April 7, 2020
Buying a Car in a Digital Age – Panel discussion with Carwow, Cars24 and brumbrum  – NOAH19 London

Buying a Car in a Digital Age – Panel discussion with Carwow, Cars24 and brumbrum – NOAH19 London

Buying a car in a digital age, please. Come on stage Ames we have genre and Francesco Suya from frontier and for she can’t come because his flight was canceled. Please. Come on stage welcome And these are huge numbers You know you are dealing with how many how big is the car buying market or how many cars used and you? Roughly does anyone know? Yeah, we’re talking about millions Trillion or something I checked So buying cars is a highly complex process Right and the car D does only have one brand so you have to often visit several showrooms How can this go online? Are we just talking about the last bit or? anyone has some data we are always looking actually already since the 90s the online sales share which in Categories like music and fashion is very high Travel is obviously very high but cars Doesn’t seem to be since it’s so bulky a product. Can we talk a little bit about? where we stand and what penetration levels anyone knows yeah for for India, its I would say in the new car the offline It’s completely offline game right out of the cars being sold in there right on new cars are so long line All cars are sold offline. There is no online transition of Cars are sold or flyer. But research online, right? Yeah, exactly That’s where you guys come in many we do a quick quick introduction If you start boom boom, yeah, very nice name But it’s the core problem you solve and with waste and we are solving the buyer problem from a consumers perspective So we are actually operating as an e-commerce We manage the transaction we cash in from the client and we deliver the car and we are positioned on two use cases for used cars And for car as a service for new cars and you take ownership of the car versus the classifieds So then you trading margin on the car exactly ten twelve percent exactly We also serve, you know sell the value and the services like loneliness insurance Delivery charges except you’re based in Milan. Yes. It said not the most digital country in Europe, but Obviously they are going and we have later and rapid journey from real web. He talks about the movie are You operating only in Italy also in other countries We are looking at other countries right now with the liver all across the country in Italy wonderful How many cars have you sold? Is it a number you it’s in thousands in the thousands? James Koala is obviously a Wow name and in the industry one of the or the market leader I think in Europe for new cars, yeah Yeah, tell us a few yes, we’re online Marketplace and UK Germany in Spain at the moment and we cover predominantly new and nearly new cars cigars up to one year old two year old all brands work with Dealers leasing companies manufacturers and alcohol proposition is comparison between all cars. Hope you choose which one to buy Comparison between prices ways of financing new versus nearly new and how to sell your car as well So you take care of the whole process end to end here exactly. So we don’t take the inventory pure marketplace charge largely on transactions Okay, you ship what? What does it cost roughly to? sell a 10% you say we take for it less than one percent of the Car sold and we sold I think works is seven billion pounds worth car sold through flat phone or Wow interesting Cars 24 from India. Okay, so Cash, we are solving again to the used car space in India at present our main Hypothesis that we want to solve the supply side of a used car in India We want to solve the pain points a seller has like you were mentioning right? We have to sell your Tesla car, right? You didn’t know where to go in how to find a buyer and how to do it I bought this Tesla car and I don’t know why but it whoever drives with me is complaining Not sure if it’s my driving style or the car, but one thing is for sure. I always drive alone and So the probably I need to change the clothes so seller has so many questions in his mind, right? But I go get a good deal of my car whether I’ll get a payment on time Whether the documentation transfer will take place or not. So as India’s used car business is quite new if not more than 10-15 years old so view and as We plan to capture the supply of used car We wanted to solve the seller side of the problem first and build our business over and above as we grow and scale So that’s what you’ll be doing right now And are more people in India now buying cars or is the liquidity gone up. Yes It’s easier to sell and buy than once so I would say like 10 15 years ago There was hardly any market for used car in India, like people who were just kept on owning the car what they had and Whenever they wanted to buy another car, they just want to they just go to the new car and get a new car Last 10 years has changed a lot. The market now of used car is 30% more than a new heart. Yeah. Yeah. Yeah, so There are more than 4 million used car currently being transacted in India how big is a car park how wicked sorry the car park like new car park new car is like 3.3 million and The used car is no place apart meaning how