How Does OLX Make Money | OLX Business Model

Pratyusha Srivastava Pratyusha Srivastava
Feb 8, 2022 6 min read
How Does OLX Make Money | OLX Business Model

Why give away your used items for free, when you can sell them at reasonable prices. YES, you heard right! And, that’s why OLX was founded in 2006. The idea of OLX was highly praised by the people and since the past few years, people have been nailing it.

Did you ever imagine that you could sell your clothes that you don’t need anymore, online? Well, yeah OLX has made things happen. From clothes to cosmetics, you can sell anything you want on this platform.

And for this purpose, dozens of online markets have also made selling very handy. There are over millions of online markets in the world, all beating to make their visibility higher on search engines. It wouldn’t be surprising if I mention these marketing platforms are all very popular and never lack in their services to people. Among these, one of the top online markets is OLX.

OLX is the most exclusive online platform that offers the facility to its customers to sell anything at a reasonable price digitally. When it comes to second-hand purchasing, people become quite conscious and do not want to waste their precious money on non-worthy items. And that's when OLX swipes in! It offers the service to comfortably interact with the owner and get all the required details about the item.

It’s a popular company founded by Alec Oxenford and Fabrice Grinde in 2006. In this article, we have discussed the exclusive business model of OLX and some fascinating facts about that. Without wasting any second, let’s get started!

What is OLX?
Where does OLX operate?
Key Services of OLX
Target Audience of OLX
Business Model of OLX
What's unique about OLX Business Model?
How Does OLX Make Money?

What is OLX?

OLX is an online marketplace that was founded in 2006 by Alex Oxenford, Fabrice Grinda, and Jordi Castello. They founded the company in order to provide a platform that could help people to sell their used unwanted items at reasonable prices.

They noticed that companies like eBay and Craigslist do not hold any presence in the emerging markets. And that's when the founders decided to establish OLX to catch consumers around the emerging market. It is an example of an e-commerce business model. Its website acts as a platform for selling and buying goods and services. The team of OLX is known for its remarkable performances and high-quality services to its customers.

OLX is a very prominent company that holds distinct aspects of social integration with Twitter and Facebook and access to pictures and videos. OLX has received massive success across the global emerging markets and this surely profits the company with high interest from the various investors. The company has raised around $28 million in its fifth funding round. The operating revenue of OLX was β‚Ή206 crores in 2020 and β‚Ή228 crores in 2021.


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Where does OLX operate?

OLX has expanded its business massively. It now operates in more than 40 countries across the world. It also acquires the market around the Asia Pacific, Eastern Europe, Latin America, and Africa.

OLX has over 200 million users every month which generates around 1.7 billion visits and 35 billion page views.

Key Services of OLX

OLX offers various distinct services based on its customer's preferences. It allows them to buy or sell anything. The range of categories includes furniture, electronics, automobiles, fashion and cosmetics, and many more.

OLX has a total revenue of $2.1 billion and its website has over 35 billion page views. Around 8.5 million transactions happen every month.

Target Audience of OLX

OLX has launched its new target campaign where it targets the main media agencies and shows that OLX is groomed to sell new products. It targets brands through media agencies. The campaign media plans have been regarding the view of different categories of clients handled by prior agencies.

The company intends to create a huge mind recall for their emerging business which targets the media planners and reaches potential clients.

Business Model of OLX

The business model of Β OLX is based on the consumer-to-consumer model. The company was based on the ideology of Craigslist. However, the revenue model of Β OLX is quite different from Craigslist's. The users can upload photos of the item they want to sell along with the verified details and contact details of the seller, similar to advertising any item.

Through the website, the interested buyers could contact the seller without the interference of any third party. The buyers get more alternatives from other sellers also. And, they can choose the most appropriate item based on the cost and quality.

Second-hand purchasing often limits the number of options for the buyers. But, OLX provides plenty of options for the buyers to select the best according to their preferences.

What is unique about OLX Business Model?

The most significant thing about OLX Business Model is that it is basically a scale-dependent model. The company puts a great sum of money into promoting and acquiring more traffic and large frequency towards its official website, and also a good number of listings.

The more and more traffic the website would receive, the more the company earns in revenue. This is done by monetizing the total number of searches and clicks.

How Does OLX Make Money?

OLX has various sources of money that surely brings down multiple profitable deals. The business model of OLX is shaped in such a manner that it generates its revenue from the development and operations of the internet and smartphone assessed advertisement platform.

The company formulates its revenue from:

Google Adsense

OLX displays Google ads on the website based on users searches.

Premium Listings

OLX promotes the listing of the product by paying a little fee or on other hand, businesses can have their listing by paying and getting on the top of searches.

OLX Premium Listings
OLX Premium Listings

The business model of OLX is not a publicly listed commodity and therefore, it is not accountable for mentioning its financial results on its websites.


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Conclusion

OLX has been very well received by the market and surely it has built a strong position for itself along with a high user base. OLX is a classified portal and it managed to keep its functionality special and distinct.

The business model of OLX is very strong and people always seem to be curious about how it makes money? Well, it does have some very great strategic revenue sources. OLX has a well-established business in Poland, Brazil and India. The company is improving its techniques to gather more strong holdings across the world.

FAQ

When was OLX founded?

OLX was founded in 2006 by Fabrice Grinda and Alec Oxenford.

Who are the founders of OLX

OLX Group is an online marketplace company headquartered in Amsterdam, Netherlands. It was founded in 2006 by Fabrice Grinda and Alec Oxenford.

Is OLX profitable?

OLX saw a dip of 1% in its profits from Rs 22.9 crore in FY20 to Rs 22.65 crore in FY21.

Who are the competitors of OLX?

Quikr, Clickindia, Sulekha, Zameen, Adsnity, MercadoLibre, Vivastreet, Snapdeal, Clickooz, Get It are some of the top competitors and alternatives of OLX.

How does Olx make money?

A major part of OLX's revenue comes from Google Ads Monetization and premium listings.

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