Cars24 is one of the first providers in the Indian auto tech sector. Since its inception in 2015, Cars24 has seen a healthy sequential growth pattern until the COVID-19 crisis hit the globe. Prior to 2020, the tech startup grew by employing more than 1,000 people in just three years and hiring Mahendra Singh Dhoni as one of its key angel investors. The company has a market presence of more than 130 cities and has become one of the leading companies in the used vehicle segment. It saw 100 percent growth in 2019-20, but the pandemic shut down all business operations and brought its revenues to zero in April 2020. To avert the crisis, Cars24 launched a new “Home Inspection” service to stay relevant in these unprecedented times. The company says this effective solution helped them get back on their feet, claiming that half of the traffic after the lockdown came from the home inspection.
Disclaimer of liability: This interview was taped on September 30th. The Cars24 team will send updated data with new developments that have taken place since then. We will update this copy as soon as we receive updated details.
Expert opinion: TechArc analyst Faisal Kawoosa says, “First of all, I think the company made it. A car owner who chooses to sell is in a hurry for many reasons, and anyone meeting expectations to get a car sold ASAP adds great value to the equation. Cars24 did it right. ”
He adds that due to the impact of COVID-19, many people may have placed less emphasis on assets due to financial stress. “They either sold their second car, or even the single car, and brokers often take inappropriate advantage of it. If Cars24 has remained transparent and maintained the parameters for assessing the potential value of a car as it did before COVID-19, this is a good differentiator that even consumers would have appreciated. Across the digital landscape, the trust between supply and demand is still shaky, and getting it right is very important to the overall growth of digital services. I would expect Cars24 to work on a benchmark that would add transparency, credibility, and confidence to the equation so users can transact without confusion. It should become the industry standard and that should be the goal, ”explains Kawoosa.
Gadgets 360 spoke with Co-founder and CMO of Autos24, Gajendra Jangid to learn a little more about the company’s track record in auto tech.
1. How did you see this business idea? When did you finally take the leap of faith and make it official?
In a country where around 0.35 million (3.5 lakhs) used cars are handled every month, customers’ greatest suffering has always been the result of this transaction. Five years ago, there were several challenges for an average customer in the used car industry that we wanted to address with Cars24. Our goal was to build a brand that would meet the needs of the customer when buying / selling used cars.
As a brand, we wanted to shift the focus to the supply side of the market, which was unusual for the industry. For the most part, the used car industry was very fragmented with a majority of unorganized actors. Most of these players have always focused on meeting demand expectations. To challenge the already existing marketing, we wanted to build a “supply first approach and a transaction-driven business” that focused on aggregating the supply side of the market.
In August 2015, for example, we ventured into the industry with Cars24 with our first branch on Golf-Course Road, Gurugram. We haven’t looked back since. We have expanded our presence all over India and captured the market presence of over 130 cities. Our game changer – the C2B model – has helped us scale exponentially and become one of the most respected used car companies in the industry. Our competitive advantage lies in our core offerings, namely single visit, best price, free RC transfers and instant payment options.
At Cars24, we have recorded 100 percent growth over the previous three years. These numbers clearly show amazing growth, more than any other company in the Indian used car ecosystem.
Following our hugely successful C2B business model, we continued to expand the C2C business model and introduced various industry first services such as buyback guarantee, warranty, vehicle health check and accessible consumer finance. The franchise-based business model and the business model for consumer credit – Cars24 Financial Services – make us one of the first companies in the used car sector to receive the NBFC license. We want to become the largest auto tech company in India and we keep working on it.
2. Could you share some interesting stories about the early days of the fight? How did you manage to overcome these struggles? What did it teach you
There are many scaling challenges in a startup and our story is no different. We have had many operational problems in recent years, both large and small, be it dealer or customer-oriented. At Cars24, however, we have always approached the problems with innovative solutions. Our technology and data science teams are instrumental in overcoming these challenges.
When we first started, the industry relied largely on personal / physical vehicle inspections to thoroughly check and inspect them. Since this has long been an industry standard, we knew we would have problems if we expected our distributors to switch to a digital format. It was not easy to gain their trust in this digitally dependent idea. A majority of traders were reluctant to participate in online auctions due to a lack of physical inspections.
To combat this issue, our teams in the technology department have worked diligently to build an entire environment / ecosystem that is focused on transparency, security, and full accountability on our part in order to convince distributors of our main focus, i.e. accurate and efficient Inspections of more than 150 parameters for the car. Not only did this help them easily participate in auctions, but it also helped us fight resistance and establish ourselves as a major player in the organized used car market.
Every used car is an asset and has its own journey and therefore a unique price. In order to achieve this uniqueness of the vehicle, we have found a solution and developed ‘Carculator’. an internal tool for price evaluation. With the help of machine learning, the tool accurately predicts the pricing of the car based on certain parameters such as make, model, vehicle condition and demand-supply conditions in the market.
We have learned that trust is something that any outside stakeholder looks forward to in a business and data-centric approach to solving problems in a more practical and structured way.
3. Every successful startup has to deal with challenges that the outside world knows little about. Could you please explain one such incident and how you dealt with this downturn?
One of the biggest challenges facing businesses across India is the nationwide lockdown due to the Covid-19 outbreak. Almost all of our business activities have ceased and our earnings went back to zero in April 2020. During the May unlock, we saw a huge drop in visitor numbers compared to pre-corona levels as people were unwilling to leave their homes at such unprecedented times. As a problem solving company, we made technology changes and offered home inspection all over India. An effective solution on its own after being blocked by the date half of all traffic is from Home Inspection.
4th What are the biggest milestones Cars24 has passed since it was founded? Please provide details.
For us, every milestone is just as great a success as any other. But there are some notable milestones that we care deeply about. As a startup, the question always arises: what if? Even the smallest assurances matter most in the early days. One of the most surreal moments for us as a young startup was the moment when our family became 1000 people strong.
When we acquired the NBFC license in 2019, our trip really turned out for the better. We have always kept the customer first and worked tirelessly to make used cars more accessible to the country. The possibility of providing our customers and sales partners with simple loans at low interest rates through this license corresponds to our customer-oriented philosophy.
These milestones are not just achievements, they are a reminder that no dream is too small. And that the best is yet to come!
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