Online classifieds industry in the US has stolen close to $3.5 billion from the newspaper industry.
- Newspapers industry is losing out the classified revenues - advertising at some of the larger chains has dropped 14 to 20 percent over the past year,
- Online traffic to classified sites has grown 23 percent, to more than 46 million unique visitors in July, up from about 37 million a year earlier (ComScore)
- Classified listings in MySpace has jumped 33 percent since their August 2006 debut. [source]
Typical business models in online classifieds Industry
- Aggregation of ads / Market making
- Distribute the classified ads to other sites – e.g. Edgio like model where Edgio users can create their own classified boards (Crunchboard is one of them) , collate classifieds ads – which can be dispersed to other sites.
- Platform players – A regular model where the site just aggregates the ads and be the platform for classified ads.
- Buyer focused – Apart from aggregating classified ads, these products are more focused towards buyer’s needs and they give away tools for buyers to analyze the market trend, get alerts etc. (e.g. trulia)
While US classifieds industry has it’s own challenges, the major driver of online classified growth lies in the ubiquity of Internet. Sites like craiglist have succeeded because both the buyers and sellers are online.
Indian Classified Industry : Market size
The estimated size of online Indian classifieds Industry (as per 2006 data) is estimated to be around $55 million USD (i.e. 250 crores)
- Total Classifieds business:
- Print: Rs. 500 crores, Online: Rs. 250 crores
- Jobs / Recruitment classifieds:
- Print : Rs. 100 crores, Online: Rs. 200 crores [source]
Why is the online newspaper industry not able to attract online classifieds business?
Statistically speaking, only about 2.5 % of online newspaper readers visit the matrimonial section of online newspaper – they prefer to go to the niche vertical sites [read the analysis/report on the online newspaper industry] The same logic applies to job sites and real estate sites as well – niche matters and newspapers aren’t providing that.
Challenges with the online classifieds Industry in India
The Indian classified market needs to solve atleast one of the following problems:
- Information hoarding: Take rental apartments – even though you know (from sources other than the broker) that an rental apartment is available, you still need to pay the brokerage! Brokers hoard the info, they almost own the information.
- Sellers are not online, while buyers are all over the Internet.
One of the most significant challenge in the Indian classifieds industry is that sellers are not online. How many apartment landlords are willing to put up their rental ads on a website? Infact, how many landlords are Internet savvy? Very few, I believe.
And that leads to information hoarding and bluntly speaking, information is free, while the transaction costs hell of a lot of money. Essentially that means, we cannot have a craiglist like model. Having said that, the majority of online classifieds solutions should focus on solving the information problem; and instead of being a pure online model, should also have an offline component.
To me an ideal Indian online classified player should have:
- a strong offline process to get the content from sellers (ditch the Internet, why can’t people use their mobiles to send their classified ads?)
- edgio like ability to disperse the seller ads to multiple places (BharatMatrimony’s IndiaList.com is probably an attempt in that direction?)
Few players in the online classifieds market – Sulekha , YoList, IndiaList, makaan, IndiaProperty..and many more What do you think should the online classified industry should focus on? User generated content? or offline channels? I look forward to your comments.
What’s next from us? Reviews of products in the Indian online classifieds market.
tags: Online classifieds Industry India, India Online newspaper industry, sulekha, yolist, Indialist, makaan, Indiaproperty
Indian Classified Industry will take time to get uplift. Still indian people scare to buy online. Indian people need Credibility and that has to be developed by Indian Classified Industry.
And there should be smart way of advertising their company [classified industry] just like Bisleri Watter bottle.
Mahesh, there need not be commerce in classifieds, hence the thing about Indian people being scared to buy online does not hold in this context.
The Indian online classifieds market is intensifying with new players entering the scene every other day. To answer your question: what should online classified industry focus on?
I truly believe localizing will be the key for greater market share, today more than 59% of Indian Internet users prefer reading in local language and more than 48% users are from smaller metros & towns. Hence addressing your offering to these users will be imperative.
@Sadath – What do you mean by localizing here? You mean local classifieds? The challenge I see with that is the same as discussed earlier- how do you get people to put up their classifieds?
The challenge that I am mentioning here is more of a medium/channel – Internet, to me is NOT the right medium to drive the growth of classified industry. It has to be driven using some offline channel.
what do you think?
