OLX builds on the next billion users opportunity

OLX has been one of the few internet companies to have been growing consistently in India as well as globally. A recent report, as per the RoC filings says that OLX has been profitable for over three years. In the last two years, the brand forayed into the offline preowned cars market with the launch of OLX Cash My Car business as part of a JV with Naspers backed Frontier Car Group.

The OLX app which is among the top three downloaded apps on play store, enjoys more than 100 million downloads and 100 million daily impressions.

Looking at the profile of OLX users, it is evident that the business is on the right track to attract the next billion users in India. As per a recent report by OLX, millennials emerge as winner when it comes to adoption, usage and time on site. For instance, in the cars category, 50% of the buyers are millennials attracted by a large variety of cars and the ease of buying or selling at their convenience. The report further notes that over the next three years, millennials will emerge as the largest consumer group in the automobile industry as the pre-owned car industry hits 6.6 million units in market size by 2023.

Two very important traits of the next billion users (NBU) that attract a lot of attention from brands and businesses to devise their product and marketing strategies are - value consciousness and aspirational nature. For instance, many from the NBU category have an older android version or even use a cracked screen of a mobile handset of their preference, generally preowned. They prefer to use the internet in their language and voice has emerged as a great tool to propel penetration and usage. A lot of this behavior becomes clear from the transactions and listings happening on OLX.

With about 4.5 million daily active users, millennials make up for a staggering 70% of the user base. The demographic split too sits at a healthy 70:30 ratio with 70% of the user base coming from tier 1 and remaining 30% of the user base coming from tier 2 cities – a decent indicator of both the internet penetration, and the ease of use of the application.

While the world is talking about slowdown, the platform is witnessing a surge in listings, DAUs and MAUs. The value conscious, aspirational Indian, for instance, is trying to sell an almost new car and looking to upgrade to a better model or make. This sums up the market appetite that still exists in the gloomy days of the prevalent market sentiment.

From Amitabh Bachchan’s old Mercedes S-Class, to a Ferrari 599, to Ducati Diavels, to still waitlisted M G Hector, Jio mobile phones, the platform has witnessed some extremely novel propositions. The brand witnesses more than 4 million monthly listings which generate in excess of an astounding 65 million monthly replies. While these numbers may catch you awestruck, they are simply the by-product of an interesting and engaging interface which commands as much as 16.5 minutes per user on the application.

Logging in to OLX and engaging in transactions on the platform speaks one aspect of the behavior, preferences, desires, motivations and aspirations of the next billion users in India. People are constantly looking to upgrade, and make an informed decision, looking at their need and want from a much more matured lens. They understand what they need today will eventually change over time, they no longer want a financial commitment burden but at the same time are keen to upgrade. This opportunity attracts brand advertisers to display their products on the platform.

OLX’s brand advertiser base has gone through the roof over the past one year. The company’s brand advertising started with brand advertisers in single digit in 2018 which has now catapulted into 100+ by 2019. OLX believes that the reason for this growth is that increasingly brands are seeing the impact of in-market audiences who are logged in and are transaction ready. OLX is of the opinion that for their advertisers, it is easier to identify, segment and target on OLX to reach to the most relevant audience. Brands already advertising on OLX include market leaders from categories such as mobile handset makers, automobile manufacturers, food and beverage companies, social media giants, BFSI sector leaders, and consumer durables. Much of this growth explains that since buyers and sellers come to OLX for the real deal and are not window shoppers, the propensity of they turning to convert to a customer is relatively very high. Unlike other internet companies, an ad will be seen by users who have an intent to spend. As per a recent OLX data, 90% of OLX mobile sellers buy a new phone and hence, mobile advertisers have increased over the past one year on OLX. 64% OLX mobile buyers end up in the new purchase funnel and similarly 40% OLX bike buyers are also interested in buying a new bike. These behaviors have helped OLX to provide meaningful and hassle-free services for its customers.

Circling back to the larger picture, the numbers look promising for OLX. The company looks completely on course to solidify its reign as the numero uno C2C marketplace application globally.