India’s one of the dominant networked automarket place to providing buyers & sellers an organized platform forpurchasing new and pre-owned vehicles.
It was founded by Vinay Sanghi in 2010 It has its headquarters at Mumbai, India.Since its inauguration in 2010, they have expanded their offerings across Indiawith a strong network of more than 4000 dealers. At present, more than 4million consumers visit CarTrade.com every month and avail its features.CarTrade.com’s business can be classified into two parts: CarTrade.com, thecustomer entry where the users can buy and sell cars. CarTrade Exchange, thetrader entry which helps them advocates their business operations.
HISTORYTheir family has been into the autobusiness since the 1960s. Vinay Sanghi spenttwo years in the 1990s in the family business and moved on to incubate MahindraFirst Choice, a joint venture between Mahindra Group, myself and HDFCBSE -1.35%. He spent 10 years with them and in 2009, started CarTrade. The idea was tosimplify car buying for the Indian consumer.
We spent the first four yearsbuilding out the used car experience. By 2014, we were leaders in the industrythough we were the last marketplace to start. In 2015, he acquired CarWale. Together,they had a very strong leadership in used and new cars. Last month, they had 19million unique customers visit their website. Now, they are a completemarketplace and have the largest supply of listings and dealers of used and newcars. POSITIONING STRATEGY:The quality wanted to reach out to the fluid internet base inthe country and showcase CarTrade.
com as the only online terminal forcatching the widest range of cars and the best deals. Using Vserv’s innovativeSearch Intent Ad format, we created a mobile ad campaign to attract buyers onmobile and to create brand awareness about CarTrade. This modern format allows havinga built-in search trait within the mobile ad which takes the user to the exactsearch results based on the keyword.
This helped define CarTrade.com as thego-to terminal for consumers interested in buying cars. CUSTOMER SUPPORT:· CarTradeallows its customer a privilege to look for used and new cars without adjustingtheir luxury, which otherwise they have to visit around 20 odd traders. · Then, CarTradegives assurance of certified cars to the customers. First thing that strikes themind of any customer is the condition of the used cars and this doubt wascleared by CarTrade through the certified engineers of CarTrade who checks thecars before listing it on the website along with a report. CarTrade has 200automobile engineers, on its payroll, who certify cars on its website.
· To makesure if the price is reasonable, and to help its customers, CarTrade provides ajustified price one should pay for the car. PRICING STRATEGY:Distinguishedvalue pricing is made up of a group of inputs, such as buyer’s perception ofthe product performance, the channel deliverables, the warranty, customerbacking, and softer attributes such as the suppliers prominence, principles andrevere. Value pricing is a matter of re-engineering the company’s operations tobecome a low cost producer without sacrificing quality to attract a largenumber of value conscious customers. Car trade used special prices in certainseasons to draw in more customers. Car trade uses customer segment pricing bypaying different prices for the same product or service. PRODUCT STRATEGY:Cartrade continually asses the needs of end customers, dealers, competitors trends in defining & evolving the CarTrade exchange product.
CarTradedefines both long term & short term strategy plans to achieve the productvision. PROMOTION& DISTRIBUTION: CarTrade started a certification service toprovide quality checks to pre-owned cars and for maintain clarity. ‘CarTradeRight Price’, is a tool which suggests value for listed cars. Now, the companyis assimilating these tools to link the financing gap. “Banks are not comfortable extending loanswithout proper information and the certification and price information helpsthem to evaluate the value for financing,” CarTrade major source of income is through displayadvertising AdSense” MARKET SHARE: CarTraderecently lifts 33 million consumers visiting every month and asserted that it has8000 pre-owned car dealers. Funding raisedin 2016 -Rs 950 crores.Overallfunding raised -Rs 1200 crores.
Growth – 60% (last sixmonths) The predicamenthighlights the nature of the used car market. It does not affect much assurancein bankers or clients and that is the crack that CarTrade seeks to link. SALES & PROFIT:”These businesses have 50-60% of operating marginsbecause 80% of the traffic we get is organic.
Our major costs comprise oftechnology, staffing and marketing and it is not high. The company currently sells 50 million bikes ayear. CarTrade reaps 70% of its credit out of the new car division through disclosingand charges contribution fee from dealers – Rs 6,000 to 40,000 per month fromused car dealers and Rs 10,000 to 2 lakh per month from new car dealers. To drive up its revenue the brand lately starteda crisp drive termed ‘CarWale Advantage’ which allows buyers a price choice oncars that have continued unsold for over 60 days by new car dealers. This,Sanghi claims, has added 5% to CarWale’s credit.CARTRADE COMPETITORS:· CarTrade’s biggest competitor in Indian marketis cardekho.com and Droom whichprovides similar kind of services.
· Cardekho has partnership with more than 4000car traders over the nation. · Droom offers a various automobile services likewarranty, RSA, insurance and auto loan. CHALLENGES:· Biggest hurdle is in instilling the confidence of used-carbuyers. Most of the buyers of pre-owned cars would always be worried about thepost sales service & spares availability. · Advancing legal claims and discharge pattern are also thethreat for the growth of pre-owned industry. · Due to rigid discharging pattern, it is getting severe tosell aged cars with diesel engines.
RECOMMENDATION: Growth of pre-owned industry requiresinnovative business model and product offerings to surpass the growth barriers.Independent organized players shall also invest in service & sparesinfrastructures and their TAT of service and spares availability shall reduceand ultimately shall becomeequal to new car dealerships