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.Â