Quikr to focus on five business segments in verticalization push
The five categories—automobiles, real estate, jobs, services and customer-to-customer sales— account for 90% of Quikr’s listings
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Online classifieds portal Quikr has identified five key business segments—automobiles, real estate, jobs, services and customer-to-customer sales—to focus on in an attempt to explore new sources of revenue and fend off competition from other venture capital-backed businesses that have emerged in each of these categories.
These five categories account for about 90% of the 10 million listings on the platform.
The company has also started facilitating payments and logistics services at no cost to both sellers and buyers to transform into a full-fledged marketplace for used goods.
While QuikrCars was rolled out last month as a separate segment, the other categories will be launched in the next three to four weeks.
“Our kind of business is very brand-building driven and the biggest investment in this space is marketing. The reason it (creating verticals and sub-brands) makes a lot of sense is, every dollar we spend on QuikrHomes also helps QuikrCars because people know about the company,” said Pranay Chulet, co-founder and chief executive at Quikr.
Quikr will also explore possible acquisitions of “good assets at a fair price” in all of these segments as well as in logistics and payments to fuel growth. The company has put together a leadership team comprising senior executives from Timesjobs, Yatra and Sulekha, among others, to helm the verticals.
The verticalization is a step towards driving revenues for the company, which was valued at almost $1 billion during its last funding round in April. Quikr has, since its inception in 2008, raised about $346 million from investors such as Investment AB Kinnevik, Tiger Global Management, Steadview Capital Management and Matrix Partners India, among others.
To be sure, Quikr has revenues flowing in through third-party advertisements, lead generation for car dealers and real estate brokers and paid listings by sellers, which propels them to top search results on the platform. At present, Quikr has about 1 million paid listings.
The new verticals are expected to fetch Quikr at least three times its present revenue as they equip the company to launch targeted advertisement platforms for third-party merchants. Quikr may also look at monetizing the logistics services once it catches the imagination of consumers, apart from charging them for ancillary services such as loan facilitation for vehicle and real estate purchases.
“For cars and homes, it will be more lead generation. In the services and jobs categories, we are attaching a fee to the success of the transaction,” said Chulet. “So, for cars and homes, it will be less (about) transactions going through Quikr. For jobs and services, some of the transactions will go through Quikr and on the selling and buying of goods, all transactions will go through Quikr.”
Experts said the transition was a common phenomenon among home-grown consumer Internet companies, which are willing to explore new avenues to generate revenues, especially after mopping up several millions of dollars from institutional investors.
For instance, online marketplace Snapdeal started out as a deals platform, while Zomato has launched order booking, payment and delivery to tackle competition from emerging businesses such as Swiggy and TinyOwl, among others.
Besides, verticalization is not just a way to open up multiple revenue sources but also carve out a brand identity.
“Verticalization helps you convey what you don’t do. As you serve a lot of people, your identity gets diffused, so the more you verticalize, you signal what you don’t do,” said Anand Ramanathan, director at KPMG Advisory Services. “Ultimately, when competition catches up, you have to focus on a few things and show where your competency lies. Thus, the quality of transactions also improves if you verticalize,” he added.
Quikr’s competitor in the classifieds space, South Africa’s Naspers-backed OLX, has, however, restricted itself to listings.