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The Broken Online Classified Services in India [And An Opportunity To Create Value]

In India Online by Ashish Sinha31 Comments

The online classified market is a huge opportunity in India and while there are leaders in job and matrimony space, this article will focus on the real estate classified portals and how they have lost a sense of value.

The primary business model of a classified portal (except craiglist) is to monetize via lead generation channel or charge people for listings. Operationally, classified services enable both the parties (i.e. seller and buyer) to discover each other given a certain context (which could be house for rent/sale, marriage proposal etc etc).

Over the last 1 week, I have used pretty much all the classified listing sites (makaan.com, click.in, locanto.in, craiglist, 99acres, quikr, clickindia etc etc) and here are a few observations [to give you the context, I have been searching for a 2 BHK house in Bangalore].

A. Expired Listings Anyone?

Surprisingly, most of the classified sites do not expire listings. 30 days should be the default timeline for any listing and one is supposed to expire them. The reason for not killing these listings is obvious – SEO. These listings are indexed and provide a lot of Google juice to these sites. So why kill it?

Does this strategy add value? No. I am least interested in finding a 2010 ad.

The best way to approach this is to create relevant landing pages, instead of trading value with free traffic.we sell everything

B. The Rush to Register/Add More User Accounts

In one of the (top classified) sites, you need to share your email id to connect to the listing owner (i.e. you have an option to not register and simply enter your email id/mobile number). And once you do that, the site sends you registration details with an auto generated password (in spite of you opting not to register)!

While I understand the need for privacy (i.e. not to share email id/mobile number of the listing owner), I strongly recommend these sites to follow craiglist model – craiglist leaves the privacy option of showing email id/mobile number to the seller. This is the most practical approach to classified, instead of building a forced-privacy wall for each and every listing (and add no value in the process).

C. Broken Search

What’s the point in showing “Openings for Bengali Sub Editor” in search result page for a query like “2bhk sarjapura for rent”?

Search is the most important element in a classified service and should be intelligent enough to understand the concept of “proximity”/”similar”. Right now, it’s limited to keyword searches and worst of it, there is an attempt to push irrelevant results, in order to fill up the page.

D. Broker or Owner?

Surprisingly, a lot of listings that are classified as ‘owner listings’ are actually from broker (and these listings carry ‘Brokers Excuse’ note as well]! I agree that a site cannot afford to verify the listings, but here is a user experience to take note of.

On craiglist, I flagged couple of listings as overpost/spam, while I didn’t share same love for other sites (though most of them also have equally bad categorization of listings). More on this behavior towards the end of this article.

Who is Killing the Classified Sites? Answer: Google

Oh well! Google is probably the largest source of traffic – so how is G killing these classified services?

Most of the classified sites have beautifully blended Google adsense within the listing pages and in-between the search results.  Infact, its so beautifully blended that you just might end up clicking on the ad, mistaking the ad as a listing!

Nothing wrong with that – just that ‘easy money’ (i.e. adsense) has made these sites lose sense of value creation and the focus now is to bring more traffic to the site, which in turn brings more adsense money (i.e. keep focused on short term business goals).

The question that needs to be asked (especially by VC firms who have invested in these companies) is what are the right metrics for online classified sites?

More Traffic?

OR

Conversion?

Where is more money and an opportunity to create differentiation? An opportunity to create a long term business? Is banner advertising the best way to monetize these services?

In fact, I’d say that it’ll take truckload of guts to say ‘we are not a free classified site. we charge money because we deliver value’. That is, change the game. Be accountable.

I hope some startup takes this gutsy approach and create a more meaningful experience.

For the rest of classified sites, please do not try to create a namesake free marketplace, because value you have delivered so far is so negligible that there is no respect for the service. Except for category specific sites (like Makaan for real estate), all of them (i.e. generalists) are happy with ‘Looking for men/women/escorts category’ listings.

Not a fail (each business model to itself), but why not just build an awesome dating site than a super-mediocre generalist service?

What Works In Online Classified Space in India?

Talking about rental business, services that has worked (for me) so far are bulletin boards and discovery made via one’s social network.

