OLX Revenue Model

What Is OLX?

 OLX is without a doubt the most popular e-commerce site in the country at the moment, and also experiencing similar success in many other developing countries such as Nigeria and India .  India seems to be where OLX has been most successful. Surprisingly, OLX became so popular that it forced Google to shut down their similar online classifieds website (Google Trader).

OLX does not own or control any of the inventory that they list on their website. They simply act as mediator that connects the buyers with the sellers. The money transaction is completely handled by the end users; and OLX is not involved in any of the transaction. It makes money by having users visit their website, watch advertisements and also by paying them to promote the listings.

OLX STATS

·         Site: Olx.com, OLX - Buy and Sell for free anywhere in Kenya with OLX online Classifieds, Free classifieds in India, Classified ads in India, Online Classified Advertising – it varies according to each of the 40+ countries it operates in.

·         Site Age: 10 years since February 2006

·         Founded by: Alec Oxenford and Fabrice Grinda, now owned byNaspers.

·         Category: Shopping/Classifieds

·         Makes Money Through: Google AdSense banner ads, Sponsored links, and Featured Listing.

·         No. of AdSense Units: 2

OLX and many other similar online classified advertisement websites don’t involve the sale of the actual goods through the website. The website only provides a platform where sellers post their goods and services for free. Other popular e-commerce websites in the in the country which operate using the same business model as OLX include pigiame, nsoko, star classifieds etc. The problem with such a business model is that it greatly limits the income potential of these e-commerce sites since sellers rarely ever accept to pay for a listing. This is why the e-commerce sites operating in Africa and parts of Asia always offer free listing.

The undeveloped e-commerce environment in the developing world causes websites such as OLX to miss out on the listing charges that e-commerce giants such as Amazon and EBay thrive on. Surprisingly,Craigslist – which is the largest classified advertisement website in the USA – does not have any monetization strategy and it operates as a non-profit making website. So how do you make money from a website that offers free service – Ads. Promoters want those eyeballs irrespective of the source.

I decided to use OLX in this analysis instead of the local OLX - Buy and Sell for free anywhere in Kenya with OLX online Classifieds. It seems as if OLX - Buy and Sell for free anywhere in Kenya with OLX online Classifieds is still in its growth phase and they haven’t put in place as many revenue generating strategies as there are on the main site. I am certain they have not broken even considering all the adverts they have around, yet they only make money through sponsored listing. The adverts are going to increase in number gradually over the next few months, once the locals become more accustomed to using olx as a daily commerce driver.

HOW MUCH DOES OLX MAKE?

So how much does OLX make in a month? Olx makes money through three distinctively different advertisement methods:

1. GOOGLE ADSENSE BANNER ADS

OLX uses two Google ad units, one that is persistent throughout on the left side of the site and one right before the listings. It is pretty big, and I am certain that it generates lots of clicks. So, how much do they get from Google AdSense? To estimate the amount of money that can be made by a site through adsense this formula always gives a fair approximation.

No of Ad units x Total page impressions per month x 5$[CPM] / 1000

2. SPONSORED LISTINGS

Sponsored links are those links that you see before organic Google search results. They are always labeled as sponsored links. Google has also made it possible for listing sites to get sponsored links on their sites. The sponsored links appear before certain listings in the main site depending on the keywords targeted by the advertisers. Since the amount that each click earns depends on an auction in Google Adwords, then it would be very hard to make approximations or calculations.

3. FEATURED LISTING

A featured Ad on OLX allows your Ad to appear right before all the other advertisements within the same category. Usually Ads are placed in OLX depending on how recent the Ad has been placed or the search terms used by the buyer. Featured Ads will always appear on top of the list irrespective of these factors.

These are their charges per Ad:

Home Page Featured Ads cost $9.99 per week.

Top of the Listings and Search Results Featured Ads cost $2.99 per week.

The Ad placement depends on complex algorithms and it is therefore almost impossible to determine the number of featured Ads that are on the site at a given time.

I assume that due to the site’s popularity, there are thousands of featured Ads currently on the site and therefore earn quite a sum from these featured Ads since they don’t have to share their revenue with a third party as is the case in the first two options.

A listing site is one fantastic way of earning a passive online income. OLX obviously makes much more than my approximation across the world especially in India where it is very popular. OLX Kenya barely makes any profit, or maybe even none since it is still at its growth stage. I believe there is still a large opportunity for growth in the e-commerce sector in this region.

Aagaar:Shutdown Startup Business

Delhi based hyper local startup shutdown its operations

Delhi-based hyper local grocery delivery service AAGAAR.com has shutdownits operations and their website is no longer available.   They may have been closed between 10th Nov 2015 and 9th Jan 2016.Their facebook page is also not available.It means that they are done.

First reported by VCcircle,Delhi based AAGAAR had raised undisclosed amount of Angel funding from a group of investors on 26th Jun 2015.The Startup was founded in November 2014 by Saharawat who had previosly worked with Shoppers stop and Hypercity.AAGAAR provided fresh and daily essentially such as fruits and vegetables,groceries,beverages,personal care,dairy products to consumers at doorstep.

