Together, the companies will run SnT Classifieds and 701 Search, which already has a strong presence in developing countries in Asia.
“From an industry point of view, it’s a signal that this is a highly attractive industry,” said Aleksander Rosinski, vice president of eCommerce at Telenor Digital, of the partnership. “For Telenor, it’s an opportunity to make a major step into consumer-oriented services on the internet and to establish a significant footprint in a high growth industry.”
Schibsted’s Anders Rikter, vice president of communications and public affairs, said, “This exciting joint venture between two large, international Norwegian companies, plus SPH, gives us more strength to pursue number one positions in emerging markets. We can do more, and we can move faster. This will improve our chance to succeed,” he said.
Both Schibsted and SPH have a strong presence in online classifieds and media. Schibsted alone reaches “around 100 million people worldwide,” according to Rikter, while Telenor is providing communication and internet services to 166 million people in Europe and Asia.
For Telenor, it’s an opportunity to make a major step into consumer-oriented services on the internet and to establish a significant footprint in a high growth industry
Online classified sites reach wide user bases because they cover so much ground – goods, cars, motorcycles, real estate and sales, accommodations, job postings, to name a few. Telecoms can give companies a strong boost in this area, by leveraging their resources to attract users and increase site visits, according to Rosinski.
“The next wave of internet users in developing countries will go online using mobile, and more specifically, pay-as-you-go products from the telecoms,” he said. This creates opportunities to offer targeted subsidies that send users to partners’ sites. For example, Telenor might offer customers free access to a particular classified site, say one run by 701 Search, whereas it would cost to access competing sites. “That would be a powerful vehicle for creating competitive advantage advertising on the internet,” Rosinski said.
The future of the online classified market stands wide open, ripe with opportunities but also uncertainties. As companies such as Telenor, Schibsted and SPH make forays into developing markets, their strategies will need to play out over time, as more and more people come online and utilize the major classified sites.
Online classified sites in Asian and South American countries “are nascent sites,” according to Rosinski. “It will be a long time before we see the full potential of these. We have to be patient and keep investing when it makes sense. When they reach the full potential, they become one of the top five sites in terms of traffic in their respective countries. They have enormous reach, but we are still very far from that kind of situation in [countries such as] Indonesia, Pakistan, Bangladesh or Thailand.”
One thing remains clear, that online classifieds are vital for media and telecom companies to establish their presence in developing markets. Smart, progressive thinking in this sector will be an important one for a long time to come.