As an entrepreneur if you're trying to address a critical pain point of a sector then it is really important to have a comprehensive experience in that sector. irrespective of the fact that whether the problem is in which specific area of the sector. Whether it is consumer related or growth related, if you as an entrepreneur haven't acquired the knowledge or are not familiar with the domain in which you want to start your business then it's a safe assume that you haven’t clearly understood the completeness of the problem you are trying to solve. This was clearly not the case with Vinay Sanghi the founder of a leading auto classifieds platform of our country, CarTrade. Vinay Sanghi before starting CarTrade had two decades of experience in the automobile industry.
In between the years, 1992 to 1999, Vinay worked at the family dealership firm ‘Sah and Sanghi’. Post the completion of his studies at Sydenham College he took over the charge of running the firm. While he was working in his firm, he realised that the used cars market in India was fragmented and unorganised and there was an imminent need for a one-stop platform where people could find or sell cars or find dealers with used/new cars. To solve this pain point, his firm collaborated with Mahindra & Mahindra and HDFC to come up with a joint venture called Mahindra First Choice.
He headed the joint venture as the CEO and for several years he smoothly organised the fragmented sector and slowly induced the 'Used Cars', culture in the country. However, in the year 2009, when the eCommerce tsunami hit the country he decided to move out of the company and started CarTrade. He states that at Mahindra First Choice the objective was to develop a good shopping environment for the used Car buyers with quality assurance. And he felt that there was an entire new middle-class section that wants to buy its first car. He figured out early in the game that the growing Indian middle class is okay in buying used cars and 80% of them would check it online and then buy. In the year 2008, an owner of the car kept the new car for seven to eight years before replacement, but now the scenario has drastically changed. Now, a car owner on an average looks for a replacement in four to five years. Used cars sales in India is almost three times larger than new cars. The time was right and the numbers were already on his side, with this Vinay revolutionalized the earlier fragmented sector and also transformed his startup into a mammoth sized organised used cars retailer.
It’s been touted that the used cars sector is growing at the annual rate of 18-20 percent and CarTrade with its latest acquisition of Carwale is sitting on the top of the food chain in the sector. Vinay’s CarTrade in the month of November took 90% stake in CarWale and it was a wise move considering CarWale was doing quite good in the New Cars Category. With the acquisition of CarWale, Vinay not only made CarTrade one of the leading Auto Classifieds of the country but successfully increased his firm's dealer network exponentially.
CarTrade operates as a platform for both B2C (business to consumer) as well as B2B (business to consumer) On one hand the dealers sell their used inventory and financial institutions can auction their repossessed vehicles via CarTrade Exchange. And on the other hand, people can buy and sell their cars on the platform. Buyers can explore models of new and used car and get an instant on-road price pertaining to their location. They can also compare cars and calculate their EMI according to their budget.
CarTrade has a full strength of 350 plus employees and about 250 members in the team train dealers for online auctions. They auction 8000 plus vehicles very month with their website hitting 32 million unique visitors every month. At present, CarTrade approximately boasts 10,000 new and used car dealer partners.
CarTrade recently raised Rs 950 crores led Temasek, an investment firm in Singapore and March Capital a Global venture investment firm. Previously, In the month of October 2014, CarTrade had raised $30 million from Warburg Pincus, Tiger Global, and Canaan Partners.
Vinay states that the continuous investment in CarTrade is a validation of their business model and growth plans in the Indian online auto space. He also adds that the funds will be optimised to expand their services through acquisitions and to strengthen their technological capabilities and services.
At present, CarTrade.com directly competes with players like Gaadi.com, ZigWheels, Oncars.in, Zoomo, CredR, CarDekho, etc. And their indirect competitors are OLX & Quikr.