It is no secret how Sulit became the Philippine’s internet superstar since its inception in 2006. That’s why it’s a huge surprise how a giant could just suddenly give up all its brand equity to become the lesser-known OLX Philippines.
Before Sulit, there was Buy&Sell Philippines, the company behind the free classified ads magazine. It was husband and wife RJ David that proved the internet is a level playing field, starting Sulit from scratch and a meager budget of Php2,400.
The growth of Sulit was the envy of the owners of the Buy&Sell magazine that they tried, in vain, to regain the crown.
By 2009, there were a lot of interested buyers. This includes eBay and the now investor and majority owner, Naspers. Singapore Press Holdings (SPH) was also interested in Sulit and made an offer. When their bid failed, they formed a joint venture with Schibsted ASA (a leading classifieds ad company in Europe) to create AyosDito.
(Disclosure: The author was one of those who attempted to broker an investment deal, but it was too late since Sulit had agreed to the terms of Naspers).
Naspers bought 51% of Sulit for an undisclosed sum (see story here).
The initial investment catapulted Sulit from the top 25 most visited sites to no. 1. The team grew from an initial 5 (the founding couple and 3 friends/relatives working as Forum Moderators) to just under 50 in a short amount of time.
Succeeding investments made Sulit a household brand with big-budget spending on TV commercials, billboards and bus ads; that’s on top of digital campaigns via Google, Facebook and YouTube.
The company even grew to almost 100. The office atmosphere was like that of Facebook or Google that includes free buffet weekdays and even their very own Starbucks kiosk inside the office during anniversaries. This also further reduced the share of the founders to merely 17%.
With all the spending and the expansion, it was already obvious that Sulit was building for scale and market share instead of focusing on profitability. Majority of the revenues came from Google Ads and very little from direct or premium ads. Essentially, they were still operating at a loss. The goal was to get as much market share away from aggressive competitors like AyosDito, eBay and the likes.
Sulit was already enjoying in excess of 60% market share but it wasn’t enough. They needed to be bigger so that competitors would become insignificant. At least, that seemed to be the direction.
Meanwhile, the mother company also wanted to get into verticals. Tsikot was among those that were approached, with offers reaching up to Php100M in investments spread out in 5 years (see story here).
That deal fell through so Sulit had to pursue their own, pushing sub-domain verticals like cars.sulit.com.ph and realestate.sulit.com.ph.
Sulit even bought out the fledgling Pinoy Auto Trader (PAT), a promising vertical in the car classifieds market.
All the while, Naspers had something else in mind. Not soon after the acquisition of Pinoy Auto Trader, Sulit announced that it will be closing down the site; a move that surprised even the founders of PAT.
In December of 2013, another announcement was made — Sulit is merging with OLX. OLX has been around for as long as Sulit but they were never really active in the Philippines and thus, wasn’t even a familiar name to a lot of Sulitizens (a name referred to folks who are members of Sulit). Nevertheless, the site is also a leading brand in so many markets globally and they’re also partly owned by Naspers.
By then, it became apparent that Naspers was looking at another direction altogether. The decision was made. OLX will have to be the new face of Sulit (see story here). It was a quick decision since Naspers was the majority owner anyway.
While it was very hard, the founders had very little or no choice but to follow in that direction. If they want to retain Sulit as it is, there will be no more additional investments and Sulit had to become profitable and support their operations. If they merge with OLX and make the pivot, they get fresh infusion and continue to run the company. The founders practically shed tears over this decision but it was a sacrifice they had to make for all the years they spent in building the company and the brand. It was their baby.
OLX is a huge network globally and while Sulit will no longer be the banner brand, the people behind it and the community remains the same. This is a landmark story of two Filipino entrepreneurs aspiring to go big. It’s a story of success. The OLX merger is a testament to that.