DARE - Because Entrepreneurs Do

Welcome to the era of online classified services. The business of classified advertising has a huge market for it holds a lot of perks for the end-users

The horizontal classified platform cuts across almost all categories ranging from real estate to cars to jobs to services and everything in between. The Internet today is helping users to buy, sell and post ads a lot more easily than newspapers. When online, the users can compare a variety of products before they buy one, advertise a lot more on their products when they want to sell. Hence, there is a huge business opportunity in starting a classified platform online when the user demand is so high.

Spotting Opportunity
Quickr.com wanted to provide something to the users that is faster, better and cheaper. “See normally you can get two of these things at a time, you can get something faster and better but it won’t be cheap or you can get it better and cheap but it won’t be fast,” says Pranay Chulet, CEO, Quickr.com A classified ad in a newspaper today is expensive and small businesses cannot really afford to place anything beyond a 5-line ad given their constricted budget. But online, all of this comes for free. “There is nothing cheaper than free,” says Pranay. He also adds that Quickr’s main focus was on providing a clean and simple experience to the users. “The way the classified market was when we started - there was a lot of noise in the market. There were quite a number of websites but they didn’t have good quality content or didn’t provide a very good user experience. So a lot of people fall into the trap of thinking just because they can put up a website and they are running a classified business,” Pranay explains.

There are a lot of players in the market today who grew fast initially but eventually failed to maintain the momentum in the long run. In a bid to increase the traffic and revenues they ended up cluttering their platform so much so that it is difficult for the user to make a clear distinction between content and advertisement. “If you start an online classified only, it is not a profitable business today. You have to focus on business to consumer traffic and not just consumer to consumer traffic. Hence we made changes in our business model to suit market needs,” says Satya Prabhakar, CEO, Sulekha.com

Identifying Customer Needs
What customers want today is to be able to close transactions quickly, hence it becomes very important to provide the requisite technical extensions on the website which will help connect buyers and users better. The success of an online classifieds depends on the quality of content that pops up and the response rates. For example, Quickr provides the user a free complimentary SMS with a copy of any response to the ads that a user posts. That way the users do not have to continually check their emails or log into the website to check for responses.

Common misconceptions when starting up
It is a common misconception that an online classified would run only in the big cities and that you will not be able to garner many users in cities other than metros. “I would say the opportunity lies as much in bigger towns as in smaller towns. The cities are usually the suspects that one goes after first because they are more populated and have lot more net savvy people than in towns or villages but I think what people are underestimating in general and what we have been positively surprised by is the growth of our users in smaller towns,” says Pranay. He goes on to add “Classifieds is a very local kind of a game, so people transact in their city or even in their own locality and with the help of internet penetration, one can surely hope for more users there as well.”

You need to market your website properly and most of this actually happens through word of mouth. “One can invest in market in the short run, but in the long run, people have to like your website to tell each other about it. That’s how big companies become big. It is all about enhancing user experience so that they feel compelled to spread the word around. The power of word of mouth is often underestimated,” says Pranay.

Revenue Streams
The common revenue streams would be from advertising and creating premium listings on your website by way of which a user pays you to get product placement in your listings to get even more responses. Quickr has also started another way of increasing revenue by generating business feeds for small businesses. “We at Sulekha integrated our local search, yellow pages and classified and that is where our revenue now comes from today,”
explains Satya.

Pre-requisites
“You need to pay attention to the basic technology and have a team that understands not just technology but marketing, SEO and quality of content. They should also have offline capabilities in terms of going out on the field and talking to small businesses,” says Pranay. “It is difficult to scale these businesses, as they are pan-India large-scale businesses and to create a market place you need to maintain a perfect balance between demand and supply. This takes time to play out, so you need the patience and the resources to actually stay in the game. Anybody can put up a website but this business takes a lot more than that”, he adds.

“I would say the opportunity lies as much in bigger towns as in smaller towns” - Pranay Chulet CEO, Quickr

Challenges
It is crucial to maintain a perfect balance between demand and supply. You need to have enough listings and make sure you have enough people coming and reading those listings otherwise people will stop listings after sometime. Also, if you have too many people visiting and not many listings, they will stop coming to your site.

“The biggest challenge is maintaining clean experience for users. When you are in this business you grow fast. People start connecting to you quickly but some of them may be spam ads or outdated content. We read every single posting that comes to us and make sure we make it clutter free.” says Pranay. “You have to tweak things even after your platform is established, there are constant changes and constant learning you get from your users and you continue to implement them and that’s where your real investment works because that’s where you get people to like your platform so that they can tell each other about it. This is one thing that often gets overlooked”, Pranay explains.

Also, the websites make the mistake of investing in the wrong places. “Unless you have a lot of free traffic that comes, you have to spend a lot of money in purchasing traffic. Eighty per cent of the investment of companies goes in purchasing traffic. One should avoid that and use the income of the business for other aspects,” says Satya.

Opportunities in the future
With the advent of internet services on mobile phones, it has opened a lot of ground for online classifieds to expand their platforms. “It is clear that cellphones are a big medium. We have already launched a mobile site and getting users to get acquainted with it. If we crack the mobile medium, we hope our users would double and triple in the coming years”, explains Pranay.

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goldvish cellphone
written by goldvish , March 18, 2011

I learned more than I could have imagined I would from this virtual experience, but it has been more than that for me. Like many who log in every day, I too have someone I love who is there living in this reality right now.

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