Rocket Internet-backed online car classifieds startup Carmudi has recently raised $10 million in funding, led by Tengelmann Ventures, with the bulk of the money going to the Philippines and Indonesia to further growth of the brand.
Carmudi enables users to buy new and used cars and motorcycles. In the Philippines, companies that offer similar services include OLX.ph, AutoDeal.com.ph and other automotive classifieds platforms. However, the emerging markets-focused startup does not see its rivals as direct competition.
“Like in any industry, competition should always be seen as another party to challenge you to be the best of whatever field you are in. While we don’t have direct competitors, we are always on our toes to always deliver the best technology and service to all our users,” Carmudi Philippines managing director Cholo Syquia told DEALSTREETASIA.
In an interaction, Syquia tells this portal about Carmudi’s plans for the Philippines, the startup’s milestones last year, and how the new tax law in the country could affect car sales in the futures.
How did Carmudi Philippines perform last year?
We have seen double-digit growth both in our listings count and our revenue last year. Monthly online visits have been in the millions for the longest time and we continue to focus our efforts on increasing this. We have strengthened our national presence through more relationships and business via our Cebu office and the set-up of our Davao presence.
We also revamped our journal pages, now called Insider. With this, the platform also provides information on vehicles and anything related to the automotive industry, which can serve as a reference for end users.
Carmudi Philippines is getting bulk of the US$10m worth of new funding that your parent company raised. Where would you use these fresh funds?
The funding will be used to further Carmudi operations in Asia, with both the Philippines and Indonesia as the focus to grow the Carmudi Brand. For the Philippine operations, we will use this to increase our market penetration and expand our brand visibility and awareness with a focus on online marketing campaigns.
New business segments that will enhance our position as an online car platform are also being developed and will be deployed accordingly, both on the tech development side as well as the operations. We are also strengthening our position in other key cities outside Metro Manila as well.
What are your short-term and long-term expansion/investment plans in the Philippines?
Investing in our product development is a key priority as this is a continuous effort to localize and provide what the market (both clients and buyers) need. Our goal is to always have the latest technology available in our platform.
We would also increase our marketing and brand awareness campaigns nationwide. The focus would be to key cities outside Metro Manila. While we are an online platform, we still believe that offline presence should not be left out.
What are the growth driver and the challenges in terms of selling cars in the Philippines?
The continued economic growth of the country has boiled down to people having more buying capacity. We believe this is a factor to the continued growth of the industry coupled with the car dealerships’ accessible pricing schemes and promos that are very attractive as well as financing options offered by the different banks.
The aspiration of car ownership still plays a very big factor in the purchase of vehicles including the very low but growing motorization rate of the Philippines at 35 per 1,000 people compared to its neighbours in the region.
For the challenges: First among them is the availability and accessibility of units for sale. We have seen orders on wait-list for supply. This is where Carmudi comes in. We help buyers find the best available price options as well as which dealerships have the units on hand.
On the used car segment, the common prevailing issue is car quality and legitimacy. Carmudi, in its efforts to maintain its brand for quality, has been strengthening our Inspection Service. Through this 200-point vehicle check service, buyers are able to ascertain the status of the car they are interested in.
The Philippine government has recently introduced a new tax law, do you think this will affect the purchasing behaviour of Filipinos starting this year? Do you see this as a major concern?
For now, as we are still in the early stages of the effect of the new tax law, we have not seen any trends on how this has affected the purchasing behaviour of our users. Potentially though, there might be a shift in the interest from one vehicle type to another based on the effective price of the different cars. Buyer’s budget would, of course, be a major factor as well as the increase in the price of fuel. Thus, giving fuel-efficient cars an advantage.
The Build, Build, Build Program (massive infrastructure development program) of the government, which will be financed partly by the new tax law, is expected to create more employment for the people. Thus, increasing the buying capacity which will further enhance the people’s aspiration to owning a vehicle.
How do you see the future of Carmudi Philippines?
We will see Carmudi as the primary automotive online platform. We envision CARMUDI to be synonymous with all things automotive online. May it be buying your new car (both new and used), selling your existing one, to reading everything automotive related and everything in between.