Used car marketplaces have made the most of the growing demand for digital sales since the pandemic. Spinny posted 40% growth in CY 2023, with 73% of the demand coming from first-time car buyers. In this interview, Niraj Singh, founder & CEO, Spinny, talks to Alokananda Chakraborty about the scope for differentiation in the category and ways to tackle the supply side challenges. Edited excerpts:
Experts say the used car market in the country will touch the $100 billion-mark in the next 10 years. Give us the top three reasons driving this growth.
The used car buying space has been on an upward spiral year-on-year, especially after the pandemic where it has been witnessing a 14-15% growth. In fact, it is logging a greater growth percentage than new cars. The size of the used car market in India is estimated at $31.62 billion in 2024 and is projected to reach $63.87 billion by 2029, exhibiting a remarkable CAGR of 15.10% during the period. Several factors are already at play here, including economic factors, the need for personal mobility due to safety concerns that restrict people from using public transportation or shared transportation, and the desire for upward mobility.
Both conventional automakers and start-ups in the organised sector have experienced consistent growth in sales. Used car marketplace platforms/players offer numerous benefits, along with transparency factors to simplify the buying/selling process. The prices and accessibility of pre-owned vehicles are also huge draws for consumers, especially first-time buyers. With customers getting great prices and a hassle-free selling experience for their existing car, there is a trend of upgrading or exchanging with a better-used car, suited better for unique needs and aspirations of each customer.
What is the scope for differentiation in the used car market?
When we started to operate in this category, we saw that there were many players, but we realised that not all are respecting the kind of emotions you have while buying your new car wholeheartedly. So, we realised there is a clear room; our reason to operate in this category is to respect that emotion and try our best to solve that. What sets us apart from other aggregators of pre-owned cars is that Spinny owns its own inventory, which gives us greater control over quality, transparency and accountability. If you’re not owning the value chain, you cannot control the quality and you cannot take accountability of what you’re delivering to your customers in the market of variables.
But at the same time, we have insanely strong integration of tech, data science and analytics in everything we do. So, every decision-making process is powered by our tech. This, in a way, ensures that we are scaling the business without taking unnecessary risks.
Competition has grown by leaps and bounds. Why would a prospective buyer go to Spinny and not any of the other aggregators of pre-owned cars?
The full-stack model essentially means that Spinny buys vehicles from sellers, manages its own inventory and sells directly to the end customer, thereby owning the entire value chain. In comparison to the traditional distribution process we are able to assure quality. By using market data to arrive at a fair and fixed valuation, Spinny is able to give you the best price, whether you’re buying or selling a car.
But supply is a bigger challenge than demand in your industry. Why is it like that? What will it take to move the needle?
There is a huge gap between demand and supply. The sellers are always looking to maximise the price they will get and will, therefore, look at multiple prospective buyers. On the demand side, it’s not about just getting the best possible deal, but also the right car, which means customers will also look into factors such as quality, safety and accountability. Sourcing a seller, therefore, becomes more difficult than getting a buyer.
There are three things that need to be catered to for a seller. One is the pricing, which needs to be the most competitive. Because of our model, we are able to offer a very competitive price. Then comes speed and convenience. Second, in our system, for sellers, everything is curated, whether the seller wants to sell from home or at the nearest Spinny Hub. So, it is as convenient as it can be and it is very quick; if you want, you can sell your car the very same day. For a seller, one needs to submit a few basic details of the car on Spinny’s online platform, after which they will be given a car valuation figure. If the seller is comfortable with that range, Spinny will carry out an inspection of the car on the same day at the seller’s doorstep. This will be followed by a final quote. If accepted, Spinny will make the payment and collect the car then and there. In this way, sellers can sell their cars online.