Over the 15 years of its existence, CarDekho has transformed itself from a pure-play used car search brand to a full-stack digital enabler that supports the car buyer through the entire purchase journey. With five verticals – new auto business, used car business, financial service, insurance and international business — the company has set sight on 70% growth this year. In conversation with Akanksha Nagar, the firm’s co-founder and CEO Amit Jain explains why the firm remains bullish on its international business despite the supply chain challenges it faces. Edited excerpts:
The used car market in the country saw a big surge in interest during the pandemic with many people wary of using public transport. How does the growth prospect look like over the next couple of years?
There were a lot of supply chain challenges last year in the used car market but now supply is back on track. Earlier many people who were planning to buy new cars shifted to used cars also because the new cars had long wait periods. That effectively created higher demand for used cars and ended up increasing the prices too. As the supply of cars is back in full swing and new cars are not putting consumers on the wait list, the used car market will start seeing some price correction of about 5% to 10%.
In Q4 of this CY, the market will start seeing supply mobilisation of many more used cars, and we expect the market to grow at almost double the pace over the next four years.
Girnar Software-owned automobile portal CarDekho entered the unicorn club two years back. Which verticals would be the growth enablers for the company in 2023?
InsuranceDekho, Rupyy (fintech), and our international business would be the key growth enablers for the company this year. In InsuranceDekho, we have about 70,000 networking partners covering 93% pin codes across the country and are looking to expand this network to enhance penetration in tier-II and III cities. Our lending vertical Rupyy has partnered with 26 banks on a single platform and we are planning on expanding the lending book to clock 60-70% growth in the next two to three years to aid consumers with a convenient and swift experience on the app.Our international business is growing by leaps and bounds with a presence in Indonesia, Malaysia and Philippines and the focus this year would be to double the current annual revenue of $27 million.
You face stiff competition from younger competitors such as Cars24 and Spinny, which have also seen major uptick in business. What sort of capabilities do you need to outperform the competition?
As a group, we hope to grow 70% this year. Our focus right now is to find a profit pool and a playbook that works in the segment of used cars and generates cashflow. We are not chasing GMV or growth at this stage. I think every player in the used car segment, including us, is losing a lot of money.
In terms of the overall revenue contribution, the insurance vertical has been the outlier, contributing to almost 35- 40% to the group revenue. On the new auto side, we expect the revenue to grow by 30% this year, given that demand and supply are normalising. On the used car side, we are looking to double down on the auction segment and the business should grow by 40% because we are reducing the burn rate there while trying to create a sustainable, profitable playbook before we expand. We are making huge investments in the fintech entity, where we have committed a $100-million infusion. We look forward to raising a similar amount of money in the insurance vertical to fuel growth.
How do you plan to align the company’s marketing strategy in line with your growth target?
We are reducing the ad budget given the profitability focus; therefore, we will spend 60%-70% less in advertising this year compared to the last year. We are expecting good returns for the brand from the Shark Tank exposure. Digital has always been our focus but we do TV also depending on the kind of campaign we have lined up.