Sulekha, the popular free classified portal will soon become a paid services for its customers. Earlier it used to be supported by the corporate advertisements. But there was a decline of 25% ad spend by them. It is expected to go down another 25% by the year end.
21000 crore Indian advertising industry will not grow at a double-digit rate like it did last year. It is estimated to be growing at 9%. Good growth but it is half of what it was last year. 
I thought online advertising would be something, which will help the business in cutting down their marketing expense. But Sulekha has a different opinion.
Online ads are the first to go, as they have neither the permanence of print nor the visibility of broadcast.
Sulekha kept their options open and might fall back to the free mode if it doesn’t work out. I like that openness. But, the paid service is bound to push people away. It is really difficult to change the free mindset. Ever since Napster revolutionized the music sharing, it planted a free music mindset. Most tech savvy people think music/mp3’s should be free. Entertainment industry is struggling hard to change this mindset. Same thing applies for classifieds too. Sulekha is betting on the market presence and first mover advantage.
So, we have a significant market presence, and believe our users would much rather pay to use our service than wait for the same kind of buy and sell database to be built up by another site.
May be it is stigma or something else but I am reluctant to use a paid site. I wanted to sell my Swift car and checked for any free classifieds online.I found some and there was one site which said 750 rupees for 90 days. The car will be sold or the money will be returned. Sounded promising but I did not go through it. Instead I chose some alternative channels with no luck.
For a car, if it weren’t for my frugal soul I would have posted the ad for 750 rupees. But, the same cannot be said for consumer durables, which make up the most part. Typically the cost of the product will not justify the cost of the service. (source)
Would the paid mode fly for Sulekha?
PS : It was really hard for me to type in Sulekha because of all the echo of Subhiksha. They really rhyme don’t they?
Update: We recd. an update from Sulekha that their classifieds section will always remain free for users. However, given the traction for their classifieds section, they feel it will become a indispensable tool for users and given the value addition they are doing, users may not mind paying Rs. 300-400 in future. Also, it has been wrongly quoted that their Ad revenues have fallen by 25% – it was a comment with regards to generic Industry-wide ad spend and not specifically with Sulekha. We will be publishing an interview with Mr. Satya Prabhakar (CEO, Sulekha) shortly to get his views on this.ÂÂ
@Jamila : Great news for all Sulekha fans.
@ankit & himanshu: Sulekha classifieds continues to remain free. It is only an optional service fee we collect if you are happy with the service.
Hi….I represent Sulekha.com 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.
Lol…Readers are always welcome.And yes relevant content spamming is allowed:-)
@Arun @Sriram Sorry for doing my blog evangelism here.please delete the comments if you wish..It wasn completely intended though
Heading to your blog. Welcome me. But promise you will not mind my spam. D
Hell I am ready to discuss at my blog 24/7;-)
but it takes time and effort for the blog owner to establish.And hats off to trak.in for the same.
Completely agree with Ankit. If discussion take place people are tempted to come back.
@Sriram :-) Glad that you felt it that way.Infact,come to think of it,i always like commenting where comments actually lead to even better discussions then t post itslef.
Kudos to trak.in team.
Wish I had these kinda discussions going on at my blog too.guess,there is a long way to go for me!!
@Sharad : I agree with you about Sulekha trying out a business model. They have their reasons as there was a 25% drop in revenues already. Sulekha has also kept its options open of going back to the free mode.
@Ankit : You have actually completed my post. I forgot about usa.net. That was my first email address. That was in 1999.
Come to think of it, its been 10 years on the net for me. Nice.
Thts what we call being Indian from the core.As @himanshu mentioned the free stuff is what rules when it comes to Indian Mentality or rather even if we consider an overall scenario, something which is free at first and becomes paid overnight, there will be a knee jerk reaction at the start.however, if there is really a value added incentive attached with the paid service,it might hit a happy note with the customer.
‘The move from quantity to quality is always painful to begin with’
Infact,reminds me of a case long back, where there was a site by the name USA.NET for emails and stuff.Waas used by many, and then when it became paid,all hell broke lose initially.
Dont know about others but i did nt even bother to find out what was being offered.
When u get something for free,why pay for it:-)
Well, if people are made to pay – they’d rather pay for Print Ads in newspapers given their strong existing reach 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.
It is there in our Indian mindset that once we are used to FREE STUFF , we would never go for PAID ONE.Sulekha is THE only place for guys who think of staying on rent.
Right now there would be many guys(including myself) who have really made people to search on Sulekha but now Evangelists like me would slowly reduce in number, time would tell how their paid service goes.
-Himanshu Sheth