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 Model 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.
Indian Classified Industry: Market size
The estimated size of online Indian classifieds Industry (as per 2007 data) is estimated to be around 550 crores
Total Classifieds business:
Print: Rs. 1000 crores, Online: Rs. 550 crores
Print : Rs. 100 crores, Online: Rs. 230 crores
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:
Information hoarding: Take rental apartments - even though you know (from sources other than the broker) that a 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 challenges 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 is 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.