“Khao kasam,” says OLX to its sellers before finalising a deal 

The only thing getting worse than the country’s economic crisis is its trust issues. And no, these are not just the trust issues foreign lenders are having with our policy leaders, it’s the trust issues Olx has with its buyers and sellers. 

That’s right, an app built entirely to bridge communication, trust and convenience between buyers and sellers of various items is falling short to build trust with its users. If you open the app and list a product, say a mobile, at a sale price of Rs 20,000 you will see an undertaking with a Quranic verse making you promise that whatever you sell, you will deposit 1% of the sale proceeds to OLX. Here’s what it is:

It is not unusual for Pakistanis to see top officials resorting to divine help instead of taking responsibility for the mess. But for a global tech app like OLX, such tactics bring quite a bit of shock, and even dismay. 

The undertaking requirement comes only on the free ad, not on premium ones. Signing the declaration is not necessary, since ads are posted first and then the pop-up shows up but it does indicate the sorry state of tech companies which are consistently finding it hard to collect revenue. 

How does Olx earn money? 

The business model of OLX is ‘scale-dependent’. The website acts as a classifieds portal where customers can buy and sell goods. OLX spends massive amounts of money to garner more and more user traffic and greater frequency and several listings. The high traffic is put to use to earn revenue by monetizing the number of clicks and searches.

Ad networks

Unlike other online marketplaces where the website acts as an affiliate to sellers’ products, OLX has a different ball game altogether. The primary source of revenue for OLX is through traffic monetisation by selling ad space using direct sales, as well as networks like Google Adsense Monetization, Google Custom Search Engine, Sponsored Links, and Sponsored Listings.

OLX attracts high user traffic through online and TV advertisements. It monetizes the high inflow, doing this based on CPC (Cost Per Click), Cost per 1000 Impressions (CPM), and Cost Per View (CPV) for video ads on its homepage as well as on individual product pages till the seller is finally contacted and the transaction takes place.

Google Custom Search Engine

The OLX page has a search bar for customers to look up products. When they perform any search, the results obtained are an optimization with the Google custom search engine monetization of Adsense, wherein the first two-three results are from Google.

Featured (premium) Listings

As explained above, if a seller, for example, has posted a classifieds listing of a television he wishes to sell. After some time, the product is bound to go further below more recent listings, and appear on the second or third page – a place where the probability of buyers clicking on the link reduces exponentially.

To make it still appear on the top, the seller can pay OLX to ‘feature’ his listing on the top of the site. This acts like a ‘pinned’ post that stays on the top for some time. This featured listing is a source of profit for both the seller as well as OLX.

OLX gains no commission from the sale of classified, or free ads. However, in times of financial crunch, the company has moved on to a purely Pakistani method for using emotions and religion.