Exclusive: OLX kicks off offline ops with three franchise stores in Gurugram

After seven years of operations, Naspers-owned classified major OLX has felt a strong urge of exploring offline segment in used car vertical. The company has opened three stores in Gurugram in sector 14, 17 and Golf Course Extension Road.

Entrackr has visited one such store in the millennium city (see below pic).

“OLX has been trying to execute Mahindra First Choice and CarNation sort of models with its offline move in the used car vertical. Essentially, it’s opting a franchise model where it would offer branding and open up supply and demand funnels to franchise owners,” says one of the sources on condition of anonymity.

Exploring offline touchpoints looks like a logical move for the classifieds company as the used car is a high ticket size purchase and involves strong offline factors. “Franchise owners have deposited fixed fee that covers over 80 per cent of infra cost for running stores. It would be an asset-light model,” adds one of the sources.

OLX Franchise store in Golf Course Extension Road, Gurugram

The sources also mention that OLX is sharing about 35 per cent revenue with franchise owners. Entrackr couldn’t identify this figure independently.

While offline touchpoints have been integrated by several early-stage startups including Cars24, Spinny, and Carbiqi amongst others, going offline by large horizontal classifieds companies isn’t a popular trend. OLX seems to eye an upper hand over Quikr in the used car segment.

With 58 per cent and 31 per cent surge in revenue and profit, it had posted revenue of Rs 92.5 crore along with Rs 8 crore profit in FY17. Importantly, a large amount of growth during the fiscal was steered by OLX mobile app. It claimed a growth of 70 per cent amongst sellers on the platform with about 40-45 per cent transactions executed via the app.

At present, the company lists over 250,000 cars and dominate about 60-70 per cent of the business for car dealers in India. Recently, it claimed to facilitate about 3 million transactions in the calendar year 2017 with an overall growth of 25 per cent in transactions.