The Indian digital classifieds industry is projected to grow three times to $1.2 billion by 2020, a new report by Google and KPMG projects.
Highlighting the growth opportunity, Google and KPMG on Wednesday released the ‘Digital Classifieds in India 2020’ report, which says the next phase of growth of such ads will be driven by the rapid growth of e-services, real estate and automobiles.
However, horizontal classifieds will still continue to lead with about 30% market share of total digital classifieds in 2020. Google search trends reveal that local searches across these categories have grown fourfold in the last four years, led by non-metros such as Pune, Ahmedabad, Chandigarh, Kochi, Coimbatore, Indore and Jaipur.
Real estate and e-services are expected to increase by 4x and 7x, respectively, by 2020. Within the e-services classifieds vertical, dining, auto rentals, relocation services and home services like beauty services, repair, tutoring, personal trainers are the most popular. The online jobs search market is set to double by 2020 with 63% consumers accessing e-classifieds. Bengaluru, Mumbai, NCR and Hyderabad are the top ranked cities for online job searches and with ‘Sarkari Naukri’ (government job) as one of the top searched Indic terms.
The report further highlights that the digitally savvy consumer is happy to pay for value-added services. For instance, 59% of used goods buyers are willing to pay for quality verification of goods or home delivery; 43% of job portal users are willing to pay for auto application for jobs and 40% of consumers searching for real estate are ready to invest more for legal verification and property check.
“The ecosystem is ripe for the emergence of digital classifieds. Spurred by the smartphone penetration, online users are expected to grow to a whopping 650 million by 2020; and with every second consumer willing to pay for value added services, the digital classified segment is expected to touch $1.2 billion by 2020,” said Nitin Bawankule, Industry Director, Google India.
Talking about the challenges and growth opportunities for the industry Sreedhar Prasad, partner (e-commerce and start-ups), KPMG India, said: “As the digital classified segment undergoes a rapid transformation it is facing a few challenges like unverified listings and low customer loyalty. However, it is expected that there will be convergence of online businesses since the end customer is the same, thus a high possibility of e-Tailing, EServices and Digital classifieds coming together as a strong one stop value proposition in the coming years. This would further enhance revenue streams, monetizing possibilities and reduce overall cost of customer acquisition.”
