The One Who Solves Supply Shall Create The Biggest Auto Company In India: Vikram Chopra, CARS24
In an exclusive interaction with BW Disrupt, Vikram Chopra, Co-founder and CEO, CARS24, talks about the company and more.
CARS24 creates an efficient and reliable way for car owners to sell their used cars at a reasonable price.
Founded in 2015, CARS24's mission is to revolutionize the way used cars are sold in India.
Brief us about your business model like how did the idea come to start and how does it work?
CARS24 is India’s fast-growing auto-tech startup, founded in 2015 with a vision to streamline the car buying and selling process in the country. It enables customers to sell and buy pre-owned cars and, now pre-owned bikes within an hour of a single visit to one of the many CARS24 branches.
Before seeding the concept of CARS24, the founders realized that the pre-owned car industry was largely unorganized since long. There was a huge gap in the demand and supply of the pre-owned-car industry. There was no standard procedure for selling or buying a used car; it also lacked the technology to determine the right price of the car. Adding to this is the cumbersome process of reaching out to individuals and unorganized market players who do not provide a detailed evaluation of the car. A seller has to put in a lot of time and efforts to find the right buyer while the buyer faces similar concerns about the authenticity of the seller. The hassles continue, as complete payment and document transfer become a major overhead. Looking at these gaps, we wanted to use technology to solve this problem and streamline the pre-owned car buying and selling process for the customers. CARS24 believed there was a huge potential in the pre-owned car industry and our idea can bring a revolution, the growth since the company started speaks for itself.
C2B Process: To sell a car, one has to simply visit the nearest CARS24 branch or opt for a home inspection, the complete process includes a 200 point ISO certified vehicle inspection followed by the proprietary live auction to get the best price; the car is sold within an hour and the payment is transferred to the seller bank account.
C2C Process: To buy a car, one has to select the car of their choice from our website, either visit CARS24’s yard or the seller’s place with the company executive to physically examine the car and get a test-drive. The car is delivered to the buyer post the payment in less than an hour. CARS24 also offers easy finance options with value added benefits like money back guarantee for its customers.
For both buying and selling cars, CARS24 takes care of the complete documentation including the RC Transfer
What are the unique key points of your company? How are you different from the existing competitors?
CARS24 are the pioneers in introducing the concept of selling a pre-owned car in a single visit and getting the best price. In 2019, CARS24 started its C2C model to provide end to end solution to both car buyers and sellers through simple yet efficient services that offer trust and transparency to the consumers using technology and solving the concerns of both buyers and sellers. Apart from developing the concept of closing the deal in two hours, our unique post-sale services of instant payment and hassle-free transfer of RC have been some standpoints which differentiates us from other players.
CARS24 are the pioneers to establish the C2B business model and the state-of-the-art Live Auction for pre-owned cars. The lakhs of pre-owned car transactions and a mega network of channel partners built over the years makes CARS24 stand apart from rest of its existing competitors. The company uses advance algorithms based on lakhs of transactions along with thousands of bids for every single car from the channel partners ensures nothing less than the best price.
CARS24 is one of the largest organized pre-owned car companies with its operations in more 70 cities, offering services in more than 210 branches PAN India.
3. What is the funding status and monetization model?
CARS24 has infused capital of $100 million in their Series D round of funding in 2019. The financing was used to strengthen the footprint of the company in new cities, franchise model, technology and the CARS24 Financial services.
It has raised funding of more than $200 million in the last 4 years. The firm backed by some of the marquee investors like Sequoia India, Exor Seeds (a venture fund affiliated with one of the world’s leading holding companies controlled by the Agnelli Family), partners of DST Global, Kingsway Capital (London based multi-billion US$ fund) and KCK (Silicon Valley & New York based investment firm).
CARS24 monetization model is based on a nominal service fee charged depending on the car’s value.
What challenges are you facing in running your business?
The used vehicle's market is a supply-constrained market, the one who solves supply shall create the biggest auto company in India and hence the company focuses exactly on that and it’s the only one doing it right as of now.
How has been the people's response so far?
People’s response has been overwhelming! The business helps people solve real life problems, before CARS24 came into existence, selling a car in 1 visit and getting the best price for it was merely a dream. Starting off in stealth mode to transacting over 1.5 lakh cars annually in less than 5 years proves that CARS24 is the choice of people when it comes to pre-owned cars. Even as the COVID-19 restrictions ease, CARS24 is seeing that the more than 60% of their seller traffic and 80% of buyer traffic is back to the pre-COVID numbers hence there is a good turn around in the market.
What are the traction details (like users, app downloads and other achievements of the company?
CARS24 has recorded nearly 3 lakhs pre-owned car transactions since its inception in 2015. Being a technology-driven company, it has developed several apps for our customers, channel partners and the staff, available on Apple App Store and Google Playstore.
CARS24 was awarded the innovative startup of the year by Entrepreneur India
In 2019, it recorded a growth of 150% and transacted more than 15,000 used cars a month; 1.5 lac plus customers PAN India sold their used cars to CARS24. Four out of ten potential car sellers tried the company’s services when selling their car, which is a sign of customer’s trust in such a short time frame.
The company expanded its operations from 18 cities to 73 cities and added 102 new branches making it a total of 202 CARS24 branches at the end of 2019.
It was the first pre-owned Car Company to procure a non-banking financial company (NBFC) license from the Reserve Bank of India (RBI) and ventured into the consumer lending business.
How do you look at expansion?
CARS24 is on the mission of building the largest auto tech company in India. The company began with its highly successful C2B business model in 2015. Post that it has expanded exponentially adding C2C business model, procuring NBFC license and the recent addition of pre-owned two-wheeler segment.
Currently, CARS24 offers more than 50k good quality, thoroughly inspected pre-owned cars of different segments with easy finance options. Select pre-owned cars also come with money-back guarantee.
It is the first pre-owned Car Company to procure an NBFC license and offered easy finance for purchasing pre-owned cars. The company is targeting a loan disbursement of nearly $ 25 million in the coming year.
Our newest addition pre-owned two-wheeler is up and running in Delhi NCR region and it intends to register its presence in top 15 Indian cities within the next 6 months.
What are your marketing plans?
CARS24 has a 360-degree comprehensive marketing strategy that focuses on multiple marketing mediums including TV, Radio, OOH, Newspaper, and all digital mediums. And moving forward they further plan to leverage digital platforms for marketing to an even greater extent since they believe that digital/online is the future. Hence, they plan to focus more on digital campaigns.
9. What has been the biggest learning so far?
The supply first and transaction led business model was the biggest learning while the rest of the existing organized players in the used car industry were majorly solving the demand side of the business using classified lead generation model. CARS24 solved supply first that has been the main reason for our success and also the biggest learning so far.
10. What is the market size and opportunity?
As per industry estimates for India, 1.25 used cars were transacted for every new car transacted in 2018. In other words, used cars accounted for ~55% of the total 7.5 million car transactions in India. As per the forecast, used cars will account for ~75% of total transactions in India by 2025 (as is the case in the US & other mature markets) more than doubling from current ~4.2 million to ~9 million. As per the recent consumer survey done by CARS24, 22.5% of people have started to prefer buying a used car over a new car which would further lead to the growth of the segment.
Since its inception, CARS24 has expanded from one office in Delhi to 50+ branches across 10 major cities in India, with a team of more than 700 employees. With an established footing in the used car industry, CARS24 has thousands of satisfied customers who stand by the company's name.
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