The online classifieds market is a dynamic sector in a state of constant evolution which currently faces interesting challenges for the future such as the incorporation of big data and the rise of new players (often start-ups with disruptive business models, the agility to move quickly and with little capital, attract big investments and make ground on the big players). How is the business model changing? Is the industry facing this future with a confident outlook? The Online Classifieds Industry Report by Mitula Group in collaboration with Global Online Classifieds aims to take the pulse of the industry and provide answers to these and other questions while trying to sketch out the landscape of the classifieds industry.
The survey results suggest a general feeling of positivity in the industry with regards to the future. 84% of participants (the majority being CEOs and founders of online classifieds companies) responded either positively or very positively when considering the next few years for the market. It is however important to point out that companies that do not plan to work with transactional products were 8% less optimistic as a whole.
84% of participants responded either positively or very positively when considering the next few years
This isn’t such a surprise if we take into account the words of Javier Ortiz (Chief Business Development Officer at Mitula Group). “Industry leaders have shown that the business model in classifieds is moving towards transactional revenues.”
As such, survey participants revealed that revenues from transactional services currently represent on average 15% of their companies’ totals but that in the future they see that percentage being as much as 50%.
Following the same trend, currently only 12.9% of those surveyed by Mitula Group consider the transaction to be the focus of their business model at the moment. That said, 35% said that they expect a change to occur in the next 3-5 years and that their business model will eventually change to one focused on the transaction.
It could be argued that this changing model is reflected in the fact that 8.6% of participants consider CPC to be their most relevant revenue stream but only 0.9% believe that in 3-5 years this will still be the case.
New players and competitors
Despite the climate of optimism in the industry there are still things in the sector that worried participants. One of these is the appearance of new players in the market with disruptive business models (44.8%) which were more worrying than either new companies with the same business model (11.2%) or potential mergers of big players (17.2%).
Despite the climate of optimism in the industry there are still things in the sector that worried participants
82% of the companies that consider their business model to be disruptive are less than 5 years old, which is why Ortiz is convinced that “The disruption is more likely to come from new companies than from the older ones.”
As well as movements from those within the industry, moves from companies outside the industry like social networks and traditional online giants also concerned many participants, with Google (21.6%) and Facebook (35.3%) identified as possible future competitors.
The thing that most of the participants considered most important for the future of the online classifieds industry however was big data. So much so that 44.8% of those surveyed flagged it as the most important industry consideration for the next few years.
Future plans of the industry
The Online Classifieds Industry Report also took into account the future plans of companies in the market, with 56.9% confirming that they plan to launch new products or services soon and 58.6% planning to hire new staff in the next year.
Furthermore, 38% of those surveyed plan to modify their business model in the next 3-5 years.
These results show the dynamism and the overall rude health of an industry, which according to the survey results, finds itself immersed in a process of change and fronting up to a future full of opportunities with optimism.
The participants in the Online Classifieds Industry Report will shortly have first access to the detailed report with the survey results and the accompanying analysis. The predicted impact of the projected industry changes is another topic discussed in the report.