OLX is a popular platform for buying and selling services and goods such as electronics, fashion items, furniture, household goods, properties, cars, and motorbikes. The OLX group spoke to BE’s Ellora De.
Q. How is OLX different from comparable app-based competitors?
A. What clearly differentiates OLX from its competitors is our focus on the market and the immense value that we have been able to create for our users through ease of discoverability and liquidity on the platform which has led to OLX being a household name in India. OLX leads the market with some of its key categories like pre-owned cars, mobile phones and electronic goods. We have maintained our market standing over these years by paying close attention to our users and delivering a product that truly works for them. Because of this, buyers and sellers are able to transact almost anything instantly on OLX.
We believe competition is inevitable and with every competition there comes an opportunity. We welcome any new player who contributes to our mission of empowering people to upgrade their lives, as it all contributes to create prosperity in local communities. Clearly, there is space for multiple players in this market but we are confident in our strategy which has led us to lead this specific vertical and being used by over 50 million users every month. Internet users are expected to reach 627 million in 2019 and we believe there are plenty of opportunities to grow and extend our leadership in this segment.
Q. Tell us about your business model?
A. Being a pure-play classified marketplace, our business model is akin to the classified model globally. We operate on a ‘freemium’ model where users are free to post ads for selling. Business listers have the option to buy packages for listing depending on their business needs. We also offer featured ad options where users can drive more traffic to their respective ads.
Q. Tell us about your growth experience?
A. Over the last two years, we have witnessed 40% organic traffic growth. Our page views are currently at seven billion a month. Categories like automobile and smartphones have immensely contributed to the overall growth. Our tier 2 and tier 3 users are increasing, mirroring the trend observed in India for internet penetration. As per industry reports, there are 200 million internet users in non-tier 1 cities. Our research indicates that while most of the first-time internet users access the internet for entertainment and communication needs, they gradually move on to online marketplaces over a due course of time. On OLX, most of these first-time internet users will start by transacting with low ticket items such as mobile phones and then gradually move on to higher ticket items such as automobiles or white goods. People browse the app for market understanding to begin with, and then eventually become buyer and sellers on the platform.
Q. What are the criteria to be fulfilled to sell and buy through OLX?
A. In order to sell or buy through OLX, users must verify themselves on the platform either via logging in through their social accounts, email id or phone numbers. Only verified users are allowed to trade on the platform. Unverified or partially verified accounts can be rejected.
Q. What is your growth plan?
A. The outlook for the new fiscal is to grow our user base, strengthen our existing categories, grow our new business lines and bolster the core theme of customer centricity across the entire OLX product portfolio. Our recent brand transformation aims to appeal to global millennials. The app overhaul which is announced in India earlier this year, backed by digital initiatives, advanced ML and AI, has resulted in a better, global product which will transform the user experience. With over 85% market share in the classified segment in India, we are determined to introduce OLX to new internet users across deeper pockets of the nation while also building upon our key categories. India has a significant pool of internet users pegged at more than 450 million that are expected to increase from 65% to 90% by 2022 (as per a joint report by IBM and Kalaari Capital) while OLX has 50 million users in India. The focus of the company for the next year is to double car sales business, see a two-fold rise in monthly active users from 5 crore to 10 crore and to improve growth in job segment. With the development of right technology infrastructure, we are confident to further strengthen and develop our business model. In turn, this will enable us to offer a superior customer value that will be the key to differentiation in our industry.
Q. What is the priority of your business?
A. Our priority currently is to grow our business across the verticals where we are present in the Indian market. India is amongst the top two growth markets for OLX globally. With 50 million users in India, OLX India comprises a key chunk of the global user base at OLX. One of the key factors contributing to the success of the platform is the large populace of over 1.2 billion and the low yet rapidly progressing rate of internet adoption in India. As a consumer internet brand, our growth is directly related to the widespread adoption and use of the internet. In India, reliable digital connectivity is still largely an urban phenomenon. However, the trickle-down effect is making its way to smaller towns thanks to the declining prices of smartphones and affordable data.