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I have a relatedquestion, why is the government/public sector industries wasting so much money in putting tender advts in these newspapers. None of the general public is their target segment.
Sagar
I believe at times its mandatory for them to put up such ads in leading national and regional newspapers
Isn’t that an uholy nexus between the government and indian media . It is a win win equation for the politicians and the newspapers. It is time they get rid of wasteful expenditure and indirect sponsership of newspapers. I guess somebody needs to file a PIL against this.
Ashish this is an excellent article covering the indian online retail industry. Fuente ( http://www.fuentesystems.com ) is shortly releasing a product on the space of online classifieds . Will inform you soon and provide you with an exclusive on the same.
Thanks Syed for your comments! look forward to the product. You can email me : ashish@pluggd.in
Online classified gives value for money to advertiser and readers get detailed information , considering lots of verticals launching shows that print media will be lossing biz in coming years to online verticals.
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Ur offline example through sms and messaging would still be highly ineffective due to the limitations of text. further it wont include, images ” something that is extremely crucial when its uploading a car u want to sell, or promote a real estate property. Unless businesses use blackberry, but then again i doubt most of them r very technologically literate which goes hand in hand with why they dont use internet in the first place.
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Since the suggestion is to have a strong offline process to get listings, please tell me how to do that – I’m all ears. Since having set up a free classified listing service for people to sell their well maintained seconds or unwanted gifts in 2008, I’ve done offline promos as well – via flyers and in-store promos – things which were within my budget. I can’t advertise on TV and even other websites like Rediff and MSN are not cheap.
I send e-mags to my database, comment on posts like this one and basically am leaving quite a online trail about my site: http://www.seconddealnsteal.com. I have even offered to do videos for people who can use my site to sell their hobby creations/handicrafts because the logic is simple. Once people sell stuff that’s taking up space in their home, they will look to buy new things. So, just about anyone and everyone can use my site because it facilitates exchange of goods already paid for and for which you might still be able to get some good money.
So, what’s left to be done? Please don’t say SEO..because even that’s taken care of. So, are there any more magic tricks left so that people wake up and notice a site? I think it’s about perception. People have yet to realise that money can be made out of their seconds..like it is done in wealthier first world countries. There people boast about the great deals that they have got from seconds sites. Here they hesitate and don’t accept buying or even selling their seconds without a lot of push because of what the neighbours or relatives will think. I have the dubious task of altering a mindset, which isn’t easy at all.
I set up my site for an altruistic reason. I found it difficult to sell well maintained things after I renovated my home. Obviously, everyone else in India has faced this problem at one time or another. Hence the site was up, to help people set up an online garage sale. I’ve received praise for the site. I want much more than empty words. I want people to get on board and use it and tell me what else I can do for them, to make the site more user-friendly instead of assuming I’m a mindreader!
- It’s got an easy half-page registration form. (No, you don’t have to put down your entire life history).
- It’s got a stylish and yet simple interface.
- It recommends that people highlight the locality (apart from city and state) they live in, so that connecting with buyer or seller and finalising deals happen easily and possibly over weekends.
- It’s an e-listing service, which means that I’m not keeping a commission on any transaction made through the site because I prefer people to take responsibility for what they buy. That’s what they would do for a first hand purchase, so they should especially consider doing so for a second hand purchase as well.
Is something missing in all this detail? I’d like honest feedback, great mentoring by someone who sees even a part of my vision and smart, whacky marketing strategies. What I can do without is the naysayers – the ones who invest energy in inventing excuses and reasons for not doing something, than for actually doing it. I believe India is a prime location for seconds to grow exponentially and to prove my gut-feeling are the various sites that have come up since I set up mine. I won’t name them here and give them free publicity in my comment!
Indian Classified Industry business model is very tricky. Users in India are still getting use to posting Used and new products for sale online. We receive tons of classifieds every day, Definitely the traditional style of advertising in newspaper is vanishing on the other side, and Online Classified industry has opened doors for a Global handshake.
India still has to come a long way in terms of electronic media. The demand & consumption is huge and supply is limited thats what attracts a lot of foreign people in, who come have their share of pie and wait for another in the run not all consumer get the balanced share.
Online classifieds are getting more comprehensive, easier, free to post. So everybody will definitely try this one before entering to print ad options.
Any Update on Todays Stats. Today market and trend for classified sites.
Thanks