INDIAN Online Grocery market 

The e-grocery business is plagued with wafer-thin margins, high logistics costs, exponential customer acquisitions costs and fierce competition, and has witnessed a number of casualties recently.Indian online grocery market is set to hit Rs 2.7 billion mark by FY’2019 following the surge in number of players operating in the industry, says a report.

Future growth of online grocery industry is expected to be led by operations in smart cities and saturation in metropolitan cities, says Ken Research in its report.

'Traditional grocery stores will continue to be a part of the market but the share of online groceries will continue to increase at a high growth rate. The market will also witness the introduction of newer players and better models in the market,' Ken Research said in a statement.

‘There will be a high investment in distribution channels and operations experts to maintain an optimum mode of delivery at a feasible cost’

This growth is estimated to be fuelled with heavy expansions that will be undertaken by the existing firms in the market and spreading out to newer markets by expansion in the user base due to increasing reach of internet and smart-phones.

Majority of the customers who buy groceries online are male and are in the age bracket of 24 years and above. This shows the relevance of the working population to the market of grocery shopping. A large portion of the population prefers to shop for groceries once a month, which means that the basket size ordered would be large and the online grocers can earn better profits from such customers.

The players operating under the industry are expected to maintain focus on expanding operations by venturing to more cities and adding more SKUs, the report said.

 INDIAN Online grocery history

One of the biggest players in the segment, Peppertap, which raised funding from SAIF Partners, Sequoia Capital and Snapdeal, recently decided to shut down operations.

In February 2016, e-commerce venture Flipkart had shut down its grocery delivery app Nearby, five months after it was launched in Bangalore. Soon after, cab-hailing firm Ola pulled the plug on its hyperlocal grocery delivery app, Ola Store.

Reference:

www.knowstartup,com

www.unplugtech.com

http://retail.franchiseindia.com/

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Srikant Bolla : Inspiration for life

Srikanth Bolla is an Entrepreneur from Hyderabad.When he was born, neighbours in the village suggested that his parents smother him. It was better than the pain they would have to go through their lifetime, some said. He is a “useless” baby without eyes… being born blind is a sin, others added.

Pic Credits:https://www.industriesstory.com by Jagadeesh Kashyap

 He considers himself the luckiest man alive, not because he is now a millionaire, but because his uneducated parents, who earned Rs 20,000 a year, did not heed any of the ‘advice’ they received and raised him with love and affection. “They are the richest people I know,” says Srikanth.

Despite getting 90% in class 10th, At the Intermediate level, when he wanted to opt for Science, the Andhra Pradesh Education Board refused to grant permission. It said that Arts was what the only stream the blind could take up. Srikanth filed a case and, after a six-month wait, the Board agreed to let him pursue Science. Srikanth topped his Class 12, securing a 98%.

When IITs and NITs didn’t give him hall ticket for writing competitive exams, he applied overseas and got selected in 4 of the best colleges ever created on Earth: MIT, Stanford, Berkeley, and Carnegie Mellon.

 He went to Massachusetts Institute of Technology, received a scholarship, and was MIT’s first International blind student.

After returning from the US in 2012, he started Bollant Industries, where 60% of employees were physically challenged. With 450 employees, the company is now worth Rs 50 crore, and even Ratan Tata invested in him.

Today, Srikanth has four production plants, one each in Hubli (Karnataka) and Nizamabad (Telangana), and two in Hyderabad (Telangana). Another plant, which will be one hundred percent solar operated, is coming up in Sri City, an integrated business city in Andhra Pradesh, 55 kms from Chennai.

Angel investor Ravi Mantha, who met Srikanth about two years ago, was so impressed with his business acumen and vision for his company that he not only decided to mentor him but also invested in Srikanth’s company.

They are raising $2-million (around Rs 13 crores) in funding and have already raised Rs 9 crores. According to Ravi, his personal goal is to “take the company to IPO.” A vision to build a sustainable company with a workforce comprising 70 percent people with disability is no mean task. “Srikanth’s vision is inbuilt in the company. It is not just a lip service to CSR,” adds Ravi.

Lastly, I Would Say

If you don’t give up on your dreams today or tomorrow you will be successful, all you have to do is just focus on your goals. People(s) have only one thing to do, “Talk” even when you get successful, So let just them do their work, and you do your work.

Mr. Srikanth Bolla is one of the Inspiring people you have faced hell amount of problems, but he don’t give up, and now we can see the result. HATS OFF!

Failed food-tech start-up and its reasons

These are three other food delivery start-ups that were short-lived. Spoonjoy, like Dazo, had an impressive roster of investors including Flipkart founder Sachin Bansal. This food tech company got follow-up funding of US$1 million from Saif Partners. But it could not sustain operations and scaled back last month before being acquired by grocery delivery start-up Grofers, whose founder Albinder Dhindsa made it clear that it was an acqui-hire and Grofers had no intention to diversify into the food delivery business.

