1 Share some insights about your growth journey in the past one year and insight about your business model
In the past year, we have grown aggressively to 75 stores across 17 cities in India including key metros and non-metro cities. We are on track to open 150 stores across 40 cities by 2021.
OLX CashMyCar, centers around addressing the needs of convenience seeking users who are looking to sell their cars instantly. We source pre-owned cars from sellers and then auction it to empanelled channel partners. Upon receiving the cars from sellers, we undertake a thorough inspection of the same and then offer a price to the seller.
Given our decade old presence in India, and the huge volume of data generated on OLX every day, we have been able to develop a deep understanding of consumer behaviour in the automobile category. We ensure that through our process, the customers have a hassle free experience of visiting our center and selling their pre-owned cars at the best possible price.
2 What are the milestones that you have covered during this year
In the past one year, we have expanded our footprint to 75 stores in 17 cities including both Tier 1 and Tier 2 cities. with plans to hit 150 centres in 40 Indian cities by 2021. Since January this year, OLX CMC has engaged one million users via its website, stores and call centres. OLX CMC has also witnessed a growth of 10 pr cent month-on-month in terms of cars being brought on the platform.
In addition, we have recently launched our first national marketing campaign in order to build consumer awareness towards OLX Cash My Car and strengthen our market leadership further. In order to grow the vertical further, we are also conducting on ground campaigns across the cities we are already present in especially with car owners who are looking to sell their existing cars.
3 What are your future plans?
In order to strengthen our presence, we plan to continue our expansion to 150 centers across 40 cities by 2021. We will also add products and services over the next few months and years, which address unmet needs in the Indian pre-owned car ecosystem. With our recent investment of USD 400 million in FCG (Frontier Car Group), we will be using the investment to further strengthen the already successful partnership between the two companies. This will allow for faster expansion while improving and increasing the services available to buyers and sellers, setting a new industry benchmark for the pre-owned car trade. Dealers will benefit from improved intelligence via a Dealership Management System (DMS), an enhanced resale capability via OLX, and provenance and pricing data. Sellers will also gain a new range of ways to sell their pre-owned cars in a trusted and transparent way.
4 How do you compete with others players in the market that have strong presence?
What clearly differentiates OLX from its competitors is our unwavering focus on consumers and the value we are able to create for them through ease of discoverability, and liquidity on the platform which has led to OLX being a household name in India. We are the undisputed leader in the industry, and we innovate to solve issues for the ecosystem and expand.
The unorganised pre-owned car market still thrives in India. With OLX CashMyCar (CMC), we are determined to organize this segment while offering a higher level of comfort to users to sell their car offline without compromising on their need for immediate payment. Our deep
understanding of the pre-owned automotive ecosystem has translated to an industry leading experience for users in terms of selling pre-owned cars in a secure and transparent manner.
OLX Auto which is the online vertical for pre-owned cars is a market leader in the country with over 80 per cent market share in the same. Everyday 22000 cars and 18000 two wheelers are listed on OLX. OLX CashMyCar borrows from OLX’s market leadership in pre-owned auto to standout from the other players.
Unlike other players, OLX has the most expansive and robust supply of pre-owned cars on the platform and an equally large number of dealers. A combination of these 2 factors has ensured that we are miles ahead of the competition.
Given the large market size and our unparalleled market leadership, we believe that the segment offers an opportunity for all the players to drive the overall growth of the market.
5 What are the trends that you see on the platform?
The market for pre-owned cars is witnessing a double digit growth of around 15 per cent y-o-y unlike the new car segment which is witnessing a decline. As per our market report OLX Auto Note, the pre-owned car market is currently estimated to be USD 14 billion, and OLX estimates that it will have risen to USD 25 billion by 2023. At 1.4 times the size of the new-car market in the coming years, pre-owned cars will have touched over 5 million units by 2020 and 6.6 million units by 2023.
The pre-owned car segment is reflecting very interesting trends in terms of car ownership and consumer behaviour overall. One of the most prominent trends is that this strong growth in pre-owned cars is spurred by millennials, who are digitally savvy, seek choices, maximize value and are conscious of their impact on the environment. Millennials – those between 22 and 37 years of age today – place emphasis on the resale value alongside the technology and safety features in the car, over other considerations like size and brand
Millenials are not only deriving value through buying pre-owned cars online, but also through selling their cars online – 54 per cent affirm that they got a better value for their existing car by selling it on online marketplaces.
Almost half of the millennials (49 per cent) who purchased a pre-owned car during the last one year were first time car owners. The other half already had an existing car.
The trend reflects the fact that millennials are increasingly opting for a pre-owned car as their first car since it is 20 per cent-30 per cent cheaper than buying a new car. Plus car ownership duration has declined from 7 years to 4 years spurred largely by ease of financing and a demand for new technologies available in the car.
6 Why are pre-owned cars doing well during this slow down?
During any economic slump, consumers reduce their discretionary spends, in order to minimise their expenses. Pre-owned goods surge in popularity whenever there is an economic slowdown since users tend to scout for deals. A pre-owned car could be 20 per cent-30 per cent cheaper than a new car which prompts users to buy the same.
Having said the same, the new car economy and the pre-owned car economy are two sides of the same coin. The demand for pre-owned cars will only go up if there is an increased supply of fresh cars from the new segment. Hence we are not isolated from the slowdown. We are hopeful that the demand for new cars will pick up in 2020 which will further aid the growth of the pre-owned car segment.
