Why Olx quietly killed paid listing on its site

8 Mar, 2013

Online free local classified site has quietly stopped its premium listings service, one of the two channels of revenues besides advertisements. Citing low levels of market maturity as the main reason, Amarjit Singh Batra, CEO of Olx India, said the company would bring it back once it feels the time is right. The paid listings service was stopped about six months back.

Having the parent company in Argentina, OLX was launched in India in 2006 and it was among the early breed of internet businesses in the country. Before it was closed down, the paid listings comprised of 3-5 per cent of the total listings for the site, Batra told The online classifieds site had been a big spender for marketing campaigns on TV and radio. In 2011, it launched its first TV campaign that resulted in 2.4 times growth in traffic for the classifieds website. Also, today, India is in the second biggest markets next to Brazil, Batra informed.

"We have taken it off because we felt that at this stage of market maturity it's important that we keep the site completely open. We will bring it back in some time but we won't push it. We feel at the moment growth is more important for us. We have been getting calls to start it back but our objective is to keep it as a marketplace equal for everybody. We want to first reach a level where the individual gets comfortable enough to pay for a listing. Otherwise it will become an unfair market, individual listings will go down," Batra disclosed.

Quikr,  the closest competitor for Olx, on the other hand has added lead generation to its stream of revenues besides ads and premium listings. In an earlier interview with, Pranay Chulet, founder and CEO of Quikr, had stated that advertising is the biggest contributor to the revenues. Quikr recently raised  $32 million in its fifth round of funding led by PE firm Warburg Pincus.

The market has been witnessing hectic action with back to back TV campaigns triggered by these two main players after Sulekha completely transformed into a marketplace model last year. Batra maintains that Olx began TV marketing with the intention to create awareness about online classifieds. Citing comScore  data, Batra stated that Olx is way ahead of Quikr in terms of user engagement, though the data reveals that the latter has more unique visitors.

Mobile is also increasingly becoming a strong channel of business for these sites. While last year, Quikr claimed to have 24 million users out of which 6 million were logging from mobile. Olx says around 45 percent of their traffic comes from mobile.

Batra said that classifieds is a sector where the trend has been of winner taking all and there is little scope for other players. He referred to western markets where traditionally there has been one leading player and rest had to change the model. "By many metrics we are already the leader in the market, it is only time before we would be way ahead any sort of competition," Batra claims.

(Edited by Prem Udayabhanu)