Aurora Magazine

Promoting excellence in advertising

Classified and online

Published in May-Jun 2012

Why online classified advertising is set for exponential growth.

Pakistan has always been a nation with strong social support systems rather than institutions. Even for things as simple as schooling or buying a house, we seek the opinions and recommendations of our own and extended family and friends networks rather than depend on external reviews or peers.

Over the last few years however, this system has seen a shift especially in the higher income segments. As technology has permeated into our lifestyles, the increased exposure and information flow has resulted in people making judgments based more on the recommendations of strangers and experts. The increasing shift to nuclear families only serves to amplify this trend further. To cater to this sophisticated audience, a growing plethora of classified advertisement sites are springing up in anticipation of this growing market of the future.

Globally a $100 billion business, classified sites are the new medium whereby consumers and businesses, or more aptly, sellers and buyers find each other. Whether they are individuals or businesses looking for a used car (, a new employee (, a place to sell their mobile (, buy a plot for investment or a new home (, or even find a partner (, the first stop is becoming sites such as these. The appeal lies in the convenience these sites provide along with powerful search capabilities, personalised ‘push’ services such as automatic ad alerts, up-to-date listings and features such as photos, video and sound clips in online ads. Best of all, they are free.

In some aspects, the evolution of the online classifieds in Pakistan is unique compared to global trends. Firstly, because Pakistan has seen the rise of vertical sites (specialising in one area such as jobs, real estate and matrimonial, etc.) unlike the US where the biggest classified site still is Craigslist, a horizontal site specialising in multiple categories simultaneously. Secondly, unlike the West, where online classifieds have taken business away from newspapers, online classifieds in Pakistan have contributed to overall growth while print classifieds have also grown substantially. The future, however, is online classifieds, which will ultimately overtake print classifieds through sheer reach, flexibility, cost effectiveness and convenience.

Classified sites are the ideal web 2.0 business for a country like Pakistan, because unlike e-commerce-based business models, such as Amazon or eBay, where the transactions are completed online, users never buy directly from these classified sites. As a result, Pakistan’s limited payment gateways do not restrict the growth of these online businesses. Instead, people use the service to look for best offers and make enquiries, while transactions are conducted in person or over the phone.

Although data regarding the size of the market and revenues is harder to uncover, leading the traffic race is Olx with 2.2 million unique users every month in Pakistan. Local sites such as Pakwheels, which deal mainly with second hand cars, claim 15 million page views a month and 150,000 registered users. Zameen claims over 180,000 unique monthly visitors and 10,000 site listings a month.

According to Nils Hammar, CEO, (one of the pioneers of classified sites in Pakistan), “Pakistan is a huge market. There are roughly 20 million internet users and we believe this number will grow substantially over the next decade. We believe that a free, quality classified site like is a service most internet users in Pakistan will want to use.”

The launch of in November last year is interesting because it is a horizontal site (like Olx or Locanto), and amongst a growing number of foreign horizontal sites investing in this market. Even among local players, the market is shifting from vertical to horizontal category sites. Players who were earlier in one category have launched other verticals or their own horizontal sites; for example Pakwheels has launched and, verticals for general goods and mobile phones.

The trends and factors governing the market for classified ads support their assumptions. There are substantially large numbers of micro and small entrepreneurs who are increasingly looking at advertising options that are free or low cost in order to market their products or services online. Online classifieds provide them with a local as well as a national reach and as mentioned earlier – for free. A site like already claims 50,000 listings in a span of a few months.

Although classifieds online are evolving they need critical mass. Pakistan’s online industry is in the nascent stages and the overall internet population is limited. Although it is said to be about 20 million, five to eight million (estimated) people access the internet just once a week, and out of this only two to three million people are looking for search-based information, which is not critical mass compared to developed markets. Secondly, there is a problem of information hoarding; for example, real estate brokers thrive on their knowledge of who is buying and selling and will not part with this information easily. However, despite these challenges, the number of classified listings and their audiences will increase substantially over the next three to five years for the following reasons:

1 Pakistan is an emerging market with both GDP per capita and online media consumption growing at a good pace. Higher salaries and disposable incomes (due to both partners working) and more choices have ensured that users change their laptops, PCs and cars faster than before, while 50% of mobile phones are changed within six months of purchase. These trends are resulting in a spurt in online listings. People are selling everything – from washing machines to laptops and air conditioners. Currently a household in Pakistan that wants to sell such products has limited options offline; hence, online classifieds sites are providing these solutions.

2 Sellers are not online, while buyers are all over the internet. How many apartment owners are willing to place their rental ads on a website; in fact how many potential landlords are internet savvy in the first place? Yet, as awareness about online classifieds increases, this will change and more people will join the marketplace. Online classifieds currently stand to become the trade portals of all C2C transactions in Pakistan and fill the huge gap between buyer knowledge and the sellers disadvantage.

Internet penetration in Pakistan has been constrained because of broadband and PC penetration whereas mobile penetration has been explosive. People are beginning to realise the ease with which they can access the internet through their mobiles and in many cases some are having their first exposure of the internet through their mobile handset. Online classifieds on mobile are gaining traction and with rapidly growing mobile internet users, it could constitute the largest chunk of the classified market soon.

“A great mobile service is a must as internet usage goes mainstream. We have a mobile site today on that is being used by all kind of mobile devices. As the market grows we will add more options. We believe in the Pakistani internet market and want to be a part of the progress as the market grows. So far, the response we have had from our users has been great, and I believe will bring value to the Pakistani market,” says Hammar.

One thing is for sure, no matter how the classifieds market will develop in the future, more internet users means that better services will be developed, and better services will, in turn, attract more internet users. Hopefully we are at the beginning of a positive spiral where it will be hard to imagine, five years from now, a better way to sell our cars, buy our houses or even find our life partners.

Umair Mohsin is Director Digital Media, Media Idee.