Why the Indian digital classifieds industry has to step up its localisation game

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While the term ‘Classified Advertising’ might seem like a modern term, you would be surprised to know that outdoor advertising has been in vogue for about 4,000 years now.

Throughout history, kingdoms and legions have had advertisements engraved, carved, embroidered and put up for general public. The first newspaper classified advertisement was published in the year 1704 in the newspaper Boston Newsletter.

Although the classified advertising market has had an interesting history, it has steadily evolved with time and technology.

The technology disruption

With the advent of technology and the decline of print journalism, classifieds advertising witnessed a dip in revenues. In the US, for example, revenues of classified advertising fell from $15,898 million to $4,626 million.

Online classified websites like Craigslist ushered in the era of online classifieds in the year 1995, and today, the entire market for classified ads is shifting from newspapers to digital media like websites and mobile apps.

India is no stranger to this trend either. The Indian digital classifieds industry is estimated to stand at Rs. 2,900 crores by the end of 2015. According to Digital Classifieds in India 2020 – a report compiled by consulting firm KPMG and Google, the industry grew at a CAGR of 29.5%. It is expected that this growth will retain its momentum, with revenues expected to grow at a CAGR of 22%, reaching figures up to Rs. 7,700 – 7,999 crores by 2020.

There are a few reasons that could be attributed for the stunning growth of the classifieds industry in India. Rising urbanisation and increasing disposable income; penetration of smartphones and internet into the masses; and a large chunk of the population being youth – these are some of the most important factors fuelling the growth of the classifieds advertising market in India.

The transition from traditional classifieds advertisements to the digital format has resulted in a number of verticals as well as horizontal classifieds portals. At this juncture, it is important to understand the difference between horizontal and vertical classifieds platforms.

The term vertical model refers to portals/apps that offer goods and services in a particular sector, eg. real estate, recruitment, and automotive. The term horizontal model refers to portals/apps that offer a wide range of goods/services across sectors.

Structure of Indian digital classifieds industry

In the Indian digital classifieds industry is dominated by horizontal classifieds portals. With 32% share of the pie, horizontal classifieds portals have managed to acquire brand recall with heavy advertising across mass media platforms like television, newspapers, and Internet.

Vertical classified portals were dominated by recruitment portals (25.2%), followed by matrimony portals (17.2%) and B2B portals (10.5%). Let us look at the most prominent verticals in the Indian classifieds industry.

Horizontal classifieds

Horizontal classifieds is the most dominant player in the pie of classifieds verticals in India. Spanning across B2B, B2C, and C2C, horizontal classifieds enjoys the biggest share in the Indian horizontal classifieds industry.

Horizontal classifieds claimed a 23.7% share in 2011, and stands today at 32.0% in 2015. It is estimated that horizontal classifieds portals will continue to dominate the Indian classifieds sector with a 29.5% share in the year 2020.

Top horizontal classifieds portals in India:

PortalAppLanguage localisation
OLXYesYes (Hindi)
QuikrYesYes (7 local languages)
SulekhaYesNo
ClickoozYesNo
LocantoYesNo
ClickindiaYesNo

From the above table, it is clear that while most portals have made the switch to apps, not all of them have focused on local language optimisation. With the biggest share of the Indian classifieds market, it is perhaps logical that the two biggest players in the field have focused on local language inputs and reaped the rewards.

Online recruitment classifieds

Online recruitment portals are mostly B2C portals, as they offer digital classifieds that connect job seekers to businesses and enterprises. The monetisation is mostly from the recruiters’ end, and online recruitment portals continue to occupy a major share in the sector of Indian classified portals.

Online recruitment portals claimed the largest chunk with 38.8% in 2011, and today stand at 25.2%. The dip in share is obvious, however in terms of numbers, the future holds a lot of potential. While revenues stood at 726 crores in 2015, future revenues in the year 2020 are estimated to nearly double to Rs. 1500 crores.

The future of online recruitment portals looks bright, thanks to governmental initiatives like ‘Make in India’. Moreover, the National Policy for Skill Development aims to train and provide skills to more than 40 crore citizens. Initiatives like ‘Start Up India’ are expected to further boost the growth of the online recruitment sector.

Top recruitment classifieds portals in India:

PortalApp
Language localisation
Language localisation
Language localisation
NaukriYesNo
MonsterYesNo
TimesjobsYesNo
NaukrihubNoNo
ClickjobsNoNo

It is clear from the above data that job portals cater to a particular niche in the population (English speaking, educated). There has been very little effort to optimise their portals and apps in local languages.

Real estate classifieds

Traditionally, the oldest business among all the sectors, purchasing land and property has been integral to mankind’s existence since thousands of years. In fact, this might be a factor in the inertia to move to new, digital media.

However, the shift seems imminent, and this can be seen through the numbers. In 2011, real estate classified portals claimed 3.8% share of the market, but nearly doubled to 7.5%, with revenues of Rs. 215 crores in 2015. The future looks promising, with 11.4% share and revenues of Rs. 900 crores in the year 2020.

