OLX revenue jumps 58%, turns profitable, puts pressure on rival Quikr

OLX had reported a loss of Rs 2.1 cr for the 12 months ending March 2016

Naspers-owned online classifieds platform OLX has become one of the first large e-commerce companies in India to turn profitable, putting even more pressure on Tiger Global-backed rival Quikr.

In disclosures to the registrar of companies for financial year 2016-17, the company reported a profit of Rs 8 crore on revenue of Rs 92.5 crore. Earnings rose 58 per cent from the previous year, according to the regulatory filings sourced from Tofler.

OLX had reported a loss of Rs 2.1 crore for the 12 months ending March 2016.

In June this year, Martin Scheepbouwer, chief executive of the classifieds business for Naspers (it has a majority stake in OLX), had said OLX “out executed”  Quikr in India. He, however, added that monetising the business in the country was still a few years away.

“India is a key early market for OLX, in which we had to deploy significant capital in the past years. This investment has been put to very good use by out-executing our main competitor, Quikr,” Scheepbouwer had said.

Quikr is far from turning profitable, and had a loss of Rs 534 crore during 2015-16. In May this year, the company claimed its online jobs portal, QuikrJobs, had broken even in the 12 months that ended March 2017.

The latest report comes when competition in India’s online classifieds space is heating, with global giant Amazon getting in the game. Trough its subsidiary, Junglee, it has begun focusing on the consumer-to-consumer (C2C) marketplace, with a major focus on high-value items such as smartphones.

Despite this, OLX says the highly competitive days in India’s online classifieds space are over. It said it has over four and a half times the number of daily active users rival Quikr has, and 2.3 times more active app users. Quikr has countered by claiming it has over 1.25 times the number of listings on OLX.

“The competitive battle against Quikr is over in our view. We’ll choose and spend better to mature the market. That will take some years, during which we can monetise lightly. We can charge for professionals and do some advertising,” Scheepbouwer had added in June. 

It is to be seen how OLX’s profitability affects Quikr, a company valued at $1.5 billion and having raised $364 million from investors so far. The disclosure will undoubtedly put more pressure on Quikr to turn profitable and provide a suitable exit to its investors, including Tiger Global, which has significantly scaled back its aggression in India.