Carro’s founder and CEO Aaron Tan, meanwhile, said China shows that one needs to expect “consumption to be gradual”.
“One of the large Chinese players told me that they are tracking at about 50% of what they were doing last March and expect the end of 2020 to be about 70-80% of last year’s figures. So, we should cash up (count our cash) and try to lower the burn as much as we can,” he said.
Struck by Covid-19
On 24 March, Uxin sold its B2B used car online auction business to its existing investor and Chinese classified platform 58.com for US$105 in cash. As of 15 May, Uxin’s market cap stood at US$399.4 million and closed at US$1.45, a far cry from its Nasdaq debut of US$9 per share.
The Chinese market is also home to two veteran used car trading platforms Uxin and Chehaoduo. Founded in 2011, Uxin was the first Chinese used car trading platform to have gone public on Nasdaq in June 2018. It competes directly with SoftBank-backed Chehaoduo’s C2C used car trading platform Guazi, which came into the market around 2014.
Both players, however, have resorted to slash salaries in March in order to tighten budget and cash flow.
According to Jianggan Li, founder and CEO of Momentum Works, compared to the Chinese startups, the Southeast Asian players have got off to a right start by pursuing a C2B or consumer-to-business route.
An Indonesian contender
C2B is probably the best entry point for players to capture market and data without burning too much cash, Momentum Works’ Li says. Most importantly, it helps consumers to solve the problem of cutting out the many middlemen through a transparent process when they sell their used cars.
“The inspection and pricing data collected during the C2B process will be very useful for not only the participants of the trade, but also providers of ancillary services including financing, warranties and insurance,” he told us.
C2B used car trading platforms like Carsome, Carro, and Indonesian BeliMobilGue take a commission from used car dealers for each transaction they process. Customers don’t need to pay a dime to sell.
But the strategies of each of these three companies are vastly different. With the exception of BeliMobilGue that has yet to venture out of its home ground, both Carro and Carsome are present in Singapore, Malaysia, Thailand and Indonesia.
The duo also claim to have been placed well on the profitability meter prior to Covid. “…assuming there is no second wave [of infections], we will be able to continue that momentum and achieve the same as things go back to normalcy,” says Carsome’s Cheng.
BeliMobilGue, meanwhile, sold over 21,000 used cars in 2019—almost half of the 55,000 used cars transacted via Carsome across four markets—as per a report by Singapore-based venture builder and consultancy Momentum Works. Carro declined to share figures.
It is not wrong to say that the Indonesian company is the fastest-growing one in the used car space, and that’s just in one market. But there’s competition in the offing. Enter TiinTiin.
New beginnings
Monteiro stepped down as CEO of BeliMobilGue last July and has also resigned from the startup’s board in mid-March. The startup was a joint venture between Monteiro, Berlin-based used car marketplace builder Frontier Car Group, and Indonesian venture builder Intudo Ventures. Monteiro no longer owns a stake in the business.
Founded by the co-founder and former CEO of BeliMobilGue, Rolf Monteiro, TiinTiin launched in late-2019. He declined to share any performance numbers but said the figures “will be modest compared to any like-minded numbers”.