CarDekho’s plans to go slow and steady comes with strong expansion plans and revenue targets
After joining the unicorn club in October, 2021, used cars retaileris treading lightly on the markets with plans of expansion and ambitious growth targets. Founded in 2008, CarDekho is a prominent car retailing platform that has several different business arms that are soaring in the market.
Amidst a wave of companies hitting the public markets, CarDekho believes in winning the race by going slow and steady. In this context, Anurag Jain, Co-founder, CarDekho Group, explains that an IPO is definitely something that CarDekho is eyeing in the next 12-18 months but the automotive unicorn is in no rush to go down that path immediately. “The market is hot right now and a lot of people are rushing to go the IPO way, but we want to be stable with our things when we hit the shores,” he says.
According to Anurag, used cars have been a forerunner for the growth of vehicle sales in India. “From a global comparison, India is just about close to 20-21cars per thousand people, as compared to developed economies where the number goes as high as 600-650,” he says. Thus, there is a huge headroom for growth in the market.
The pandemic has contributed to accelerating this growth in the used cars space as people realised the importance of having personal vehicles, he shares. Not everybody has the capacity to buy a new car, and used-cars are readily available in the market, thus naturally there was a surge in demand. However, trust is a factor that was lacking and CarDekho has been consistently trying to solve that problem, he adds.
Speaking about demand, Anurag shares bigger cities naturally drive larger volumes of demand. Among them, Delhi and Mumbai are frontrunners. In the used cars markets, already existing cars are being resold, thus in India, cars that were sold 4-5 years ago are the ones coming in for reselling in the market. “It’s kind of an inferred market, not like a market which you can create,” he says.
According to him, CarDekho is structurally very unique and the brand has a very successful New Auto business, which is the top in the country, and also an insurance business called InsuranceDekho. Apart from that, almost 17-18 banks have tied up with the company and several banks have invested in it as well. “The most exciting business that we are looking at is the used cars business,” says Anurag. Most of the fundraise that the company has done will go into building up that particular business.
“We are doing an ecosystem play where each business is basically assisting the other business in terms of either customer acquisition or doing some value-add from the customer’s perspective,” says Anurag.
Commenting on the revenue, Anurag shares CarDekho is currently on a run rate of more than Rs 1000 crore in terms of commissions. The company’s plan is to grow as fast as possible.
Lastly, Anurag concludes by saying that with the recent $235 million fundraise, the company is sufficiently capitalised as of now and further fundraise will depend on how they are scaling. However, the company is now opening CarDekho Malls which is a large store format with used cars retail showrooms which will provide a hugely differentiated experience to the customers. “This store format we have started doing in Jaipur and NCR and we are going to expand this to 18-20 cities in the coming year,” he says.