Indian Online Classifieds Market: Quikr’s Verticalization Strategy

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.”

– 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 valuation 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 billion in 2014) had long been restricted to newspapers, radio and television. With the increased penetration of internet, online classifieds made inroads and gained popularity. According to an Edelweiss Report, in 2014, the global online classifieds segment stood at................

Quikr’s Verticalization Strategy

Quikr, India’s largest cross-category online classifieds platform was founded by Pranay and Thomas in 2008 in Mumbai, with the vision for buyers and sellers to ‘meet online, transact offline’. It was established as Kijiji.in, but with more investors coming in the name was changed to Quikr. In July 2013, Thomas quit the firm to launch a digital marketing company called Web Butter Jam. As of 2015, Quikr operated in 940 cities across India with 4.2 million listings, 30 million unique users and 26 million new customers per month............

Quikr’s Verticalization: Competitive Scenario

While Quikr had taken up verticalization and rebranding strategies, the battle for industry domination got intensified with Quikr competing not just with horizontal classified platforms but also with segment-specific players. Quikr competes with OLX and all other horizontal classified players. QuikrHomes competes with magicbricks, 99 acres and the likes. QuikrJobs goes head-on with players like Naukri and Monster...........

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. ..................

Exhibits

Exhibit I: Free Classified Ads Posting Websites in India

Exhibit II: India’s E-Commerce and Classifieds Market

Exhibit III: Quikr’s Honors and Awards

Exhibit IV: Explanation – Why India Cannot be ‘Winner-Takes-All’ Market

Exhibit V: Internet Users on Horizontal Classified Platforms and B2C Contribution

Exhibit VI: OLX India vs Quikr

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....................