Balancing Act (London)

9 May 2014

South Africa: Africa's Transactional Internet Will Become an Everyday Experience - Ebay-Owned Gumtree Gets 3-5 Million Uniques a Month in South Africa

London — Alongside the growth of social media on the continent, using the Internet for everyday transactions is starting to become as natural as the things it is slowly replacing.

Want to sell something? eBay-owned Gumtree in South Africa is now getting 3-5 million uniques a month. Russell Southwood spoke to is newly appointed Head Of Marketing Claire Cobbledick.

Gumtree started in the UK initially targeting South Africans and Australians. It was bought by eBay in 2000 from its two founders and then introduced into a number of different international markets. Its South African presence was launched in 2005 but as Cobbledick told me:"It was run almost exclusively from California. But over the last six months it has been building a local team".

For those who've not heard of it, Gumtree is a classified advertising site: you want to sell something, you go online and put up your free ad.

You want to find something secondhand you browse the site and contact the seller when you've found it. It gets 3-5 million uniques a month, making it the 6th or 7th largest site, depending on how you count Google's different sites.

It has three strong areas: sports and leisure goods, business services and cars and income is split more or less a third each with cars being slightly smaller as it has been more recently introduced.

Business services covers things like plumbers, garden services and carpenters but also traders and is the second largest area of activity. It also includes job vacancies and jobs wanted:"A lot of people don't realize the scale of Gumtree. So many people are using it to offer better help and services. For the small trader, it opens up the channels of communication."

There are 650,000 live ads and any ad over 30 days old is taken down: 300,000 of the listings are for secondhand cars. The adverts are free but you can pay a nominal amount to have your ad made more prominent. However, the majority use it as a free service.

The business model includes this enhanced ad income as a revenue thread but a more substantial part is selling display advertising for which Gumtree uses a third party sales house.

aThere are also specialist services for secondhand car dealers whereby they can do bulk uploads of adverts and have tracking in place for response levels.

Most current use is from desktop PCs and laptops but mobile traffic is increasing rapidly as is tablet traffic from a very low base. It has an app for Android and iOS and is now turning its attention to older Blackberries and featurephones.

So what's the full potential of the market:"Despite the size of the traffic currently, we believe it can grow bigger. We launched in the Cape Town region and if we can replicate the scale of traffic we get there in other regions (particularly in the northern provinces), we'll see a further 30-40% growth."

Gumtree does regular surveys of its users and does informal calling to them as well:"Our audience - unlike publishers sites, which tend to be more top-end - is anyone who has access to the Internet. They range from a security guard looking for a job to a person selling a boat."

Horizontal competitors include another global brand called OLX, local start-up Junk Mail that is both print and online, and BidorBuy, which is more like the eBay proposition.

In the vertical markets like cars it competes with a number of players, the largest of which is Auto Trader. Interestingly data company Effective Measure said in November that there were 400,000 users of eBay in South Africa.

So has Gumtree's success affected traditional classifieds in print newspapers?:"Print classifieds have suffered more from the decline in print circulations. This is happening across all titles and would have happened anyway. There was a real need for this kind of free-to-the-user market."

So will Gumtree be rolled out into other markets in Africa:"No, but that's not to say that eBay is not looking at it."

Digital Content Africa: Balancing Act's web TV channel Smart Monkey TV has launched a new e-letter called Digital Content Africa.

On a fortnightly basis, it will cover online film, music, publishing and services and applications. We have already produced 14 issues and these can be viewed on this link:

Essential reading for those in mobile VAS to anyone just interested in what African and relevant international content they can now get online. If you would like to subscribe, just send an email to info@balancingact-africa.com with Digital Content Africa in the title line.

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