Naspers’ backed online classifieds platform OLX has launched a Business-to-Consumer (B2C) section, signalling the firm is inching closer to monetization after years operating as a freemium online exchange platform.
The move comes just weeks after the firm launched its new app across its markets to bolster user security and enhance their experiences. OLX is not exiting its Consumer-to-consumer model but the addition of a B2C section signifies the firm’s closer leap into featured listings.
Speaking to TechMoran in an interview Peter Ndiangu’i, OLX Kenya Country Manager said, “The Kenyan retail market is a 1 trillion industry but retailers such as Nakumatt, Tusky’s, Uchumi, Naivas only control about 15 percent of the market. Small scale retailers, farmers and electronics dealers, boutiques and hawkers control the rest of it.”
However, these kiosks don’t have the muscle to build an efficient infrastructure such as Nakumatt’s so OLX aims to give them a platform to thrive. The firm has began with the Construction and Agricultural sectors in a pilot phase as some of the chief drivers of the country’s GDP.
“The retail market is quiet fragmented with small traders shipping in a container or two to boutique owners and hawkers and electronic dealers downtown. We think that we can serve them and help them expand their businesses,”Ndiangu’i added.
Ndiangu’i added that though monetization is in the cuts as at the end of the day OLX needs to make money, it was not going to happen overnight. The firm’s major aim now is to ensure the agricultural and construction sectors become part and parcel of the economy. The earlier they shift to digital platforms the better it’s for them to be found by their customers.
Ndiangu’i imagines a day when sourcing of construction materials such as sand, gravel, ballast and even construction workers will all be online. He also thinks the hotel industry will gain so much when farmers can upload their fresh produce and sell them online.
Ndiangu’i says the B2C platform will be launched in other markets after its current pilot in Kenya. Most of the first markets likely to be launched in include Nigeria and India where small-scale retailers duplicate inventory to increase their sales unlike in markets like Poland where listings are purely consumer to consumer and sellers are not motivated to sell fast to make profit.
The firm is now working with farmer groups and NGO’s from around the country to help sign up as many farmers as possible and is encouraging players in the real estate and construction sector to utilize the platform for their own good. The addition of a B2C section will put OLX head-to-head with Rocket Internet’s Jumia which is gradually adopting a B2C model. This move might as well phase out Kaymu, an eBay-like marketplace also backed by Rocket Internet.
Recently, Ringier’s PigiaMe launched its B2C platform dubbed retailers section but the firm has not been all out marketing it. With its huge budget OLX’s B2C platform is highly likely to overshadow PigiaMe’s and Kaymu’s marketplaces. For Jumia, the marketplace doesn’t make sense in the long run unless the merchants give up their profit margins to sell their goods at a lower price than the market value.
Source: TechMoran