Sulekha Falls Prey To Declining Ad Revenues – To Make Classified Paid
Sulekha a commerce search engine and classified site would soon become paid service, till now they are offering free classified but they shall continue to offer free classifieds as well (Check comments) for c2c segment and charging for only jobs and real estate segments in b2c segment.
The move would be fully implemented in 6 months to 1 year and may evoke repulsive action by the users.
They have already started experimenting with setting a limit on free usage, paying for premium ads, and voluntary payment in appreciation of service. According to them in the past month alone 50 people have paid an average of Rs 200 under the last category.
Why such move?
Companies like sulekha are finding it tough to bargain for higher ad rates with their advertisers due to the increased competition in the classified space and being just a classified site also plays with the quality of users visiting the site.
The company has already seen a 25% drop in its corporate ad revenues, owing to the slowdown, and expects it to go down by about 50% before the end of this fiscal.
Another point is they might be burning cash in providing features like call back and mobile sms for sending the listing details which is making it tough to fund the operations.
Reason for change?
The company is hoping to earn Rs 1 crore as user fee in the first year and take it up to Rs 40-50 crore in about 4 years.
Presently, Sulekha 1 crore visitors form India, among the three crore people who search the net for local commerce. It has a high rate of conversion from visits to transactions of about 70%.
According to an survey by sulekha 75% of it users have access to some mode of electronic payment, and so doesn’t expect any practical difficulties in establishing a payment mechanism.
Sulekha can really become a premium classified site and target an audience looking for additional features which could also increase their bargaining power with the advertisers.
This could be a boon in disguise for classified sites like olx, prachaar and many other portals because if sulekha doesn’t consider its decision of going paid then they would be seen losing a lot of traffic to others.
The move by sulekha does not look permanent because it is done in the wake of declining ad revenues so reverting it back is still an option as they have put a 1 year deadline. Instead of making C2C segment paid they could have opted for complete b2b segment with paid option because in a country like India B2B segment has a higher prospect of attracting paid users.
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Sulekha has a B2B portal as well which is operational for a long time at sulekhab2b.com. However, they were not able to become as popular as Indiamart or Tradeindia as the focus was more on consumer segment few years ago.
@Raghav Soni.
Why have you classified sulekha as INFAMOUS.
I missed something. I think they are generating good income from lead generation. You can leave your contact info and expect some dealers to get back to you. Is that true.
Well, if people are made to pay – they’d rather pay for Print Ads in newspapers given their strong existing reach in the Indian Market than attempt a paid Sulekha. Again, if releasing Print Ads in newspapers were easy & convenient. Very much the demographic market that we at releaseMyAd.com hope to gain and service soon.
But given the current slowdown, one cant blame Sulekha for trying alternate business models to show revenue. And again, this is just a test. They know they’ll change their decision in a split second the moment they know if its not working
@punit that site has potential just name title is little constraint
@rahul that was a goofup i wanted to say insanely famous…sorry to bring bad reputation there…..
as far as sulekha’s survival is concern i think they can become a lot more hit cos some features like call back are finding more takers as people want to save money by calling the contact details……what they lack is focus cos they have so many verticals opened up that they can’t even point out their underline theme…
just check this out: sulekha
after of many services only top five including classified and yellow pages brings in 92% of traffic….they should note this and discontinue services which are not working well cos people no-a-days want niche poratal …..and
@sharad print ads also has a limitation…
looks like in the age when a portal can sell so many rights they are finding it tough to monetize could learn few things from fella bloggers….
sorry check this link ….. sulekha’s traffic details
Hi….I represent Sulekha and our comments were misinterpreted. Our clarification is as follows:
a. The comment that advertising revenues have dropped 25% and are expected to drop further was made with reference to the general industry trends that we are observing and not pertaining to Sulekha.com specifically.
b. Sulekha.com Classifieds will continue to be free. We are implementing, however, multiple options where users can *choose* to pay either before they post an ad (for additional premium ad features) or after they have fulfilled their need (if they are satisfied with our services). We remain committed to serving the widest range of transactional needs for users across multiple cities for free…while providing ways for them to pay if they choose to. We expect more than 95% of our users to continue using the Free option.
rectification:
I said insanely famous cos in informal language that means incredibly famous…just used a youth lingo…
and I misquoted that their revenue is down cos they were poiting out industry revenue…..but the thing about going paid is not wrong in any sense….cos here is a quote from ET article “We believe we might just have become indispensable enough to our users to operate as a paid service,” said Sulekha president and CEO Satya Prabhakar.
You haven’t mentioned quikr.com and click.in classified sites in the article. Is prachar better than quikr and click.in?
I agree with you that newer websites like Prachaar.in will gain from Sulekha’s stumble. These websites are dedicated classified websites and more user friendly as against Sulekha which is trying its hands on anything and everything.
Sulekha is popular and i have used it and found it useful but they are increasingly becoming very difficult or bad in design.Look at this new site i found, Quikr.com. It was a easy going, simple site yet very fast results. I found my rental in chennai thanks to quikr in quikr time:)
I think sulekha has reduced fees keeping in mind the economic conditions and tough competition they will face from sites like quikr.com