Marketing Strategy of OLX analyzes the brand with the marketing mix framework which covers the 4Ps (Product, Price, Place, Promotion). These business strategies, based on OLX marketing mix, help the brand succeed in the market. Let us start the OLX Marketing Strategy & Mix to understand its product, pricing, advertising & distribution strategies:
The product strategy and mix in OLX marketing strategy can be explained as follows:
OLX is a leading online platform which is used a classified advertisement website for buying-selling of pre-owned goods. OLX provides a horizontal online classifieds platform as its marketing mix product offering for sellers and buyers to interact with one another and do business. OLX is different from an online marketplace like Flipkart or Amazon as it follows only C2C model. On this website only the end consumer can sell used products or rent out accommodations to another end consumer. OLX mostly have individuals listing their items on the website. So, in essence, they have two kinds of customers- the sellers and the buyers and they have to attract both of them to increase its business and revenues. For the classified ads, it provides the service of featured ads and free ads.
Featured ads have two offerings- 7-day featured ads and 30-day featured ads. Apart from the service of online classifieds, there are various product categories which can be sold and bought on OLX - Cars, Real Estate, Mobiles, Electronics & Appliances, Jobs, Bikes, Furniture, Books, Sports & Hobbies, Fashion, Pets, Services. The most revenue generating category for OLX is used mobile phones and they are the biggest marketplace for this category in the country. The next best categories are used cars and bikes respectively in which about 80 to 90% listings are from individuals. Other important categories are- electronics, furniture and other household categories.
Image: company website
OLX Price/Pricing Strategy:
Below is the pricing strategy in OLX marketing strategy:
OLX follows a free-mium model for its classifieds ads service. Majority of the people don’t pay for listings, but those who want their ads to be highlighted and listed at the top in search results need to pay minimal charges for their listings to OLX.
Hence, the pricing in its marketing mix is based on usage of premium services. Featured ads have 10 times more replies than free ads. Ads for different product categories attract different prices in different regions. Taking a typical example, a featured ad for 30 days for cars is priced at Rs.1599, while for real estate it is priced at Rs.999. Electronic and appliances, bikes, furniture, fashion, pet, books sports and hobbies are all charged at Rs.499 for 30 day featured ad. For Jobs and Services on the other hand, OLX charges Rs.799 for the seller to place it as a featured ad. But its best category, used mobile phones is priced at just Rs.239 for a 30-day featured ad. 7-day featured ads are priced significantly lower than the 30-day ads. The ads are also available in packages: Lite saver with a pack of 3 Ads, Pro-Saver with 6 Ads, and Super Saver with 10 Ads. Another source of revenue for OLX is the advertisements placed by Google AdSense and other companies.
Following is the distribution strategy in the OLX marketing mix:
OLX is present on both website and as a mobile app on mobile platform. All of the products are available on both platforms, but they focus more on the mobile apps as more than 62% of the traffic comes from apps. OLX is present in 45 countries across the world and is the number one shopping app in 22 of them. Its major markets include India, Brazil, Pakistan, Poland, Portugal and Ukraine. It has 25 offices worldwide. In India, it is the market leader in C2C online trade industry with 80% market share. The country is a difficult market for OLX because they try to focus on almost 1,000 cities and reach every customer. Roughly, almost 30% of Indian population lives in tier I cities and 70% live in tier II or below.
The company focuses only on the tier-I 30% as it is more aggressive on the internet and provides more than 50% of their business.
OLX Promotion & Advertising Strategy:
The promotional and advertising strategy in the OLX marketing strategy is as follows:
OLX has the strategy of gaining first movers advantage in most of the developing countries as the reselling business is not well established like in the western countries. Therefore, more often than not, OLX has to create a market and not acquire it from existing players. Therefore, their promotional campaigns focus on Generic-problem recognition and brand communications reflect this strategy. Since the culture of buying online is already taking root in India thanks to a boom of ecommerce websites, but convincing people to sell their used/new products online is a bit of a challenge. Keeping this in view, all of the promotional campaigns of OLX are targeted at sellers. Over the past few years, many interesting campaigns were launched by OLX, but the catchiest of them all was “OLX pe bech de” (Sell on OLX). Other famous campaigns by the company are- “Ghar bethe Kamao” (Earn sitting at home), “OLX kr do” (Do OLX) and “OLX it”. They collaborated with NDTV and came out with a puppet show ‘Bechshala’ in educating people about how to place an ad on its website. Apart from TV, the company is also actively pursuing online and social media promotions for OLX.
Since this is a service marketing brand, here are the other three Ps to make it the 7Ps marketing mix of OLX.
OLX has more than ~2 billion visits per month and get approximately 50+ million monthly listings. Although it is a low contact service provider and customers engage directly with the company only in case of grievances via customer support, majority of its primary functions like website and app support etc need highly skilled technical resources to manage such growing traffic. OLX hires staff from various fields including management employees, engineers and analysts. The company has a workforce of about 4,000 people and they operate from more than 25 offices across different continents. The mission of the employees of OLX is to “enhance people's lives by facilitating win-win exchanges”. The company has an entrepreneurial culture with more focus on learning and curiosity of the employees. Being open to new things, curious and fast to learn are the major traits of OLX’s workforce. They also emphasize on knowledge sharing and working as a team.
OLX has a rating of 4.3/5 on the Play store and 4.4/5 on Apple AppStore. It is the number one shopping website in 22 countries across the world. In India, it the largest marketplace for pre-owned cars and motorbikes, mobile phones and household goods. OLX’s brand awareness is 5 times the brand awareness of its competitors in online C2C buying and selling marketplace. Apart from that, the company has won numerous industry awards and achievements like recognition by Superbrands in 2016, two Effie Awards in 2015 and three Effie Awards in 2016 for its marketing campaigns. OLX also helps keep the planet green as it has been proved that OLX India transactions have saved 3+ million tons of greenhouse gas emissions in the year 2015-16.
OLX has several business processes in place. The process of buying from OLX is very simple. Buyers can search products on the website or app based on categories and other preferences like place, price range, relevance etc by simple clicks. In the event the buyer is interested in a product, he/she can connect with the seller in two ways- either by clicking on “Make an Offer” and entering the price he/she is willing to pay, or through chat with the seller option. The buyers can also share their phone number to contact the seller outside the app or website. For selling, the user has to click on “Submit a Free Ad” button, enter product details, Ad title and photographs of the product. Once the ad is posted, the seller receives a message which contains a link for “pay and sell faster” option. The seller can click on that to make payment and convert the ad into a featured ad. The transportation and logistical support is also provided by the company. Hence, this gives an insight in the marketing mix of OLX.
On Line eXchange, or OLX as it is known, was founded in 2006 by Fabrice Grinda and Alec Oxenford in Buenos Aires, Argentina and New York, USA. OLX is an online classifieds ads service provider for re-used or pre-owned goods. It connects local people and allows them to buy, sell or exchange pre-owned goods and services. The company provides a platform where sellers can post a listing for their item through the OLX mobile app or on the website and buyers can make an offer for the products they are interested in. OLX was acquired by Naspers, a South African media group in 2010, with the latter acquiring 95% stake in the company.
Today, OLX is the world's leading classifieds platform and it mainly focuses on emerging markets outside of America like India, Brazil and Philippines. Its major competitors include eBay, Quickr and Click.in.
This article has been researched & authored by the Content & Research Team. It has been reviewed & published by the MBA Skool Team. The content on MBA Skool has been created for educational & academic purpose only.
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