The "go-for-broke" mentality in the e-commerce space doesn't seem to be stopping anytime soon in India. After eBay led a round of investors in placing $134 million in e-commerce biggie Snapdeal recently, the latest player to post gaudy numbers is Quikr, one of India's leading internet classifieds companies.
According to the Economic Times, Pranay Chulet, the co-founder and chief executive officer of Quikr, who has two pedigree degrees from IIT Delhi and IIM Calcutta, managed to convince Sweden's Kinnevik to lead an investment worth $90 million into his company in another round of funding, apparently taking the total amount invested in his company to $150 million and the valuation of Quikr to $250 million.
Kinnevik is a previously enthusiastic funder of Germany's Rocket Internet, which has two ventures up and running in India — FoodPanda, the food ordering site, and Jabong, the fashion e-tailer. (Quikr has been previously backed by investors like Warburg Pincus, Matrix Partners India, Norwest Venture Partners, and eBay.)
However, e-commerce in India is way behind countries like China by a factor of 25 (in terms of annual revenues), and many observers of the space here are sceptical about the sums being invested and the valuations being cited. Still, investors hope that once they aggressively back the winning horse and the market inevitably grows, they will undoubtedly be sitting pretty.
That scenario will dawn circa 2016, according to this article, when the Indian market for classifieds will hit $500 million. According to CEO Chulet, Quikr gets 32 million unique visitors every month, has a presence in close to 1,000 cities, and lists stuff across 50 segments such as cars and household goods and even services such as jobs and education. Apparently, its estimated revenue, primarily from premium listings, ads, and leads, comes to $50 million, although it's not clear whether that is an annual figure or a quarterly one, or whether it denotes the total value of goods sold or net revenue.
You wouldn't have imagined Indians — who are more enamored of new things, especially during blockbuster festival gift-buying seasons like Diwali and Holi — to be excited about second-hand stuff. But Quikr and its investors are betting that they will be. Certainly, businessmen like the furniture seller one in the Outlook Business article are gaming the system by buying fundamentally sound, run-down furniture, gussying it up, and flogging it as new. No doubt, others are doing similar things.
Duelling for the wallets of thrifty Indians who are sniffing out deals online will not be a total cakewalk for Quikr. It will have to battle OLX India (an offshoot of the Argentinean site), which claims to be the largest classifieds site in India, having apparently reached 500 million page views by mid-2013.