E-services, real estate, and automobiles will be the key growth areas in the digital classifieds industry, according to a joint report by Google and KPMG, released on Wednesday.
The report 'Digital Classified in India 2020' projects that the online classifieds industry will grow three-times (3x) to become $1.2 billion strong by 2020, and that horizontal classifieds will have a 30% market share.
The growth will be fueled by tier II cities such as Pune, Ahmedabad, Chandigarh, Kochi, Coimbatore, Indore and Jaipur.
"Spurred by the smartphone penetration, online users are expected to grow to a whopping 650 million by 2020; and with every second consumer willing to pay for value added services, the digital classified segment is expected to touch $1.2 billion by 2020," said Nitin Bawankule, industry director at Google India.
The e-services and real estate segment are expected to grow by four times (4x) and seven times (7x) respectively. E-services will include vertical dining, auto rentals, relocation services and home services like beauty services, repair, tutoring, personal trainers, and others.
"It is expected that there will be convergence of online businesses since the end customer is the same, thus a high possibility of e-Tailing, e-services and digital classifieds coming together as a strong one stop value proposition in the coming years. This would further enhance revenue streams, monetising possibilities and reduce overall cost of customer acquisition," said Sreedhar Prasad, partner â€“ e-commerce and startups, KPMG India.
The report suggests that 59% of used goods buyers are willing to pay for quality verification of goods or home delivery; 43% of job portal users are willing to pay for auto application for jobs and 40% of consumers searching for real estate are ready to invest more for legal verification and property check.
Verification of goods such as second-hand gadgets is currently provided by startups such as OverCart and Cashify, while PropTiger provides legal services regarding properties.
The online classifieds segment is dominated by listed firm Just Dial, and startups such as Quikr and OLX.
Besides these horizontal players, startups in vertical segments include Google Capital-backed CarDekho, Info Edge's Naukri for job listings, and others. Companies in the digital real estate sector include 99acres, Magicbricks, and Housing.
Newscorp, which is the owner of VCCircle Network, has a stake in PropTiger.
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