Sulekha is no longer a classifieds site, it's a marketplace: Founder & CEO Satya Prabhakar

22 Nov, 2012, one of India's leading online and mobile platforms for local classifieds, has recently rebranded and is now positioning itself as a local services marketplace. The company has offices in 14 cities across the country, and also has presence in New York, Austin and Toronto. As the first-mover in the online classifieds business, Sulekha holds an edge over others and enjoys brand recall, but new players in this segment are also trying to catch up with aggressive marketing. In a recent conversation with, Sulekha's founder & CEO Satya Prabhakar said that the company has transitioned from pure play classifieds business and is in a different league altogether. Although 80 per cent of its Indian traffic still comes for local services and classifieds, Sulekha is now eyeing a complete integration of local search, classifieds and e-commerce, and Prabhakar further discusses best-selling categories, acquisition plans and growth figures. Here are the edited excerpts:

Sulekha has evolved from a largely local classifieds site and added e-commerce to its business. What brought about the change and when did it happen?

Well, we are not an e-commerce portal. We are a digital marketplace, catering to people's needs across sectors. E-commerce is one of the segments that we have. This transition has come along during the past one year as we wanted to merge the whole concept of classifieds and e-commerce.

How are the different business units faring and how do they contribute to revenues?

We refer to the business units as marketplaces. The different marketplaces we have are property, home needs, office needs, cars, education, travel, health, mobiles and movies, apart from the used products section. Out of these, property contributes around 25 per cent in terms of revenue, home & office needs generate 35-40 per cent, and education, health and travel contribute the rest.

Sulekha generated around Rs 42 crore in revenues in 2010-11 and was profitable. How about last year's growth and what are you expecting this year?

We are growing very fast – that's all I can say right now. We are looking at around 50 per cent growth this year.

Classifieds sites like Quikr and OLX are spending huge amounts in marketing. What's the way forward for Sulekha? Is your first-mover advantage threatened now?

Sulekha gets a huge traffic and 99 per cent of that is organic. As you said, we don't spend that much money on marketing (like other sites do). We believe that Sulekha's marketplace approach is way more powerful than the classifieds site's positioning. Classifieds always gives you the notion that it is offering cheap, used goods. But one can't build a strong enterprise and a strong revenue channel if it is a place where you can only buy used stuff. In contrast, we are now seen as a strong online marketplace, getting the right kind of customers for the SMBs. Sulekha is no longer a classifieds site; it is a marketplace that can meet all your needs. So we feel that we are in a different league now.

But at times, visitors do get confused and wonder what the site is all about. Do you think it is time to split certain business units and club those under a different brand name?

Yes, we may do that. But right now, the most important thing is to fulfil people's requirements. We did one branding exercise about 6 months ago and we plan to do another very soon. As for separating the businesses, we have recently launched a website called Pantheon which is for luxury property only. For now, we don't plan to split any other business unit. Property is a key value proposition for us and that is why Pantheon came along.

In the e-commerce segment, which category is doing well? How many transactions are you clocking on a daily or a monthly basis?

Mobile & gadgets is the best-selling category in the e-com segment. In e-com, we are clocking around 2 lakh transactions on a monthly basis, with the average order value at around Rs 1,500. The number of people interacting on Sulekha and probably buying things offline will be about 2-2.5 million. Overall, more than 22 million unique visitors are coming to Sulekha on a monthly basis and our user base has grown around 60 per cent in the past one year.

So what is the user base split between classifieds and the e-commerce units?

Out of the total traffic, 35 per cent is from the US. The remaining 65 per cent is from India and out of that, 80 per cent traffic is for classifieds & local services, and 20 per cent is for e-commerce. Also, 50 per cent of our total business comes from the mobile segment.

You have raised some $8 million in fresh capital last year. How have you utilised the funds so far? Are you looking to raise another round soon?

We have used the money to expand our operations within the country and also for our recent rebranding exercise. Currently, we are not actively looking at another round of fundraising. But we are keen to expand our presence further across the country and once we finalise the same, we will need funds.

Do you intend to add new business segments?

We want to build on the existing business units, but don't plan to expand those. The integration of local search, classifieds and e-commerce is really working well for us, and also for the consumers.

What about inorganic expansion? Are you looking at acquisitions?

We are always looking to acquire – anything that can strengthen our focus on marketplace will be interesting. But right now, we are not in talks with anyone.

As for your SMB customers, how many do you have now and what's the business model there?

We have more than 1 lakh paying SMB customers. The SMBs registered with us pay for their advertisements and we also provide them with consumer leads.

So what's next for Sulekha?

As I said earlier, we will launch another branding initiative soon. Also, we want to grow our business by 100 per cent and want to double the number of SMB customers.

(Edited by Sanghamitra Mandal)