Market reshuffling

Schibsted Classified Media Hungary Kft., the company that owns the classified ad site jofogas.hu, announced in mid-March 2014 that it had acquired the online advertisement business line of Turkish-owned Expressz, a traditional classified ad publication company that could not replicate its success on the printed publication market in the online environment, and could not keep up with the huge marketing budgets of the two largest market players.

Thus Expressz was relegated to the third position. At the time of the acquisition, about 400,000 ads were posted on the online interface of Expressz, most of which have since been transferred to jofogas.hu. But the expansion of the Scandinavian media company’s portfolio in Hungary went further: Schibsted also bought the used vehicle ad site hasznaltauto.hu.

This acquisition has no direct impact on the advertisement database of jofogas.hu because the two sites will continue to operate independently; however, the acquisition is definitely significant as hasznaltauto.hu is a key player in the important market segment of second-hand vehicles.

Meanwhile, the other large player on the general classified ads market is not resting on its laurels either. The site previously known as aprod.hu continues as olx.hu from April 14, 2014. Although hardly known in Hungary yet, the OLX brand is used in 40 languages and 107 countries. The renaming is not limited to our country; in Romania, the familiar Mercador brand was replaced.

The move seems surprising in view of the billions of forints spent on building and promoting the aprod.hu brand in the fierce competition with jofogas.hu. The reason lies in the owner’s interests: the South African media giant Naspers wants to create an internationally unified OLX brand. The users of aprod.hu are reassured that the site remains unchanged in design and operation.

There can be only one

Whatever the segment, becoming and remaining the market leader are major goals of every company because that is the best way to monetise the user base, i.e. to generate revenues and, consequently, profits. The no. 1 player sets the rules and defines the business model that provides the most income. Market leadership is necessary to turn users – fought for and acquired at huge marketing costs – into potential paying customers.

Currently, no market player can generate major revenues; both competitors invest huge amounts in building a user base and a recognised brand. The income / expenditure data of aprod.hu / olx.hu are unknown because of the owner Allegro Group’s unified portfolio management method. The profit and loss statement of Schibsted Classified Media Hungary Kft. for 2012 shows jofogas.hu only, and the figures indicate a net loss over HUF 1 billion, even though the owner is a major market player.

Read the full article  on eNet.hu