Naspers gets a stake in worlds third largest classifieds

I saw an article in the FT that Naspers have merged their two classified websites, OLX and Slando in Russia with their rival Avito. OK, who cares you say! Well, because it turns out that classifieds are huge in Russia, this combined website will be the third biggest classified website, wait for it, in the world. Yes. I checked the Avito website quickly, and the listings alone for Moscow were 2,343,359. According to the Wikipedia entry for Moscow, the population is 11,503,501. So, roughly 20 percent of Muscovites have a listing on that website. Astonishing really, if you think about it. Paul asked whether or not there was a good delivery mechanism, I said I don't know, I don't speak Russian, although my "Russian English" is very good. I do accents well you see, or at least I think I do.


The FT article: Naspers in $570m Russian internet merger, makes some amazing pointers about the business Avito. One in five motor vehicles in Russia is sold on that website. Expectations are for 100 million impressions a day on the merged website, remember that Russia has a population of a little less than 150 million. What! Is everyone a pawn master there, kind of like where ebay was 15 years ago.


In the end Naspers will own an 18.6 percent part of the combined classifieds website (Naspers will invest 50 million Dollars too), which will maintain the Avito name for the investment. According to a blog that I read, Russia has a large urban concentration with very few retail services, so ironically this works well here. Capitalism, it is buried inside of all of us. Even Russians, who tried socialism as an experiment, but that didn't work out that well. The royal family wasn't working too well before that either. Amazingly the owners and folks who started the business are not Russians, rather Swedish guys with an entrepreneurial flair. Filip Engelbert and Jonas Nordlander. This is classic Naspers, find the entrepreneurs, take a meaningful stake in the business and run with it. The ebay of Russia. Make no mistake competition is fierce there, this business will only have a quarter of market share. We continue to view Naspers favourably.