“Festive season expected to bring 50% growth in our advertising revenue”: OLX’s Sunny Kataria

With the onset of the festive season, brands are going all out to advertise. With the decline in COVID cases across the country and relaxation of lockdowns, people are once again looking forward to celebrating whole-heartedly. This has resulted in a rise in ad spends across categories. OLX is also witnessing a surge of advertising demand on its platform.

In an interview with afaqs!, Sunny Kataria, head, commercial excellence, OLX India, says that the company is expecting a 50 per cent increase in advertising revenue during this time.

Automobiles, mobile phones and consumer durables are the major categories to advertise in this quarter. “This quarter witnesses a lot of euphoria around shopping due to the festive season. There’s a lot of pent-up demand right now because of the lockdowns. The number of people allowed to attend a wedding has also increased,” Kataria mentions.

There’s also a rise in advertising by new-age categories like cryptocurrency, gaming and e-commerce. OLX users are not mere browsers, they are high intent users as they are there to either sell, or buy a product. So, the intent to commerce is very high versus a platform which only has new products. People come to look there, even if they don’t intend to buy.

“All these categories grew even more rapidly than what we anticipated. Our high intent users make us an obvious choice for cryptocurrency and all financial products. The gaming advertising will continue for some time with the Indian Premier League (IPL) coming in,” Kataria adds.

It is also becoming a preferred medium for OTT advertising. Earlier this would contribute less thab five percent of the advertising. Kataria attributes it to OLX’s wide gamut of audience. They deal in the most premium categories, like auto and real estate right down to used mobile phones. They also do targeted reach for these brands.

“All these content-based platforms work really well with us. For example, for OTT, this mass branding works really well, especially when they're launching new content. With digital commerce, we generally have more youth,” Kataria says.

It is also a natural fit for e-commerce brands to advertise on. When they have sales, or want to push volumes on the platform, or wish to connect to audiences that are just starting their journey to buy something new. “And that journey starts from OLX, because that's the point when people start thinking about the worth of their used phone before thinking about a new one. It's just the right time to target people,” he adds.

Since several product and show launches are planned in the festive months of September and October they start planning for it much in advance. Several big brands prefer to buy the entire inventory on the platform. The planning helps them avoid a clash between two brands for the same date.

This surge in advertising is matched by a heightened demand from the consumers for these categories on their platform.

“In a survey, we found that around 90 per cent of those selling their used products were selling it because they were upgrading to a new one. This is relevant for brands, because they can reach the person as soon as they are thinking of selling their used products,” Kataria says.

Post-pandemic there has been a rise of e-commerce in tier two and tier three cities as many people moved from the metro cities to these cities during the lockdown. OLX has witnessed that 60% of the listings come from the metros, however 60% of the demand comes from smaller markets.

“People in the small towns are very aspirational. They want a Corolla, BMW or Mercedes, but they don't want to spend a huge amount on buying a new one. So the new products, after being used, move from the larger cities to the smaller cities. Similarly, for iPhones we have seen listings are more in the larger cities, but the demand is more in smaller cities,” he said.

With most forms of traditional media becoming unavailable, during the lockdown imposed during the first wave of the pandemic, marketers switched to digital formats for advertising. OLX Advertising also benefited from this with more brands advertising on their platform across categories.

During the lockdown in 2020 they saw about 30% more daily active users (DAUs) from their previous pre-Covid peak. Though the economy has opened now and the traditional media is active again, there has not reported a major decline. It has only declined by around seven to eight percent. OLX has a base of over six million daily active users.

“We felt that once the euphoria dies down and all the markets start opening up, these numbers will gradually decline. But we're not seeing much decline. This means that the people who came online, were those who were coming there for the first time and after experiencing the platform, they have continued to stick on,” he concludes.