With greater Internet and mobile penetration playing a key role in the future, urbanisation will also play a key role in the future of real estate classifieds portals. It is projected that there will 300 million new urban dwellers in India by the year 2050.

Top real estate classifieds portals in India:

PortalAppLanguage localisation
Magic BricksYesNo
CommonfloorYesNo
99acresYesNo
IndiapropertyYesNo
HousingYesNo

Real estate portals mostly target the upper-middle class or upper class citizens, which could probably explain their lack of local language optimisation. However, all the above portals refined their searches to feature local properties. It is surprising that there is no local language optimisation.

Matrimony classifieds

With a rich, diverse culture that is firmly rooted to traditions and customs, marriages and weddings are an integral part of Indian society. It is interesting therefore to find that matrimony is one of the largest verticals in the Indian classifieds sector.

Matrimony portals stood at 19.5% of the sector in 2011, and 17.2% in 2015. It is predicted that Matrimonial portals will continue to remain a strong stakeholder in the Indian classifieds market with 15.4% in the year 2020. With revenues of Rs. 495 crores in 2015, it is estimated to grow to revenues of Rs. 1200 crores.

The growth of matrimonial portals could also be attributed to the number of citizens in India in the 15 – 30 age bracket. This age bracket will be eligible for marriage in the next five years, and also be a group that has a high disposable income and access to smartphones and internet.

Top matrimony classifieds portals in India:

PortalAppLanguage localisation
ShaadiYesNo
BharatmatrimonyYesNo
JeevansaathiYesNo
SimplymarryYesNo

Marriage portals have search filters based on language, and even separate portals based on the mother tongue (Bengalimatrimony.com, Hindimatrimony.com). Surprisingly, however, none of the sites had local language optimisation, which is a huge missed opportunity.

Automobile classifieds

The Automobile market, traditionally a brick and mortar business where customers liked to see, touch and feel the vehicle before purchasing, faced a lot of initial inertia before jumping on to the digital bandwagon.

While the percentage share of automobile classifieds vertical was at 2.3% in 2011, it witnessed steady growth to reach 5.5% in 2015. However, the future looks extremely bright, with estimates predicting 9.2% share in 2020. With revenues of INR 157 crores in 2015, the segment is expected to witness a whopping CAGR of 36% to reach INR 730 crores by 2020.

This could be attributed to a burgeoning market for new cars, with an estimated 3.64 million units sold in 2019, and the market for used cars standing at INR 90,000 crores today. Easy access to banks and financial institutions, and increasing population with disposable income are some of the reasons why this segment is expected to grow at a very fast rate.

Top automobile classifieds portals in India:

PortalApp  Language localisation
DroomYesNo
CardekhoYesNo
CarwaleYesNo
OLXYesYes (Hindi)
QuikrYesYes (7 Local languages)

Apart from the two big players (who are also horizontal classifieds players), there is very little local language optimisation on either the websites or the apps.

B2B classifieds portals

B2B classified services, which offer goods and services strictly for businesses, are among the largest category of online classified verticals in the Indian classifieds space. With a percentage share of 10.9% in 2011, the share remained steady in 2015 with 10.5%, and is expected to remain around the same stage at 9.7% in 2020.

In terms of revenue, the sector is expected to experience CAGR of 20%, and increase revenues from INR 303 crores in 2015, to INR 760 crores in 2020. The future of B2B businesses looks bright for a number of reasons. There are about 51 million SMEs in the country, and only 10 million of them are technology-ready. Moreover, the contribution of MSMEs to the GDP of the economy is expected to rise from 8% to 15% by 2020.

Top B2B classifieds portals in India:

 PortalAppLanguage localisation
IndiamartYesNo
TradeindiaYesNo
ExportersindiaYesNo
AlibabaYesYes (Hindi)

There is very little local language optimisation in the B2B classifieds sub-vertical, except for Alibaba.com, which runs a Hindi page along with numerous other international languages. Perhaps this could be an indicator for the other players in this sector.

In summary:

Source PDF: Digital Classifieds in India 2020 (a study by KPMG in India & Google)

Language localization in the Indian classifieds sector

The need for language localisation is imperative for classifieds advertising portals to achieve complete reach of the market. While it is common to read reports that India has the second largest English speaking population in the world, when the number is put in percentage of population terms, the wide gap is clear.

It is reported that close to 88% of Indians converse in their local language. This means that there is a huge scope for classifieds portals to make the switch to local language. To put the numbers in perspective, there are about 15,02,40,000 Indians without access to the internet in their own language. With rising mobile penetration and Internet access, the future of digital classifieds advertising lies in local language optimisation.

In order to achieve specific results and target niche groups, classifieds portals will need to tap into the vast non-English speaking groups. We have found that horizontal classifieds portals like Olx and Quikr are the only ones focusing on local language users, and their grasp over the segment should be an indicator of things to come.

References:

Digital classifieds could become $1.2-billion market in India by 2020: Report

Digital Classifieds In India 2020

The Evolution of Classified Ads

English or Hinglish – which will India choose?

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