Covid and following lockdown have brutalized internet businesses in India and the world barring few types like education, grocery, healthcare etc. Post easing of lockdown restrictions, many are yet to crawl back to the pre-Covid level including buying and selling of second hand goods or classifieds. While e-commerce has managed to recover from the Covid impact in less than the expected time window, classifieds businesses like OLX, which has India as its second biggest market, are also gradually recovering. Sushil Kumar, General Manager, OLX India tells Financial Express Online’s Sandeep Soni about the company’s unexpected recovery, growth from India’s hinterland, impact of backlash faced by Chinese firms in India and more. Edited excerpts below:
How has been the Covid impact on India business and how does the recovery look like?
Initially, I thought that this is going to hurt us more than anything else and probably this one year is just going to wash away the business. And obviously when lockdown started, the datapoint was also hinting in that direction, where traffic went down roughly by 60-70 per cent during the first two weeks of lockdown. But what surprised me is the completely different outcome after the lockdown was lifted. The type of growth we have seen on the platform in terms of volume was phenomenal. When we started speaking with customers, we understood that first, they had more time with themselves and second, instead of buying or selling through OLX, they were using the platform for both. They were buying from OLX and selling it back on OLX. This was the new sort of trends that emerged. Post initial phases of lockdown when the restriction was softened, we saw recovery of roughly above 40-50 per cent in volume than January-February volume level.
Which categories have delivered better growth during the pandemic and how’s the growth been for B2B segment?
We saw more growth in household goods category like electronics, mobile, furniture like these are the category we call goods category like these are normal household goods. The growth is primarily driven by these goods because they are consumer-to-consumer activities happening more than pre-Covid level. In the car and real estate categories, we are now back to where we used to be while jobs category is still sort of struggling even as the recovery has been slowest in jobs category.
The business activity growth like paying-user growth has been slower than the consumer growth as these businesses operate in many geographies where weekends are still under lockdown. You can operate only for certain hours of the day. So, depending upon that they are participating on the OLX site. Hence, we have not seen like 50 per cent growth the way we have seen in consumer traffic. The business traffic will come back as we move along.
How has been the user retention on the platform so far?
Currently one of the most interesting key performance indicators we are tracking is the daily active users that I was talking about when I said 40 to 50 per cent growth. Pre-Covid, it was around 5 million but now it is around 7 million. In terms of retention, for a platform like us which has around 7 million daily active users, retention of roughly 44-45 per cent is actually quite standard. It doesn’t change too much unless something really goes off-track. But for platform like ours which don’t rely on pure play marketing and acquisition channels, the retention will be in the range of 40 to 50 per cent. Our 98 per cent traffic is organic. In Covid, we haven’t spent even a single dollar in marketing.
How significant is India market for OLX globally and how much growth do you see from non-metros?
India is the second biggest market for us from volume and user base perspective. Some time back, 45-50 per cent users were actually coming from cities other than top 15 but during Covid the share has grown faster. I’m sure that it might have shifted probably by two-three percentages even as volume growth has come more from Tier-II cities than metros. Our 25 per cent traffic comes from top metros, followed by another 25 per cent from Tier-I towns and the rest from Tier-II cities and beyond.
The company did a mega rebranding exercise last year. How has that paid off?
When we were changing our product identity, the purpose was that we wanted to bring more users and retain existing users as the internet has been growing in India. After the branding, we saw enormous growth, again in Tier-II and III cities and we have also been able to retain them very well. I think that was the right decision to start activating Tier-II and III cities, and as we move along, probably we will do it again.
Any impact you witnessed amid the current backlash faced by Chinese companies from the government? Have you been tracking Chinese goods if transacted on the platform?
Every time a major internet platform where users were spending a lot of time goes off, the time spent on other platforms actually goes up. A certain amount of that time will also go to sort of e-commerce platforms, classified platforms etc. So, the way I see it is probably it has affected us positively. On the sell side we have not seen any drop. It’s very difficult for us to assess that if people were selling Chinese goods or not.
How much influence does OLX have in ads placement on the portal based on price and customer vicinity?
We don’t try to influence it so much. We want to show buyers content which is fresh and near to him because we fundamentally believe that if I want to buy something, I want to buy something close to me and recently posted. Paid ads are clearly called out and that’s why they are on the top of the page. We can make few bucks here and there by changing those things, but in the end that will come as a trade-off of consumer experience, which will not help us in long run.
Post Covid, how your growth plans for FY21 have changed?
Instead of the annual growth, we are now thinking about quarterly growth all the time. The uncertainty is quite high amid Covid not just India but across geography as in certain countries lockdown started very late. In terms of what we really wanted to do this year, we are looking at how we can really change the game in the car category that we launched two years back. This year we really want to innovate and focus more on that category as car is a high-ticket item. OLX has the biggest buyer and seller base in India. The number could be anything but that steady focus will remain, and we want to continue in that direction.