Secondhand Marketplace OLX Hopes to Earn a Profit After 10 Years Online
Jakarta. OLX, an Indonesian online marketplace that focuses on specialized goods, is hoping to finally book some profit by the end of 2016 – after 10 years of operation – by monetizing on the user base it has accumulated through paid advertising features.
The online site, formerly known as Tokobagus, merged with its top competitor Berniaga in 2014, shortly after changing its name to OLX.
The OLX brand was first established in Buenos Aires, Argentina, before moving its headquarters to New York in the United States. It now has established a presence in more than 40 countries, including India, Poland and Brazil.
"We're very lucky that we've reached a different level after the merger. We don't need to anxiously look left and right for competitors anymore," Daniel Tumiwa, chief executive officer of OLX, said during the site's 10-year anniversary celebration in Jakarta on Tuesday (26/1).
"We're now solely focused on business and how to make the business profitable," Daniel said, adding that the company is confident to "be the first e-commerce company that makes a profit in Indonesia."
Tech startups, such as OLX, tend to make almost zero profit in the beginning stages of development, burning through their cash to bulk up a user base before implementing a strategy to monetize their products or services.
OLX currently boasts more than three billion visitors per month — a seven-fold increase over the past two years — browsing through four million listings. It also claims to facilitate an average of more than 1.4 million transactions worth up to Rp 16 trillion ($115 million) every month as of December last year, without taking any fees to towards its income.
Electronic devices and gadgets lead the number of transactions, followed by motorcycles and cars. In terms of value, car sales dominated at Rp 10.6 trillion, with sales of property and two-wheelers coming in second and third at Rp 3 trillion and Rp 1.2 trillion respectively.
In a strategy to monetize its traffic, the Jakarta-based start-up recently added two new advertising features for sellers, sundul (to head something) and top listing, offering a total of four paid feature that promise sellers more prominent location for their listings.
Sundul allow sellers to bump up its listing when prospective buyers are searching for an item within one click at a starting fee of Rp 5,000. Meanwhile, the top listing feature will place the seller's listing at the top of the search list for a total of seven days at a starting fee of Rp 25,000.
"We're at an important phase where we now can start charging our services with the new features. This also means that after ten years of no earnings, we will start paying taxes, " he added.
Aside from making money from paid features, the online marketplace will be spinning off its property listings and launch a separate page for property within the next two months, Daniel said, touting it to be "among our biggest plans going ahead" while declining to disclose more details on the plan until the site's launch date.
OLX is also aiming to attract more people to become sellers at OLX by holding a community-based garage sale with sellers that are already registered in the online marketplace, called PasarOLX, he added.
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