People go online to consume content, be it an advertisement, picture or basic text. It’s always the content that attracts people. Without content no portal can exist. The main agenda of every advertisement is customer acquisition. Every now and then we need to post advertisements- be it for selling, for buying or for discovering. That’s when the online classified industry comes into play, where listing advertisements is absolutely free and effective if used with an attracting content.
Fxchng is a User to User platform like OLX and Quikr. But what makes Fxchng so different? Here, a user can connect to his social media account and he’ll be shown mutual friends with the buyer. An audience is always hesitant to buy something that has already been used by someone else and that too online. This factor creates a sense of trust and safety for the user.
“Fxchng is a social classified platform which connects buyers and sellers through their mutual connection(s). Basically, people get to know what their friends/family are buying or selling and if they’re looking to buy or sell, they can get help from their peers,” said the Founder of Fxchng, Rauf Saiyed.
Founded in May 2015, the platform wants to establish itself as the eBay of India. While eBay also aggregates B2C, Rauf stated that the company will stay in the U2U section. The startup is based out of Vadodara (India).
This is Rauf’s third venture after Epsilogic Technologies and Cazbak India (A cashback shopping website). Previosuly he worked with Dialogic Research Inc (A part of Intel) as a SE for 2 years. He pursued his Masters in Computer Science from RIT (Rochester Institute of Technology), NY. The team of Fxchng consists of seven people at present.
The Verification Clause
So how does a seven member team verify every ad they get? Upon being enquired about this, Rauf told us that users are free to post any ads. The company then verifies them, and if the information is wrong/misleading, the ads are deleted from the portal.
Most of the real estate ads on the website are without images, even some products are without images. A few are less than a month old and hardly carry any information. Rauf stated that the ads are verified when the user reports them.
“We are concentrating on tier 2 cities, even if we look at the numbers there is a lot of market share untapped. So, there’s enough space for us to get a fair share of the market,” maintained Rauf.
Traction and Monetisation
The company claims to have around 12,000 downloads to its app (iOS/Andriod), with 7,000 users regularly posting ads. Rauf also told us that 20-25 ads are posted every day. Currently, the platform is free but the company is planning to launch some kind of premium feature where the ads with the premium tag will be highlighted and given more visibility. “People will be charged Rs. 100-300, depending on the category they opt for.”
Funding and Market
The company is currently being bootstrapped, but it is in talks with a few angel investors. Fxchng is looking to raise $500,000 according to Rauf. The majority of the chunk will be used for the marketing purpose and the rest in product development.
Classified advertising market has been growing rapidly in India. In 2011, its value stood at $245 million. The Edelweiss report expects the value of classified advertising in India to grow to $700 million.
Fxchng is competing with various vertical players. Two of its direct competitors in the horizontal model are OLX & Quickr. Its vertical competitors include Cardekho, Gaadi, MagicBricks, eBay, Housing etc.
The model that has been adopted by Fxchng is a hybrid of companies like OLX and Quikr. Upon having discussed the business model and future plans in details with the founder of the company, we ascertained that the focus of this startup lies in capturing the tier 2 and tier 3 cities of the country. However, observing the bigger fishes in the pond, who are struggling to establish a strong foothold in smaller markets despite having burnt big holes in their pockets, the ambition of Fxchng could be quite a tough nut to crack.
Also, one of the major aspects that is missing on this platform is a payment gateway which makes it difficult for the users to make intercity transactions.