As urban India sees a mushrooming of nuclear, double-income families, as well as a large influx of young singles with busy work schedules, there’s clearly a big opportunity for food e-commerce. But this has led to a rush to fund food startups from investors with a “fear of missing out” syndrome. Not enough attention has gone into the cash burn and quality problems on the ground. Now, many of the start-ups are finding it hard to raise later stage funding and floundering.


Langhar, a Delhi-based service for freshly cooked meals, shut down earlier this year, and Chennai-based OrderSnack closed after failing to raise funds. Eatlo, Freshmenu, and Frsh are others reported to be in a desperate hunt for funding and may be the next to bite the dust. We can expect more failures before fundamental issues in execution are sorted out in this space.

The 10 Commandments of Entrepreneurship

When  I was reading a article regarding Entrepreneurship got some good insights on it,and here is its brief.

 The 10 Commandments of Entrepreneurship:

1) Don’t start a company for the money. Start a company for the mission and the money will follow.

2) Don’t think small and start big. Think big and start small.

3) Don’t sell to people you don’t love, products they don’t need. Find people you love, and serve them what they need.

4) Don’t ask “how can I make money”. Ask “how can I help others make money”.

5) Don’t find a team to work for you. Find a team you want to work for.

6) Don’t ask “what to I need to do”. Ask “What do I need to help others to do.”

7) Don’t measure your wealth by quantity of money. Measure it by quality of time.

8) Don’t have an “exit strategy” where you win when you end. Have an “enter strategy” where you win when you begin.

9) Don’t set a goal to achieve a goal. Set a goal so you can be the person you need to be to achieve that goal.

10) Don’t climb mountains so the world can see you. Climb mountains so you can see the world.

“It belongs to the imperfection of everything human that man can only attain his desire by passing through its opposite.” ~ Soren Kierkegaard

DoneByNone : A failure story of an Experienced E-commerce team

E-Commerce is a tough nut to crack. Start-ups which have been surviving so far in the game are the heavily funded ones, notorious for burning investor money and reporting huge losses.

Gurgaon-based web-only women’s fashion brand DoneByNone was backed by early-stage venture capital firm Seedfund, which invested US$2 million in it. DoneByNone had three founders – Amarinder Dhaliwal, Vijesh Sharma, and Vijay Misra – with tons of experience in ecommerce, internet businesses, and technology. Dhaliwal and Sharma were earlier with Bennett, Coleman & Co., and Misra was a former director of the TCNS Clothing Company. They launched the company first as Handspick in February 2011, and a year later, rebranded it as DoneByNone.

But it ran into trouble soon. “We’re a small start-up, and as you can imagine, life has been quite tough for small e-commerce retailers – and we went to hell and hopefully are on our way back from there. While we were focusing on other things that needed solving, we took our eyes off you and your issues. We’ll now work to sort each and every issue you all have. If we've taken an order and haven’t fulfilled it, or have messed up while fulfilling it, we’ll work to set it right. If we can’t fulfil it right, we’ll give you your money back. Promise,” the start-up said on its Facebook page last December. This was the last statement from the company.

The writing was obviously on the wall well before that. In October, the start-up made a rather desperate announcement of 70 percent off all items. DoneByNone had 353,252 fans on Facebook, and going by the feedback of customers on it, the start-up failed to handle the demand or deliver products on time.

Shailesh Vikram Singh, executive director of Seedfund, told TechCircle that the co-founders had quit the company due to challenges in raising further investment. He also said that the company will be relaunching the site with a new team but nothing has been announced so far.

DoneByNone co-founder Amarinder Dhaliwal is now the COO of Micromax’s YU, Vijesh Sharma is on a stealth mode with his new startup, and Vijay Misra’s LinkedIn Page simply says that he was with DoneByNone till August 2014.

Ecommerce in India is a tough space for the smaller players unless they have a clear niche advantage. They can’t match the likes of Flipkart, Snapdeal, and Amazon in sustaining deep discounts to capture the market.

TalentPad: A Failed start-up

 Hiring is a space with a clear opportunity as it’s in the center of a boom in new businesses. But a multitude of players are also finding it challenging to offer a clear value proposition. One of these was TalentPad which shut down less than a year after it raised funding from Helion Ventures.

The IIT and IIM alumni founded start-up from Delhi had a curated marketplace model using analytics to find suitable candidates for its client companies. It even acquired its Bangalore-based rival OptimizedBits in May to boost its analytical capabilities. But months after that it abruptly shut shop with this cryptic missive: “We helped a lot of companies hire from some of the best tech talent in India and played a crucial role in their growth, while delivering the best customer experience. But, we failed to figure out a scalable business for a big enough market.”

India’s engineering colleges produce over a million engineers each year, but fewer than 20 percent of them are employable. Finding suitable candidates, therefore, is no mean task. Hiring start-ups have to be nimble to figure out what works.

Venturesity, for example, went from a hiring platform to a training platform before pivoting to a hackathon model for talent discovery. Another startup Hiree focuses on candidates “actively looking” for jobs, so that recruiters don’t waste time on dead lists. Initially it began with candidates serving out their notice period but changed its name from MyNoticePeriod to Hiree when it broadened its scope.