HOW OLX CHANGED THE

CONSUMER INVOLVEMENT

IN THE SCRAP MARKET

KRATIKA TOMARNEIL MATHEWRAGHAV DUDEJASURBHI PURI

CONSUMER INVOLVEMENT?

It refers to o degree of information

processing or o extent of importance that a

consumer attaches to a product.

This affects the ways in which consumers

o seek, process, and transmit information

o make purchase decisions and o make post-purchase evaluation.

OLX? OLX (short for online exchange) operates as local

online marketplaces accessible through the internet and through apps on mobile phones.

Operates in 106+ local countries with offices and local operations in Argentina, Bangladesh, Brazil, India, Indonesia, Portugal, Poland and many other countries.

Originally founded in March 2006 by Internet entrepreneurs Fabrice Grinda and Alec Oxenford, OLX is now owned by global media and digital company Naspers.

OLX - INDIA Amarjit Batra, Head of OLX India in charge of business

development activities

The Company has captured 60% of online classified market share.

Companies traffic has grown 55 times since July 2013 and has had more than a billion page views

OLX India has a CAGR of 653% for 2 years.

Company Mission – to provide a platform for people in every city of India to sell, buy, rent etc. with other individuals.

Source: http://yourstory.com/2013/08/naspers-backed-olx-claims-to-have-60-market-share-in-indian-online-classifieds/

• OLX, the website utilizes the same process of classified advertisements in the virtual world just as that in newspapers, etc.

• In simple words, just 3 steps are required:

1. Visit the website, 2. Publish your advertisement in the website, 3. Internet users contact you if they are

interested in the deal.

HOW WE USED TO DEAL

WITH SCRAP • You ask your neighbours,

family, and friends about the ‘excess item’ in your home. The word of mouth is the way you advertise. 

• You go to your local shopkeeper who deals with ‘second hand item’. And in case of electronic goods, it is mostly the local mechanic who you turn to.

• If nothing works out, you may end up selling it to the junk dealer.

PARTY WEAR CASUALS

HOLI CLOTHES FLOOR WIPER

Indians would still hold on to their old belongings (values of which mostly fall eventually)

THE NEW WAY. THE OLX WAY.

• Online classifieds ads were rare and if existed, were mostly unreliable.

• OLX launched its Indian version OLX.in with the motto of “sab kuchh bikta hai” (Everything Gets Sold Here).

• Buyers have now option of choosing from a o vast selection of used items, o under their budget, o within their comfort zone, right from their

computer/mobile screen.

“sab kuchh bikta hai”

June 31st 2014

OLX.in and IMRB International [Indian Market Research Bureau]

(leading market research and consultancy)

OLX Consumer Research on Used-Goods and Selling Trends

(CRUST) Survey for 2013-14

• CRUST included a qualitative research followed by a quantitative study across 12 cities in the country

• Mumbai tops the clutter chart with more households stocking than anywhere else in India.

• As per the study, the whole of India hordes an estimated Rs 22,000 crore worth of goods.

CRUST - Why do Indians Stock

Goods?

1. they feel they will use it at a later date (24% of respondents), although that rarely happens.

2. Another 20% of the respondents said they have ceased to find value in using the product, implying a change in their taste and preferences, even though the product is in a good condition.

3. Emotional attachment (17% of respondents) to certain products also makes people hang on to them.

CRUST - Why Indians are selling used

goods?1. Buying the latest product has become increasingly

important for people today with 70% of respondents saying they sell used goods to earn quick cash and use it to upgrade to a better product. The desire to quickly upgrade has also led to a large number of nearly new, branded products that are up for sale at a much lower price. 

2. Space constraints - 60 % of respondents (mostly during house cleaning and shifting to a new home)

3. Non-Functionality of product (to the user) –

59% of respondents

4. Maintenance cost - 51% of respondents

CRUST - Why are Indians buying

used goods?

• Lower cost turned out to be the most critical factor

with 87% of respondents saying used goods marketplaces offer items that are less expensive, and 

• 83% percent of respondents saying that it gave them a good brand at a much cheaper price.

• 82% of respondents also said online marketplaces, such as OLX, came with higher seller trust, as they gave the opportunity to meet the seller and test the product before the purchase.

STRATEGIES USED BY OLX

Based on the Interviews with

Amarjit Singh Batra, CEO, Olx.in

• The site has been live since 2006 in India. However, the general public was unaware of the concept.

Main Job:

Educate the People.

“The strategy is simple. “

• Used TV campaigns and Social media also helps us to listen, and educate the audience, creating content to educate them.

• They integrated with NDTV and ran a puppet show called ‘Bechshala’ to educate consumers about how to post an ad.

• They recently ran a campaign designed only for YouTube

• We have to continue to offer the best experience. 

• We are a local site. There is the need to establish OLX in various key cities in India and in every city because that is where the users are. 

• We have to make sure that more and more people sell on the site. Converting someone to a seller is the most difficult task.

• We also have to make sure that as India is evolving and adapting to mobile phones, we offer the right mobile experience.

• OLX in in the Business of  Free Classifieds.

• While other sites have call services, or employees posting ads on behalf of sellers, OLX does not do that.

• Advertising has played a very critical role in changing consumers’ behaviour and mindset about how they perceive used goods.

CONCLUSIONAs you can see, OLX has truly transformed Consumer Involvement of the Scrap Market in India.

Their 2 biggest challenges:• They had to create the market - not take it

from somebody.• Converting someone to a seller is the most

difficult task.

• People now know that OLXo gives them money, o helps them de-clutter, and o helps them to buy or move to a better

thing.

• Almost every household knows about OLX today, even if they do not use the site.

THANK YOU