Exits have been attractive both in India and globally. In fact, in
India, online classifieds has been the only Internet segment to have
thriving public companies in form of InfoEdge and Justdial.
…Globally, this has been borne out with listed online classified
businesses trading at 6-7 times revenue on an average, and commanding
around 25 per cent operating profits. Within the Indian context,
classified businesses such as Naukri.com and Justdial.com have
demonstrated similar profitability, defensibility and valuation
multiples.
…Amongst Indian online classified sectors, jobs, local and matrimony have
been demonstrated to be highly profitable, with clear leaders emerging
in each segment. Other segments such as auto, property and B2B classifieds have
demonstrated market fit and monetisation, but it’s relatively early to
show high levels of profitability.…Online classifieds is a low-barrier mechanism to enable e-commerce. As
against bringing goods and services online, and solving logistical and
payment issues, online classifieds enable a mechanism where providers
are brought online and the transactions can take place offline. It is
for this reason that online classifieds has led the market, as against
other models such as online retailing or service marketplaces. The
growth in online classifieds remains strong, with mature listed players
still growing at 20 per cent or more.
Alok has also made a followup post on VentureWoods highlighting the new trends in the segment:
We have also been seeing a distinct evolution in classified products, around the following elements:
- Quality of content – Traditionally, classified businesses have
relied on the sellers putting up the content, without much support for
authenticity of information. New classified businesses are innovating to
improve quality of content
– (a la Cartrade) – by building automation around content generation, through connectivity with ERP systems
– (a la Zomato, Indiaproperty) – by making the content richer, including maps and audio visual content
– (a la Bharatmatrimony) – by verifying 100% of the listings- Relevance of content – Traditionally, classified business have
relied on search as a method of generating relevance of results. New
classified businesses are using social graphs to
– increase relevance by leveraging the social graph (a la Shine, Tripadvisor)
– augment content from social graph to make content richer and relevant (a la Bharatmatrimony)- Actionability – Traditionally, users are left to their own device as
far as responding to ads is concerned. New classified businesses are
enabling immediate and always-on connect (a la justdial mobile/ premium)
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