CarDekho invests heavily in the digital infrastructure and for used cars, at outlets where cars can be evaluated and taken in or sold. Mehta says that the new car business is profitable at this point due to the rich content that it generates which eventually creates leads and gets monetised.
By Srinath Srinivasan
India’s car industry is in the midst of a major slump. The millennial mindset of using ride hailing apps over owning cars is adversely affecting the auto sector, aver some of the biggest automobile makers and policy makers. CarDekho, a Girnar Software company, wants to provide its customers not only a good buying/selling experience but also a great ownership experience of both new and used cars. Started as an automobile content generating platform, CarDekho has incorporated technology and diversified into addressing pain points across the car buying/selling value chain today.
“A lot of transaction-based activities have emerged in the online automobile industry in the last five years, because of internet penetration. We had to choose whether we wanted to be a full stack player or stick to one vertical. We chose to serve customers end-to-end. The ecosystem also needs more full stack players to grow,” says Gaurav Mehta, CMO, CarDekho.
According to Mehta, today a customer is flooded with information through the content generated and wants to carry out the buying/selling process under one roof, without any hassle. Now, the used car market is a difficult one, as it lacks the trust that’s found in the new car business. This has opened up a lot of use cases for Mehta and his team over the years.
Mehta says that in the last year, transaction volume in the used car market overtook that of the new car market. “Used car market is a highly disorganised one. This is where the opportunity is,” he says. Mehta says that CarDekho has a strong financing and insurance network which can process customer requirements in the used car space faster than traditional players. “We do the document verification and valuation for customers. These are all backed by consumer behaviour data that we have collected over years. Our data systems interact with each other to optimise every step,” he explains.
CarDekho invests heavily in the digital infrastructure and for used cars, at outlets where cars can be evaluated and taken in or sold. Mehta says that the new car business is profitable at this point due to the rich content that it generates which eventually creates leads and gets monetised. So far, Girnar has raised $190 million from Sequoia, HDFC Bank, Axis Bank and other investors.
Digital has enabled CarDekho to expand its new car business across India, and with its old car business, the company works with 4000-plus dealers across the country. Its 55 used car outlets called ‘Gaadi stores’ are present across 10 cities. While a major share of its revenue comes from the Indian business, CarDekho also has presence in Indonesia, which has grown 1000x in terms of revenue from FY18 to FY19.
“In India, the used car market is growing at 10-15% and because we have digitised our process, our business is expected to grow at 70-80%. For new cars, we expect nearly 50% growth despite the slowdown,” says Mehta, talking about the growth prospects in this industry.