This Malaysian Start-up Can Sell Your Car in 24 Hours
Scaling the offline inspection process
PHOTO CREDIT: Getty Images
When it comes to selling used cars online, there has been little deviation from the most common listing model: A seller posts details of their vehicle and then waits to field offers from interested buyers.
Carsome is a complete re-envisioning of how cars are typically sold online. According to Carsome co-founder and CEO Eric Cheng, their platform’s user journey begins with the seller getting a valuation of their car in under two minutes.
“Sellers then take their cars to Carsome’s inspection center for a full inspection. Subsequently, the car enters an online auction with 1,000+ dealerships to determine the best competitive price. Sellers will then accept the best offer and get paid immediately,” he says, adding later, “Essentially, we offer a platform that connects both sellers and dealers in a transparent online auction system.”
Carsome originally began as a price comparison platform for vehicles, but pivoted into its current model when the team realized that there was a need for greater transparency in the used car market space.
Carsome’s service is free for sellers — the company gets paid a fee from dealers for every car they successfully win through auction. According to Cheng, the most difficult part of this business model is the offline component — the physical inspection of vehicles. These are crucial for both sides of the marketplace. Consumers ought to know the status of their vehicles and dealers should as well so that they can bid with confidence during the auction process.
Since Carsome is a platform, developing the inspection process was easier said than done.
“Creating the inspection methodology took us few months as well as implementing it at scale and creating repeatability in inspection quality was a huge challenge. We have invested our resources into hiring experienced inspectors who would embrace our technological solutions to the offline used-car market and that helps us speed up the used car distribution while maintaining high quality in inspection,” Cheng says.
Selling to dealers versus selling to direct buyers
Despite this challenge, Carsome is gaining traction. Expanding from its home base in Malaysia, the platform is now also available in Singapore, Thailand, and Indonesia. From 2015 to 2016, the company grew tenfold, selling more than 2,000 cars and was profitable on every transaction. Consumers can transact on Carsome through its web and mobile platform.
Perhaps, Carsome’s most impressive feat is getting many dealers in an old-fashioned industry to participate. Cheng admits, “We also onboarded 1,000 used-car dealers in our network which is not easy considering the old-fashioned and change-averse industry.”
If change is anathema to car dealers, sellers come with their own unique challenges for a platform like Carsome. Cheng says that there are two broad groups of sellers — one who is willing to sell to used-car dealers and another who is only willing to sell to end users. The sale price of the former will be lower than the latter — a fact that Carsome has to make the public aware.
“Education is key — we’re doing it not only via our ads, but also on the customer service side when they call the customers up, as well as on inspectors’ side when the customers come for inspection. It takes time to educate the public, but we’re getting there,” Cheng says.
Of course, the trade-off for a lower sale price is speed. And Carsome emphasizes the fact that you can sell your vehicle in 24 hours. Cheng believes Carsome has gained a leadership position in the used-car market; he wants to solidify the company’s lead by rolling out to more cities.
“We want to make the market transparent and be a real price indicator for the used-car industry. Many cities in this market face similar issues in selling their cars; we believe Carsome could benefit more customers by offering the fastest and easiest way to sell their cars,” he says.