OLX vs Quikr-What is happening and how both can be losers?
Go to any website or switch to any channel, frequently you will see the advertisements of 2 leading classifieds websites of India-Quikr and OLX.
Wonder what, these classifieds website are competing with each other in a market which is getting consolidated and either of these will survive. The one with highest ads of sellers will survive.
Both the website have their armies ready to fight with each other and these armies are funded by VCs. Venture funds are pouring money in these classifieds thinking that they will one day multiple their investments.
Here are some possibilities and threats these both sites may face and how they can overcome it by merging and having a single company instead of burning money by competing with each other, someone else with a smart and simple product may takeover the market.
Globalization: Globalization is no more a theory, its happening and a faster rate. A website successful in home country may very soon get the jump in Indian market. For example, the craigslist is top classifieds in USA and slowly people in India are becoming aware of this. What if craigslist starts heavy marketing in India?
Quikr and OLX ready to face the competition from craigslist?
Monopoly: If you have a monopoly in your market, you have a hold on terms and rules in your market. If Quikr and OLX merge, they will have no competition or next to nil competition in India. They will have a monopoly on C2C classifieds market. They do not have to separately invest in new technologies and features (For example Quikr launched Quikr NXT), both companies together can save costs by avoiding cascading of R&D and marketing cost.
Exit: I think in case Quikr and OLX merge, the valuation will jump. Valuation of merged entities will be higher than valuation of individual companies. Currently valuation is factorized by chance of losing out battle with each other. For example, valuation of OLX is impacted by the fact that it may lose to OLX and vice versa.
Entry Barrier: Currently both companies are competing in one niche, Buy and Sell (C2C) but what about B2C, Justdial has already established as a monopoly company in B2C classifieds niche.
If both companies merge, they can concentrate on B2C too. They don’t have to waste their resources only on fighting with each other for C2C market.
Finally in long run I believe that Justdial may throw these both companies out of business. Justdial is successful in B2C and can very soon takeover C2C market, but I believe for time being Justdial is avoiding the tough war and smartly watching.
Wait and watch is what seems to be good for Justdial at this moment. Justdial at any given day can enter the C2C market aggressively and give a hard competition to Quikr and OLX.
Justdial has monopoly in phone classifieds niche and can effectively use it to enter C2C niche. Quikr and OLX again have to invest in R&D and marketing to fight the phone classifieds niche.
Other good reads:
Tikshare is the next big thing which is resounding in the classifieds market. i guess tikshare may give a stiff competetion to big guns like Quikr and olx in the days to come. Tikshare classifieds would make people go crazy because its completly free compared to any of the above sites. Gud luck Tikshare classifieds.
Yes each of the users on Tikshare should spread the words. Let Tikshare rock and benefit from the ongoing fight between 2 giants.
I will Say Nice Suggestion to Both the Companies by a Well know financial planner
You wrote "Someone with smart and simple product may takeover" and i would like to inform the readers here we already have a new classified portal by the name of Zamroo.com launched 9-10 months back which is gaining grounds very very fast. Their product is a far far better than Quikr or OLX.
Infact I personally have seen OLX introducing Trending Ads & Ads in Spotlight being copied from Zamroo.
These guys are going to take over OLX & Quikr very soon. Visit the site www.zamroo.com to believe it.