The ‘big guys’ have classifieds in their sights. Facebook, Google, LinkedIn, Amazon, and others are getting more active in classified space, both general classified and verticals.
The focus on mobile is even more intense as the slow merger of stuff classifieds and marketplace traditional classifieds deepens.
In this interview with Senior Correspondent, GODDIE OFOSE, OLX Country Manager, Lola Masha, shares her experience and speaks on the controversy about the brand.
On OLX
OLX is an online classified platform where we bring buyers and sellers together to transact effectively. OLX is a global brand, we are in 40 countries. Our headquarters is in Amsterdam, The Netherlands, but people often think we are a South African company.
In a few markets we are number two but we are usually number one in most markets that we go to.
In South East Asia for example, we are in The Philippines, Indonesia, Thailand, and so on. We are number one player in India. In Latin America, we are in Brazil, Argentina, Colombia, and Peru.
In Africa, we have three offices: Nigeria covering West Africa, Kenya covering East Africa, and South Africa. That really shows you that OLX is a global brand.
We always operate with the highest standard possible. In terms of what informed our decision to come in to Nigeria, why not?
Nigeria is a market that you can’t ignore and we think the potential to truly bring value to Nigerian buyers and sellers is tremendous, to give a platform that truly allows you to connect in a boundless way.
You may be in Port Harcourt and connect with buyers in Lagos and Kano, and we have seen those success stories. We have users who brought success stories to us, we have cases where they would become friends after. So, it goes beyond transaction but more of a relationship.
We believe very strongly in the value that we provide in connecting buyers and sellers and in promoting trade.
eCommerce in Nigeria
The ecommerce industry actually has different types of business models. You have the standard retail business model, which is the ecommerce business itself, that actually has a warehouse that holds the goods. The likes of Konga and Jumia are in that space.
You have daily-deal business, what DealDey is, to promote special deal of the day, and you have the classic business.
I think there is still some misconception and some confusion among our users on the difference between those various units.
We are in the online classic space and what that means is that we step out as a middleman and allow buyers and sellers connect to get the most value. We are number one in Nigeria as well. We are here not only to play but also to succeed and to win, and we take all steps necessary to make sure all that happens.
We bought our competitor, Trade Depot. They were the number two competitor, they had been in Nigeria before we got here and they were willing to do business with us for us to acquire them.
This goes to show the fact that OXL believes in the Nigerian market and we are here to thrive.
eCommerce models
I wouldn’t want to speak for those because I know the classic space and I can speak on that. I think it would actually make sense to have any form of industry regular forum for the various parties to get together to educate and update users on how each model is different and how they are doing.
So in classic, we have grown significantly in the past 12 months. We have been in Nigeria for about two years and we have grown tremendously.
On average, we have about 10,000 new ads posted on OLX website. We make sure that we take all precaution necessary to review those ads and ensure we do not allow ads that do not meet our quality standard.
We have continued to innovate to provide high quality content for our users.
Trust and safety
Trust and safety is our number one priority and frankly if we don’t solve that we won’t be here in 12 months. It is essential that we have users build trust and confidence in our platform.
There are other steps we have taken that are actually unique to the Nigerian market. There are several initiatives that we are taking to help improve user’s trust too.
The first is around user communication and awareness so in all of marketing ads and communication we continue to emphasis the need for the user to be safe and the need for the user to transact using some of our guidelines.
Second, we have started to verify our ads in 13 categories. This is a deviation from what happens anywhere else. They don’t do this in India or Brazil.
We realise the unique situation and nuance of our Nigerian market and we have taken the extra step of validating the ads of cars and real estate postings, and we are hoping that it would continue to give users confidence in the ads on our platform.
We continue to tighten control around who can use the site and we block users who have been reported to us by our users.
We try everything we can. Frankly, we are not perfect and we can’t do it all by ourselves and we continue to implore our users to report by emailing us or by calling us or by letting us know on facebook.
We have multiple channels through which our users can contact us, we actually implore them to do so, to report cases they may not be comfortable with so that we can take action.
