Surging Online Classifieds

Classified ads in the region are rapidly switching from print to online, with beneficial results for all.  

By Khaldoon Tabaza

Anyone who enjoys nothing more than getting their fingers covered in ink while leafing through a classifieds newspaper on a weekend morning will no doubt have noticed how thin these publications have become of late. This is especially true of the autos and real estate segments, as the volume of ads has fallen significantly over the past couple of years.

So where did all these print classifieds go? Just pick up your computer or smart device, do a quick search, or download a regional classifieds app, and you’ll find all you’ve missed and much more.

Between 2000 and 2010, US newspaper classifieds revenue fell from $19.6 billion to less than $6 billion. In fact, most cities in the United States today don’t even have a classifieds print newspaper anymore. Europe has understandably followed suit. A couple of years ago, France’s most iconic classifieds paper, which was the inspiration behind many of the classifieds prints in the Middle East, stopped being printed.

While we have yet to see any leading classifieds newspapers in our region go to the wall, it’s reasonable to expect they’ll start doing so in the very near future.

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A glance at the regional print classifieds industry reveals that business from classifieds listings plateaued two or three years ago. Most titles witnessed a 20 to 30 percent decline in revenues and volume of ads in 2013 and this downward trend appears to be continuing this year.

While this may be bad news for publishers who made a bet on print classifieds, and set a blind eye to the obvious shift to online classifieds, the migration of classified advertising to the Internet has been beneficial for everyone involved. This includes consumers, SMEs, and online classifieds startups and their investors.

The shift drastically improved the experience of consumer-to-consumer and business-to-consumer selling and buying. It also created billions of dollars in value for startup founders and their investors around the world, which made-up—multiple times over—for the lost value in print classifieds. Despite starting mostly with a free offering, online classifieds have proved vastly more successful at monetizing users than print classifieds. They are far more scalable and offer much higher margins.

Roughly half of the Arab world’s 135 million Internet users rarely use a print classifieds newspaper. From a seller or service provider’s perspective, one can get immediate gratification and results by posting ads for free, or paying a small fee, to get premium exposure without having to leave the comfort of their couch or wait for the newspaper print date. For example if you want to sell your car or house, all you’d have to do is pull out your smartphone, take few photos, tick a few boxes, and boom: your advertisement would be online.

From a user’s perspective, spending hours going through print pages and circling ads, setting-up comparison tables, writing down phone numbers, and waiting for next week’s edition for new options is now replaced by a sophisticated search online. This allows you to look for cars by brand, year, body type, fuel type, and price, get in touch by email or phone, and set up alerts in case what a user wants isn’t available now, but could become available in the next minutes or hours. The same great experience applies to real estate, jobs, electronics, services, and every other conceivable market segment.

To understand the seismic nature of the shift that happened in the past few years, approximately 25 percent of Internet users in the region have used online classifieds. This put the total audience of top regional classifieds websites at an estimate of more than 35 million users per month by mid 2014. This includes varying using habits from daily to weekly or more, which far exceeds not only the audience of print classifieds, but that of all print media in the Arab world—be it daily, weekly, or monthly.

On a country basis, a leading classifieds website in Saudi Arabia for example reaches between 250,000 and 400,000 users a day throughout any given week. Compare this to the leading newspaper and leading classifieds weekly in the country, which print no more than half this number on their best days. In terms of depth, classifieds websites usually have tens of thousands of postings per day, compared to a maximum of several hundred posts in the daily print classifieds.

Online classifieds have become so popular in the Arab world that in some countries the leading classifieds website is more popular than Facebook. This is the case for leading Arabic classifieds website OpenSooq.com, which is a leader in its category in several countries including Saudi Arabia, Kuwait, and Jordan. With a simple, easy-to-use website and popular iOS and Android apps, OpenSooq is not only leading in countries that have mature online audiences, but also in countries where the number of Internet users is growing very quickly via smartphones, such as Iraq and Libya.

In expat-dominated countries such as UAE, Qatar, and Oman, English-language generic classifieds website Dubizzle has done well by focusing on business-to-consumer advertising in sectors such as real estate, offering advanced search functionalities, and a more elaborate user interface.

OpenSooq.com and Dubizzle are joined by category leaders who have focused on specific verticals, such as Propertyfinder, which focused on real estate in the UAE, and Haraj, the undisputed leader in automotive classifieds in Saudi Arabia.

Globally, online classifieds is a business that is mostly local or regional, where websites are usually of low value outside their geographical area. The sector is also usually one of the first categories to mature with the emergence of regional leaders. This has been the case indeed in MENA, with the business leaders in online classifieds mostly being home-grown startups that are now valued at tens of millions of dollars. That’s just for starters, as they have tremendous growth potential ahead of them. I’d advise anyone to keep an eye on this exciting and fast moving sector.

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