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Indian Online Classifieds Market: Quikr’s Verticalization Strategy

CASE STUDY, STRATEGIC MANAGEMENT
ET Cases, 12 Pages

Case Preview

Indian Online Classifieds Market: Quikr’s Verticalization Strategy

 

“Online classifieds work on the network effect principle. It strongly favours the winner. Because you are large, you get more buyers and hence, you get more sellers.”1

– Pranay Chulet, Founder and CEO, Quikr


Starting August 2015, Quikr, the largest cross-category (or horizontal) online classifieds platform started introducing specific vertical classified websites – QuikrCars, QuikrHomes, QuikrJobs and QuikrServices. Quikr, co-founded in 2008 by IIT-IIM alumnus, Pranay Chulet (Pranay) and Jiby Thomas (Thomas) turned unicorn with $1.5 billion valuation2 in November 2015. Quikr at first operated in 13 categories like real estate, jobs, mobile phones, etc. However, it grew rapidly owing to its innovations, its sites’ simplified usage, serving around 1,000 Indian cities with 12 million listings and 20 million responses every month. However, realizing the challenges in the horizontal classified, Quikr aggressively took up to verticalization strategy in realty, jobs and automobile sectors – QuikrHomes, QuikrJobs and QuikrCars – with opportune acquisitions in these sectors during 2015-2016. Would Quikr’s verticalization strategy prove profitable and keep competition at bay?

Indian Online Classified Market: Horrified with Horizontals?

Online classifieds originated in the 1990s, when Craig Newmark created an e-mail distribution list (Craigslist) with co-workers and friends to publicize events in  the San Francisco Bay Area in 1995. Later, Craigslist went on to become the most popular classified website world-wide.

The global advertising market (valued at $200 billion3 in 2014) had long been restricted to newspapers, radio and television.................

 



1 Manu Kaushik, “Sell it off – OLX India vs Quikr”, http://www.businesstoday.in/magazine/cover-story/e-commerce-onlineclassified-market-olx-india-vs-quickr/story/218863.html, May 24th 2015 (accessed date: January 4th 2016)
2 Samidha Sharma, “Quikr turns unicorn with $1.5bn valuation”, http://timesofindia.indiatimes.com/tech/tech-news/Quikrturns-unicorn-with-1-5bn-valuation/articleshow/49266044.cms, October 8th 2015 (accessed date: January 4th 2016)
3 “Online Classifieds – The History & Future of Online Classifieds Industry”, http://www.ajclassifieds.net/online-classifieds/,February 10th 2014 (accessed date: January 4th 2016)

Teaching Note Preview

Indian Online Classifieds Market: Quikr’s Verticalization Strategy

 

Synopsis

During 2015, Quikr, the largest cross-category (horizontal) online classifieds platform, changed track and adopted verticalization strategy. It started introducing specific vertical classified websites – QuikrCars, QuikrHomes, QuikrJobs, etc. Quikr earlier operated in categories like real estate, jobs, household goods, mobile phones and electronics, etc., all on a single platform (website). However, realizing the challenges in the horizontal classifieds, Quikr aggressively took up to verticalization strategy in realty, jobs, services and automobile sectors – QuikrHomes, QuikrJobs, QuikrServices and QuikrCars – with opportune acquisitions in these sectors during 2015-2016. The case study can be used to analyze how a firm’s strategy emerges and would Quikr’s verticalization strategy prove profitable and keep competition at bay?

Prerequisite Conceptual Understanding (PCU)/Before the Classroom Discussion

The students/participants could be asked to visit Quikr’s horizontal and vertical classified sites – Quikr.com, QuikrHomes.com, QuikrCars.com, QuikrJobs.com and QuikrServices.com – and its competitor sites like OLX, MagicBricks, 99Acres, CarTrade, Carwale, Naukri, etc., and analyze how Quikr’s sites fare when compared with its competitors in terms of registered users, listings, user-friendliness, etc.

Being prepared with the concepts of Competitive Strategy, Horizontal and Verticalization strategies and Michael Porter’s Five Forces model would be helpful in better analysis of the case facts and understanding of the concepts.

Case Positioning and Setting

This case study can be used in the MBA program for the following:

  • • Strategy Course – Michael Porter’s Five Forces Model, Competitive Strategy, Horizontal and Verticalization Strategies


Assignment Questions

  • I. What is the nature of Indian online classifieds market? What are the characteristics? Analyze the firm rivalry within online classifieds market with Michael E. Porter’s Five Forces model.
  • II. What is a verticalization strategy? Why do you think Quikr has adopted a verticalization (as opposed to earlier horizontal) strategy with its QuikrHomes and QuikrCars?
  • III. ..................................................

 

Preamble to the Case Study Analysis and Suggested Orchestration

This case study provides an opportunity to understand the nature, characteristics and competitive scenario of the Indian online classifieds market. It also  introduces to the cross-category/horizontal classifieds platforms and vertical classifieds platforms. It helps the students/participants to analyze the challenges faced in the cross-category classifieds and the factors that led to Quikr’s verticalization strategy and its impact on the market. It also helps the  students/participants analyze the strategies that Quikr’s competitors can come up with in response to its verticalization strategy. The case study analysis was carried out as presented in Exhibit (TN)-I....................


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Abstract

This case study introduces the participants to two important constructs of strategy: emergence of a firm’s strategy and industry structure modelling a firm’s strategy.  Quikr, India’s largest online cross-category (horizontal) classifieds platform has been reinventing itself since its inception in 2008. Co-founded by IIT-IIM alumnus, Pranay Chulet and Jiby Thomas, Quikr grew rapidly with 12 million listings and 20 million responses every month. Headquartered in Bangalore (on a sprawling 4-acre campus), Quikr has presence in 1,000 Indian cities and operates majorly in 13 categories - mobile phones, real estate, jobs, cars, etc. With a total funding of $350 million from seven funding rounds since its inception, Quikr had been aggressively following a verticalization strategy in realty and automobile sectors – QuikrHomes and QuikrCars - with opportune acquisitions in the last few months. Why did Quikr change its track and adopt verticalization strategy? What are the challenges in horizontal classifieds strategy? Would Quikr be able to garner market traction and become profitable with verticalization strategy? How would Quikr’s strategy affect its competitors? How  would the competitors react?



Pedagogical Objectives

  • To understand the business dynamics of Indian online classifieds market and analyze the nature of firm rivalry using Michael Porter’s Five Forces Model
  • To debate on the impending challenges with the horizontal classifieds strategy followed by most of the players and to discuss and debate on why Quikr has adopted a verticalization strategy to further its market leadership in Indian online classifieds market
  • To examine the competitive scenario, i.e., how would Quikr’s new competitors respond to Quikr’s verticalization strategy?

Case Positioning and Setting
This case study can be used in the MBA program for the following:

  • Strategy Course - Michael Porter’s Five Forces Model, Competitive Strategy, Horizontal and Verticalization Strategies



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- Case Study
- Teaching Note (**ONLY for Academicians)
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