Startup of the week: OLX – the craigslist for emerging markets

We generally feature emerging digital enterprises for the weekly ‘startup of the week’ feature. This week we review the emerging giant in peer-to-peer marketplace, OLX..

Those of us living in North America think of craigslist as being synonymous with peer-to-peer marketplace. Even craigslist has competitors in North America, including local buy-sell websites like Kijiji that leads the Canadian market and Geebo, mycircle in the American market. Facebook has been reportedly been eying this market too.

OLX, founded in 2006, has emerged as global online classified marketplace. Its strength is in emerging markets like India, Brazil, Pakistan and Poland where OLX has been steadily expanding, and now operates in 45 countries.

The company began to aggressively advertise in India in 2011. OLX said it had 60% of the online classified market share in India in 2013, with 80% of usage on mobile. OLX said 1.5 billion monthly page views were generated from India in 2014. Morgan Stanley called OLX the “undisputed leader in India” in a 2013 report. In addition to continuing its free listings, OLX began to sell priority space for premium listings.

On the surface, the architecture of an online marketplace is rather straightforward. At the core it is a large listings catalog with extensive metadata about the items including user generated descriptions, pictures, expected price, location, manufacturer details, warranty, condition of the item among others. Sellers submit their listing and buyers search, browse and review the list of items listed.

The listing service may take care to validate and authenticate the users prior to provisioning them on the platform. For instance, In India, OLX requires users to register their cellphone details. The key to a successful classified service is to have a healthy ecosystem of buyers and sellers, and fresh, relevant listings that are updated and monitored regularly.

Basic Architecture of an online classified marketplace



OLX Bytes

OLX – the largest online classified ads company in India, Brazil, Pakistan and Poland.
Founders:  Fabrice Grinda, Alec Oxenford (CEO)
Startup Focus:  Marketplace classifieds forums
Future Plans: Expand operations in the global marketplace
Competitors:  Craigslist in US, Kijiji in Canada, Geebo, mycircle etc

Startup stage and funding: The company was funded by U.S. venture capital including Nexus Venture Partners, The Founders Fund, DN Capital, General Catalyst Partners, and Bessemer Venture Partners. In 2010, a majority of the company was acquired by the South African media group Naspers, which bought out the existing investors.

Case Study: Recent experience with OLX in India

Our editor, Mohan, wore the OLX ‘seller’ hat, while selling a wooden rocking chair recently. Here is a summary of the seller-experience.

Step 1: Register as a OLX user. I registered online a couple of months ago with very little effort. The registration process is rather straightforward and requires very few personal details. The key relevant details include a valid email address and a cell-phone for initial authentication and to review user messages.

Step 2: Begin listing with a ‘Free’ advert. I decided to sell a wooden rocking chair that my elderly Dad had used. I took a couple of pictures of the chair from different angles using my iPhone and added them to the listing with a brief description and the condition of the chair (It was a ‘Teak’ Wood). OLX also prompted me to consider a paid (premium) listing which I skipped.

Step 3: Let the buyers browse your listing and wait for responses. I waited a few days before prospective buyers began to email me. Some asked for my number to call and discuss while others began emailing offers and negotiating a lower price.

Step 4: Negotiate and haggle. Haggling and negotiating for prices with vendors is a typical Indian, South Asian trait that has gone mainstream on digital platforms too. I quickly learnt to walk-away from really lowball offers while sifting through those genuinely interested.

Step 5: Ongoing verification: Before the end of my listing, I got a robot-call from OLX asking if my item was still available or had sold – here or elsewhere. I liked this Quality check being done by OLX that ensures buyers like me update the status or de-list sold items without cluttering their listings with obsolete entries.

Step 5: Wait, and wait for a serious buyer: My first listing ran for a couple of weeks and didn’t sell, even though a few folks had inquired (step 4). The same happened the second time I listed (with a lower price). I was third-time lucky. A couple of serious buyers inquired and negotiated an acceptable price.

Step 6: Meet the buyer and complete the sale: This weekend a couple of buyers agreed to stop by and have a look at the chair. On Saturday afternoon one such buyer called and asked for directions to my place and came with his mother. They had a look and liked the item, negotiated and paid the agreed price and drove happily back with the chair.

In this example, I was focused on my experience with the OLX platform a seller. Buyers will have other expectations and perspectives from the platform.


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