  • Some of the best leads came from internal Google groups (of apartment owners) or from bulletin boards of companies like Infosys/Wipro (which were forwarded to me via my existing social network). They were the most qualified leads and came sans broker fee!
  • Of all the classified service, craiglist delivered the most useful list. There hardly was any differentiation among others. This is precisely the reason why I spent effort in flagging inappropriate Craiglist listings, as the site delivered value to me.

I am not saying that classified sites do not add value. They do, but there are blinded by easy money (i.e. Google adsense) and have lost track of value creation part.

Do A Sanity Check

Mask the logo and you won’t be able to differentiate one service from another. That’s when you have failed to create a valuable business and if you are a VC firm that has invested in this business, it’s time to do a reality check (try using the service as a consumer and you will know what I am talking about).

What has been your experience with online classified services in India?

Recommended Read: The Lack of “Useful” Job Portal in India [And An Idea For One].

[Image credit: pasa47/Flickr]

Comments

  1. Brij

    Nice article…..this is a real problem and i also faced the same when i first arrived to Delhi. But people adapt according to the available services now a days no one hopes of finding a flat or apartment there. Every one is to look for a broker’s number in that particular area.

  2. naman

    I have tried the service multiple times and Sulekha is one site that stood out for me. The best thing was that somebody from sulekha called me to check if I had found a place.
    There search has good narrow down features. One category is treated different than other, hence different narrow down categories.

    They can always earn from Google while keep everything else clean. handling the bad search and expired ads will not decrease there Google adsense revenue.

    What they need is a system to switch off the adds once the need is fulfilled or a system to renew those ads. Allowing to do this offline would make it easier.

  3. Vinuth

    Sulekha and Common Floor are some saner options for real estate search. I have not encountered the broker posing as owner problem much on sulekha because they start charging money for more than 3 postings, etc.,

  4. Manoj M

    Very true, all the classified websites, picks up very well in the beginning but evenutally its a total mess.

  5. Sangeeta

    Loved the below lines:

    “In fact, I’d say that it’ll take truckload of guts to say ‘we are not a free classified site. we charge money because we deliver value’. That is, change the game. Be accountable.”

    Must admit, I will quote some of that to our prospects. (not related to classifieds though)

    Sangeeta

  6. Pranav Bhasin

    I think this domain needs to go social to move to the next level. If you notice what Quora did to Yahoo Answers, a new startup could come and do a makeover of classifieds the same way.

  7. Kamal Tripathi

    Spot on with the infosys/wipro thing. Sadly for me also that’s how it worked. Right now I am again looking for apartments in Sulekha, so far its good. But needless to say this space has untapped potential despite hordes of existing players.

  8. Aditya

    Thumbs up to the article. We too operate in the same space and always thought what was it that we could do differently. Finally we had an answer 2 months back and working on the same.

  9. Indus Khaitan

    All the listing services in India are badly broken / non-existent or have poor ux.

    1. Job boards/Freelance/Gig boards. Catering to big guys. A few big ones don’t even parse UTF-8 in the resumes correctly.

    2. Dating portals/Personals (Not matrimony). Non-existent. Some phoren sites are now pivoting to India!

    3. Property/Housing. Taken over by Agents and brokers

    4. Peer-to-peer tangible goods. A few small players

    5. Services. Like angieslist, what @Anand mentioned above

    These gonna be 100 crore biz, if done right. Now is the time! There is a way to build these from scratch and bypass the big guys (Jeez, I should parallely start a part-time incubator!)

    Cheers.

    1. Priyanka

      Its been a week since we went live @ http://www.holidaycooker.com. It is kind of a classified portal for holiday packages. The greatest benefit of using Holiday Cooker for ‘travelers’ is that they need not visit websites of multiple tour operators separately. They can send SMSes and Emails to tour operators directly from our website or view their contact details to talk to them. They can also shortlist packages for future reference. An alternative, easy way out for the traveler is to post requirement on our website or call us for the same for what we call as “cooked” or customized holidays. Based on the customer’s requirements, we get packages from tour operators, do a cross check research, compare price vs. quality and then present to the customer with the best option. In case there is any suitable alternative package, we also put that in front of the customer. The customer can choose the package which he thinks best suits his requirements. We also take care of the nitty gritties involved in planning a customized holiday thus adding value to the holiday planning & booking process.

