huge fragmentation because of which consumers have to deal with intermediaries that leads to margin erosion and lack of options. An online marketplace helps in disintermediation by bringing sellers and consumers directly in touch with each other.
Online marketplaces are poised for a strong growth and models that allow a free flow if information between the buyers and sellers should do well. Some of the key trends in favor of online classifieds in India are:
  • Increasing awareness about the online classifieds and a gradual migration from print classifieds to online

  • Rise of the Horizontal Classifieds sites like OLX provides users a one stop shop for all their category needs

  • New categories like vehicles ( auto), services, education becoming increasingly important like the strong categories like Jobs, Real Estate and Matrimonial

  • C2C transactions are increasing due to increased disintermediation

  • Online marketplaces becoming a boon for SME’s (a huge and fragmented base in India) helping them find new buyers and increase their reach

  • Internet is going local with more and more transactions taking place within cities and towns.

  • India with a 50 Mn Internet population and a 400 Mn mobile population, is seeing users getting their first experience of Internet on their Mobiles

I feel that online marketplaces which provide a great user experience, provide options on both Internet and mobile and localize to Indian consumer needs would stand to gain in the long run.

3 comments:

Amit said...

hi,
it shows how much hardwork you have done for the interview. keep it up.

Unmana said...

Thanks, Amit! I suppose you're the same Amit I know? :)

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