I've got a warning for you Craigslist. OLX is coming for you. OLX is a global classified advertising site, and they are one of the world's top 100 web destinations. Think of them as the biggest company you've never heard of. How big? OLX has 50 million unique monthly visitors, 400 million page views, and they're in 87 countries with dozens of languages. And they've set their sites on the US. Craigslist in particular.
I was fortunate enough to spend some time speaking with Fabrice Grinda, the CEO of OLX, and a certified entrepreneur, who has built several companies, including the ebay of India and Brazil, as well as the mobile wallpaper and ringtone site, Zingy, which was sold for $80 million after just a few years. Suffice it to say Fabrice has proven he knows how to build an online business.
Who is Mr. Grinda? Born in Nice, France, a Princeton graduate, and a fan of Craigslist and eBay, Fabrice has taken the ideas of these internet giants and applied them to the global economy. Don't think he's a copycat. Understanding how to market to a global audience is no small matter, and while OLX is built on the same idea as Craigslist, it features a numer of quality improvements that Fabrice feels Craigslist should have done, but decided not to.
What improvements?
2) Mobile Site - mobile is big in Japan and Europe, and OLX has a tested mobile site that allows you to use OLX with your phone almost as well as you use the site.
3) OLX allows you to host video and pictures straight from the site, while Craigslist forces you to host them elsewhere.
4) You need HTML to create an ad in Craigslist that isn't boring. OLX features a WYSIWYG Ajax editor that is much easier for non-technical folks.
5) OLX has sophisticated search functions based on usability and location.
6) OLX is connected to social media sites, allowing you to drive traffic to and from your network profiles.
7) OLX allows businesses to upload products through an XML feed. You can to that as a PowerSeller on eBay, but it costs a fee (This is a killer small business application).
8) 24/7 Customer Service.
I have to say - what Fabrice was saying is pretty cool. I just recently completed a training on selling products using social media, and I specifically covered the use of retail locations using Craigslist to sell. OLX offers a richer interface, and if they can build traffic, they may be the Facebook of the Classifieds (clean design, sexy apps, and sophisticated networking). That's a powerful combination with the money and traffic from the global sections. Add in partners in other countries looking to break into the US market, and you have a potent competitor.
That information was great, and I'll definitely be looking at OLX, but one tough question remained. Craigslist is an internet darling because they're not pretentious. They aren't looking to beat anyone, because they aren't really into it for the competition. They're insanely profitable, keep a low employee count, and aren't interested in taking over the world. How do you compete with someone like that? how do you compete with someone who isn't trying to monetize their site? Newspapers haven't figured out how to do this yet, but Fabrice thinks he has the process in place.
First - they already are the global leader. The US is gravy to them, and even if they end up number 2, they'll end up a very profitable number two. Second, Fabrice thinks Craigslist is sitting on their laurels, and lacking capital and drive, won't be able to compete with the changes and superior usability of OLX. From a design standpoint, Fabrice is right. There really isn't a comparison. The real question is whether the simplicity of Craigslist is more desirable than the full sevice of OLX.
Inertia is a powerful thing and one only has to compare early Macs and PC's to see a better product isn't always the winner in a marketplace. Craigslist rules the roost, but they've not faced another free competitor. OLX doesn't need to build marketshare to survive. With 125 employees, OLX has one more big advantage - a customer service staff of over 60 people.
I asked what 60 people could possibly do, and Fabrice explained they manually go over entries. Because they're free, and because people do things like ship bicycles to Nigeria and expect payment, fraud and spam are the two biggest concerns of any online site. Automatic filters catch half of the spam (over six million entries), but fully 2/3's of the posts that get through are manually deleted in a battle to ensure legitimacy. That's the price of free, and while that means the company incurs heavy costs, it also means they can adapt to the marketplace. Actively working to monetize the site provides the resources needed to make changes. Craigslist may be obscenely profitable, but they're not hungry.
It's too early to tell how much of an impact OLX will have on the American market. It certainly piqued my interest, and I'll be testing it for my products and clients. The real question is what consumer's want. Craigslist works, but do we want more? I'm not sure, but I wouldn't bet against Fabrice Grinda.