many cars are in India on the street on the street liberal like around I would say more than 20 million 20 million. Yeah, so I think in Europe it is Italy and Spain the average tenure is 7 years And in India, it would be then it has going down to no less than 5 years. It’s shorter. Yeah much shorter And there no richest included there Ok, let’s talk about the OEMs, they’re really funny I think first they were fighting about the electrical electric car and they’re very much focused and Porsche is one of our long-term partners and Division II and all these products are amazing But how are they going to cope with digital because correct me if I’m wrong you want to compare several brands? So in om who has new car sales online will always have a disadvantage to the ones who come On the other hand, they have the fancy video content, right? Our EMS for you Competitors or partners for your business. Maybe I I see them more as a partner actually, especially in Helping them develop a b2c channel Which they don’t have B to B to C a reselling channel like having direct customer relationships in the world of Amazon is something especially the banks and everyone is very focused on so Can you give customer data to the OEMs and their partners through that it’s not in our case We are not going that far because we love to keep our data for ourselves I think it’s more in the way We help them change the processes in the back end processes. These people don’t have a clear when it comes to retail They don’t have a clear view of what is a bit to see infrastructure They need to build on the digital space like the watch companies now They don’t own the distribution they have so this is where actually they appreciate our health And also when they look at the KPIs the inventory turns for example The margins we develop the technology we built in b2c pricing For example, this is something they don’t have and this is where the collaboration happens. Who’s your closest? Oh, yeah me work with we have many of them. I wouldn’t name, but you know talking about Germans Italians French Japanese we like our cars and James are we working with the OEMs? Yeah, there’s a big partner of ours So we we had diamond or invest in a couple of months ago for the reason they see that full Comparison between different makes models new versus nearly new finance types that’s gonna be a cool part of the buying experience forever There we work with them on marketing We’ve by very tactical marketing with data not personal identify data, but we have a huge map buying trends What cars people own what they’re switching to how they’re shopping Electric penetration except remove a lot of data and yeah, they need that they have no way to collect it. Yeah house 24 how was it in India work with the OEMs, so We see OEMs or partner as well but in a different way like cargo in problem has We saw like we are focusing on the solving the supply of used cars so our expertise in A used car over conversions are the highest in the industry So the way we partnered with the OEMs is that we help them improve their trading conversion. So they’re trading trading conversion So if so that they converge. Yes, so they can sell more new cars So we have partnered with a couple of volumes back in India where we are kind of running as trading setup for them So and we are providing all the support of the press not replacing the agents. You’re the dealers you’re working wisdom Yeah, but what’s your view? I mean a car dealer. It’s very interesting when you look at the underlying profit margin of that industry There’s not a lot of money left there. They can certainly not even build a website. I think the Yeah, the net income ratios like 1% is kind of is there a future for dealers are you going to replace Them. What what do you think? Is that a model of the past the car dealers the offline showrooms? New cars all depends on the manufacturer they want to sell three dealers phenomenally at the moment We know that most people still want to touch in their car If I really only want to go to one showroom to confirm their choice, but they still want to interact with well there It’s a favorite test drive, right? Are you offering that so we are platform and they kind of I still it’s still a big part of the buying For most people. Yeah, let’s talk a little bit about marketing opening up large markets Okay. Also, there’s all of online going on for a long time eBay Motors trader, etc But you raised I think both of you raised over a hundred million you raised thirty Younger company front you raised 170. What are you with that money is that You don’t take inventory. Resna you take inventory a little bit But what you have an amazing YouTube channel, they have 2.9 million YouTube subscribers What works marketing wise but watch out maybe start in India So the what’s your most? Kind of profitable marketing channel. Yeah, so in India that it’s like when we were when we’re at the early age, we were Leveraging digital play from a lot performance marketing to acquire customer and it was giving us a good ROI Because any seller who wants to say like I always look it up online right way to celica and it was pretty efficient for us But the challenge in India, it’s