      Any comments, suggestions and ideas are most welcome.

  10. Mohan

    good article Ashish,

    i tried these sites several times, but never found required information.
    On every site/page 80% of the screen real estate is stuffed with ads. Absolute crap and insane.

      1. Rahul

        Thanks Indus for pointing that out! That was due to a bug :) It will be harder to spot a mismatched listing now.

        Still treating-frequent-posters-as-brokers is not a 100% fool proof strategy. Assumption is that a broker will not take the pains to create and use a new email every 2-3 listings.

        We will be adding more signals from text analysis (ex: posts asking for brokerage) and detection of emails from real estate company domains (ex: sender@xyzrealty.com, sender@brigadegroup.com) sometime later. And the fallback would be flagging by user.

      2. Rahul

        Thanks Indus for pointing that out! That was due to a bug :) It will be harder to spot a mismatched listing now.

        Still treating-frequent-posters-as-brokers is not a 100% fool proof strategy. Assumption is that a broker will not take the pains to create and use a new email every 2-3 listings.

        We will be adding more signals from text analysis (ex: posts asking for brokerage) and detection of emails from real estate company domains (ex: xyzrealty dot com) sometime later. And the fallback would be flagging by user.

  11. shitij

    Sulekha stands out. It charges (asks for a donation) after you have successfully transacted, offers convenient premium listings, etc. I’v had an excellent experience with them twice.
    I wanted to sell my car and posted on Carwale.com after paying some 700 rupees. Within 15 mins somebody from sulekha called and said can we post your ad on sulekha for free, after i said yes they did.
    i got 10x more qualified queries from sulekha and was able to sell quickly. after that i made a donation.
    carwale had a 100% refund policy, but i never got a penny back from them.
    I’v since posted alot of other general classifieds on sulekha and those too pre-paid.

  12. Varghese David

    Free Classifieds Websites are going to remain like this & if you are not getting any revenue from the classifieds poster, then any website owner would be pushed to do these sort of adsense things to get some money. I think it’s fair. Let me tell you Classifieds Websites have become the best place from SEO point of view for many website-owners and more than promoting the products, Classifieds Website are being used for promoting the websites.

  13. Pradeep

    Completely agree with you Ashish. There is a need of such classified website. Even the emails that they send for renewing ads looks like as if they are eager to push me to renew the ads.

    I post service related ads on quikr and click India. Due to this google factors more than 60% calls that I receive is non relevant. Because google’s meta description display a different number and person looking for a different company at times don’t even click ad and just make a call and that’s the status of these big sites:)

  14. shameek

    Did you check out roopit.com ? To me, that’s one site which is trying to help people buy and sell things without doing yet another craiglist clone, all the while keeping the user’s needs central

  15. Neel Shah

    I am one of the partners @ Kuch Bhi Bikega which is a tele-classifieds platform.

    Rather than just being online, we provide the classified ad posting service on phone itself. No e-commerce required as we have agents spread across the city we operate in. Have got good response so far from the customers as well as partners. Still working on the marketing part and improving the website.

    Check out the pluggdin review article on KBB – http://www.pluggd.in/kuchbhibikega-buy-sell-using-phone-297/. Do give your reviews on this business model.

  16. Sanju Thomas

    I am the co-founder of Ghar360 and we are working closely with builders for quite some time now. The main problem they are facing now is is they want to post their properties details in multiple real websites and classified sites but they don't have time to go to each site and post,manage leads they are getting through those sites. So they are looking for a integrated solution which post their property details to multiple sites and manage from a single admin.

  17. Sanju Thomas

    I am the co-founder of Ghar360 and we are working closely with builders for quite some time now. The main problem they are facing now is is they want to post their properties details in multiple real websites and classified sites but they don't have time to go to each site and post,manage leads they are getting through those sites. So they are looking for a integrated solution which post their property details to multiple sites and manage from a single admin.

  18. Sanju Thomas

    I am the co-founder of Ghar360 and we are working closely with builders for quite some time now. The main problem they are facing now is is they want to post their properties details in multiple real websites and classified sites but they don't have time to go to each site and post,manage leads they are getting through those sites. So they are looking for a integrated solution which post their property details to multiple sites and manage from a single admin.

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