We block every single report once we verify that the user is not legitimate.
Justification of control as crime persists
There was an incident in December 2014, this same lady committed the crime and as soon as that was discovered we blocked all accounts associated with that person and so she couldn’t post. Other folks associated with her couldn’t post as well on OLX.
We banned them from the site. The form that was used here was from the buyers end so they were responding to an ad. The mother who posted her ad clearly went through because she is a valid legitimate user.
Nanny and her relatives could not post because we had banned them but in this case they were then responding to a legitimate ad.
So, we have taken steps to prevent those bad actors from perpetuating similar incidents. Unfortunately, they came from the other angle this time.
Again, we have to always be one step ahead; this will again allow us to rethink, innovate and make the platform even better to protect both the seller’s end and the buyer’s end.
Navigating negative brand perception
I think it speaks back to what we discussed earlier about user education. If users truly understand business model they will realise that it is very similar to this mother posting an ad in the newspaper looking for a nanny or a driver then people respond to her directly.
It is exactly the same model. We are essentially the online version of newspapers’ classifieds, there is no difference. But I think users don’t understand that yet.
So, if this case has been that this nanny was found through responding to an ad posted by the mother in the newspaper, what would you have advised? I don’t think it’s fair for anyone to blame the newspaper and it would be wrong for anyone to hold the newspaper responsible.
But we also realise that it can impact the brand and so we need to go beyond standard classified model to think of innovative processes and check that we can put in place to safeguard our users.
Impact of negative happenings on the business
We haven’t seen a decline in traffic to the site; I think that speaks to the fact that those who already use OLX understand how it works.
So it is a case of new users that haven’t known what we do, and we will continue to educate them to come on board.
Most vulnerable market
That is an internal confidential data point. I can tell you for a fact that in Nigeria, we are having to innovate, and putting more checks that are not in place elsewhere.
That can give you an indication if you are looking for comparison.
Alleged staff arrest
That is false, if you go to the newspaper site that carried that story, it has been taken down. We followed up with them to understand the source of their information but they couldn’t produce anything.
That story is completely false.
Economic impact
This is the type of question we have been thinking about answering in a more tangible and quantitative way. There are about 1,200 ads currently on the website. The value in terms of the naira amount the items are going for, if you look at houses, cars, fashion, and so on, the average is about a N100,000.
You can do the mathematics with 1,200 postings with an average value of N100,000. It is a huge number. We will do a more in-depth analysis for those that successfully trade on the platform, the value of that and the contribution of OLX to the Nigerian economy.
We know it is huge and from our indicators and we are taking steps to deep dive and conduct research to share much more widely with the public.
From people point of view we are creating significant jobs through our full time staff and also through those who work with us on contract capacity.
How OLX makes money from free ads
If you go to our site and click on the mobile phones category, this is a sponsored link and they pay us to put their ads there. Competitors pay us to put their ads.
It is similar to google search. When you search on google it is free but there are certain links at the top that people pay for. OLX is very similar model to that.
Value in Nigeria
It is significant. There was a public report that classified space generated an estimated $92 billion revenue globally in 2014. That’s from all sources, online and offline, most of it 77 per cent, is online.
It is a very significant business and the players are very sophisticated, global players that are looking to expand their reach.
Diversification
We are not at this point; for really two reasons. One, we still have a lot of work ahead of us to fully take advantage of what the market has to offer. We are doing well, and very well too. We are the top player here potentially, and we have a long way to go.
We believe 100 per cent in focus, we believe in ‘do one thing and do it well’.
Second, we focus on what we do well, which is online classified. We are looking to deepening our expertise in classified space.
A South African brand?
I can understand why people think we are a South African company and it is fair enough. When we started the ads we were showing South African ads and even now we have a large business in South Africa; sometimes their ads show on DStv.
So, it is easy to associate the business with South Africa. We are beginning to think about repositioning.
We need to communicate accurate information that our headquarters is in Amsterdam and not in South Africa.