very unique In India right now. There are only 35 car owners in a thousand population The same I was if I – compared to us, it’s like more than 800 car owners in thousand population So finding a car seller In India is like a needle in haystack, right? It’s you don’t have any car seller So you have 40 million 20 million cars. You said out of how much population more than a billion a billion? Yeah Yeah, so it’s they don’t like cars so I think it’s more about the economy how the economy was set up now people are now people like Getting to take the income where they can buy cars more and more Coming more in the corner ship goes up or car ownership is going up big time. So People now consumers are getting with the bucket where they can actually afford a car earlier It was the issue of the can’t afford the car earlier. There was an issue about the cars were way too expensive It was built out of India and then the important all just cost too much money, but now cars are being built within India. So What was the best marketing channel together? So for me it is like TV TV because we can through a wider net I at the so much population and we can acquire customers but if first digital followed by TV money scale Well, the people who have a TV often probably also have have a car. Yeah in Italy. How are you doing? Beginning we have two different positionings on the used car Classifieds are very efficient However, they are not very scalable. So you might have advertised on autoscout Yes, it’s one of our nurses Critically, you come one step before exactly. So it’s one of the partners we’re working with on on cars of service Google is working, you know AdWords is working pretty well because we believe the the perception is more as Subscription service as opposed to buying a product and also the market from another time expected is newer So it’s like a green opportunity for us an overall television is also working. Well, and the The reason is if you if you look at advertising space on on TV You have a huge US loft allocated to OEMs and it’s pretty much about it in terms of automotive. You have nothing around Retailing and automotive and this is why you actually took that position And we are building a brand in that in that space the OEMs advertise what to buy and exactly advertise How to buy out exactly how is it in the UK mark? I mean similar AdWords is very clear to get the intent about someone to buy a car So that worked very well now direct word-of-mouth is by far the biggest majority Which great is free we have content. So YouTube as you mentioned written content YouTube is a very very big audience, but it’s a very global audience. So we only sell cars in the UK, Germany Spain It’s a good marketing channel. It’s not massive an organic search now with the written content is it’s very very big for us Let’s talk about the big platforms Its cars is one of the things none of them got right if eBay in the UK Got slapped by auto trader and the same happen in the u.s When Cox took over but then you had car guru coming in out of nowhere it so funny Are you thinking the industry is done? And then somebody else comes in and does it a little smarter, you know? I always have to disrupt yourself yourself Amazon is Obviously the largest retailer in the world Do you think they will enter the car space? Can they enter the car space? Are they becoming too powerful or maybe Facebook or maybe Google or who else but you have any big platform fear? Well Amazon has done You know a couple of tests and car services in several European countries The rumors I heard is it didn’t quite work the way they expected I think you know personally I am prudent and also on the look for what they are You know thinking about the category, of course, it is a risk they have huge You know customer base, you know huge data Database etc. So you have to look at them, you know prudently, however The automotive vertical is very much custom. The logistics wouldn’t work for them The user experience in buying a car or the payment systems when you have to manage a twenty thousand euro Transaction is not quite the same as the F. So there are also Specificities, for example, we just built a factory in northern Italy to refurbish thousands of dollars per month This is not something you invent You know overnight even if you are Amazon, so it’s very very vertical. Yes. What do you think James? Yeah, I think the most likely by far they have done tests in the rooms. We’ve heard it would stay I mean at some point, I think they didn’t do everything right? Yeah, they do it is a market place as they do with many things and I think new cars will be more likely than used because they can can they can have the quality control over as you saying Well, this search time is up. I want to say thank you very much. Thank you for being with us It’s one of those sectors I think where we have a lot of joy in the next many many years to come You think in ten years twenty thirty percent online car buying share more or less easily easier If we still have cars if you remember volocopter, they are flying you should you should add add taxes Wonderful. Thank you so much. Thank you guys You

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