IBC: With supply leadership, can build a business worth billions: Vikram Chopra, CARS24
At the India Brand Conclave, the CEO explains how they are building one of India’s biggest auto businesses on the back of used cars
Published - Nov 29, 2018 3:59 PM Updated: Nov 29, 2018 3:59 PM
At the second edition of India Brand Conclave, presented by Zee News, co-powered by Asianet News Network Vikram Chopra, Co-Founder & CEO, CARS24, touched upon the massive potential of the used-cars market. “India is all set to becomethe world’s third largest auto market behind US and China. Used cars is a $4mn market today. In five years the market is expected to double. In five to 10 years it can become a $200-300bn dollar market opportunity. It will be three times larger than new cars market So used cars are the big mainstay in the market and have a big headway to grow," he said.
Watch the session here and scroll down to read:
He shared CARS24’s business module by explaining the backend process of selling the used cars after purchasing them from customers. “We sell them online without any physical infrastructure (except the branches where we buy the car). On the backend, it’s all online, on a mobile app. It’s auctioned to thousands of partners across India. They are small entrepreneurs who are used car dealers.”
He then pointed out how with the help of technology he built a vast network, helping their 2000 partners grow their business for whom the biggest problem is supply. “This is because the car ownership is with every individual, you and me,” he pointed out. But CARS24 offered the solution by solving the car owner’s pain.
CARS24 buys cars in the top 15 cities today and sells them across 100 cities in India. “So there’s a lot of intercity and interstate movement of cars happening. This is possible because on the backend we have built a pure technology platform,” Chopra said.
With increased advertising bringing in customers to sell their cars, more and more dealers are joining the mobile app. This helps them discover better prices for these cars. This means word of mouth and more customers coming in to sell their cars. Chopra explained the potential, saying, “As a result we see our transactions growing rapidly. In three years we have reached a transaction volume of 10,000 cars a month or over 120,000 cars a year. In terms of value we are doing $300mn worth of cars a year or Rs2000 crore of transactions is facilitated in three years of business.”
By helping the customer sell a car they are becoming supply champions or the category supply leader. “We can play across the value chain because of our supply leadership. We could be in financing, we could sell these cars to customers or be in the car servicing business, so on and so forth,” Chopra added.
"If you have the supply leadership you could actually build a business worth hundreds of billions of dollars. If you do that you will not just create the largest used car company but the largest auto car company in India on the back of used cars.”
The session was followed by a fireside chat between Chopra and Partha Sinha, Vice Chairman & Managing Director, McCann Worldgroup, on the intricacies of this business.
Sinha specified that most businesses start on the demand side. He asked, “What prompted you to not start the entire C2C because there is a possibility of that itself with your platform eventually and create a C2B?”
Chopra answered by pointing out that the process of selling used cars is "incredibly broken." He necessitated the need to solve the main pain point by helping the sellers get done with the entire process fast and hassle-free. “We needed to move away from classifieds but build a totally disruptive way of doing this business (which is the transaction model). We needed to take on that pain and transaction on to ourselves and let the customers walk out with sheer delight.”
Sinha posed another interesting question on the tonality of the brand’s marketing campaign. “It’s emotionally a highly rewarding space and will only grow. It will go to smaller towns because of mobile penetration and will become far more basic and fundamental. Why in the world of internet, brand creation, which was based on light heartedness, important? Or it’s a thing that will evolve over time?”
Chopra said, “In my mind a lot of it will also evolve for a brand like us. Our customers are mostly early adopters. In the bigger scheme of things consumers are selling close to 40 lakh cars every year. Out of that we are buying one lakh. As we look into the next three years journey where we intend to buy five or six lakh cars a year and move to smaller cities, we need to revisit how we communicate. This is because we need to account for our new set of customers whom we start acquiring.”For more updates, be socially connected with us on
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