Brazilian online marketplace OLX eyes aggressive expansion
The president of OLX, controlled by South Africa’s Naspers Ltd and Norway’s Schibsted ASA, said the company would spend 200 million reais ($61.4 million) this year on technology and innovation.
SAO PAULO - Online marketplace OLX Brasil plans to boost investments by 21% this year in an aggressive bid to gain scale amid an e-commerce boom sweeping Latin America’s largest economy.
In an interview with Reuters, the president of OLX, controlled by South Africa’s Naspers Ltd and Norway’s Schibsted ASA, said the company would spend 200 million reais ($61.4 million) this year on technology and innovation.
“In 2017, we hired 255 people. We’re doing less things manually with the help of artificial intelligence. ... We need to gain share now while we accelerate our product development,” said Andries Oudshoorn, originally from the Netherlands. The company, which currently has 550 employees, will add another 40 in 2018, he added.
OLX began in Brazil in 2010 as a site for individuals to sell and buy used items, and in 2015 it combined operations with site Bom Negócio, putting it in direct competition with dominant e-commerce player MercadoLibre Inc, which has been focusing increasingly on new items in recent years.
While OLX had run at a deficit before 2017, last year the company recorded positive earnings before interest, taxes, amortization, and depreciation - a common operational figure known as EBITDA - for the first time.
As part of the company’s strategy, Oudshoorn said it would focus on “verticals,” or distinct markets in which the company wants to gain share, such as real estate and automobiles. In 2017, he said, the company facilitated the sale of 26.7 million items for a total of 57.6 billion reais.
“We want to position OLX as the leader in verticals for cars and real estate. We’re already the biggest site in these verticals, but we’re not seen like that,” Oudshoorn said.
He said the company was looking to achieve an EBITDA margin of more than 60% “in the coming years,” which he described as a benchmark number, citing the operations of Russian site Avito, owned by Naspers, and French site Le Bon Coin, run by Schibsted.