USED-car platform Carsome is increasingly building out the different verticals on its site to further support the different stakeholders in the used car market.

       More than just offering a marketplace to transact used cars, co-founder and group chief executive officer Eric Cheng notes that the startup will also be scaling up its financing and insurance offerings to the other markets that it is in, namely, Thailand, Indonesia and Singapore, as it looks to capture more of the US$55bil (RM231.69bil) market in the region.

       “There is a lot of opportunity for us to innovate (in the industry). We are talking about financing, insurance, warranty, after-sales service and everything associated with every transaction that happens in the industry. We see this as not just a huge market, but it is also an opportunity for us to provide people with mobility in this region.

       “We started offering financing to our customers, consumers and dealers, about three years ago in Malaysia. So we’ve built that part and built an understanding of credit (assessment) when it comes to screening our own customers. So now we are planning to scale this up to the other countries we are in,” he says at the recent MIDF Conversations series.

       Notably, financial institutions typically offer loan products that cater to new car sales. This means that there is a very big underserved category of consumers who may have the capability to buy a car but do not have access to the products that would enable them to own one.

       Carsome

       According to Cheng, Carsome currently has less than 10% market share in the region, given that the rest of the market is largely still offline.

       “People are not happy with the experience (of buying a used car now). They are going to want a better experience, a better offer. So that’s why we think we have a very strong chance to capture that remaining 90%.

       “We are at the forefront of the used car market (with digital).

       “As much as we are a technology company, we think about what customers actually want from us, what they are looking for when it comes to the experience in the industry. That’s why instead of looking at ourself as a tech company, we look at us more as a consumer-centric company,” he adds.

       Carsome is looking at a potential listing in the US next year, possibly via a merger with a special purpose acquisition company. It has been reported that it is seeking a valuation of about US$2bil (8.42bil), which would make it Malaysia’s first unicorn.

       In line with industry trends and following incentives from the government, the platform is also looking to expand its selection in electric vehicles (EV). It currently has some Tesla models on its site.

       StarCarSifu

       Cheng, 36, points out that EVs are growing in significance in markets like the US, Europe and China and recent developments locally also indicate potential growth here.

       In Malaysia, the government has proposed to provide full exemptions on import and excise duties and sales tax, as well as road tax (up to 100%) for EVs under Budget 2022.

       Apart from that, he notes that car brands and manufacturers are also increasingly trying out new ways to sell their cars. Given that Carsome attracts sizeable traffic, Cheng says it has been approached to find a viable way for them to leverage the platform.

       “We have seen how the car industry picked up in the last few months. Throughout the pandemic, we see car ownership appreciated more than before. We are breaking records on a month to month basis. We think this will continue to be true in 2022, barring any further disruption.

       “About 80% of the Asean population are of driving age. But car ownership is not there yet. So we see a really big potential there, especially with the rising middle class and car ownership being appreciated more in the market because of Covid,” he shares.

       In an earlier consumer survey it carried out in its core markets, the company found that 79% of Malaysians, 74% of Indonesians and 55% of Thais were not comfortable sharing a car ride with strangers or using public transport.

       This will ensure continued demand for private vehicles.

       Correspondingly, Carsome hopes to build out its inventory of cars from over 1,000 currently to about 2,000-3,000 units over the next two quarters.

       While this may require a stronger balance sheet on the part of the company, Cheng says the company has been able to leverage its data to optimise its efficiency and conversion so far, enabling it to expand aggressively despite not raising large amounts of funding in the first five years of its operations.

       In September, the startup said it raised US$170mil (RM716.12mil) in a series D2 round at a US$1.3bil (RM5.48bil) valuation.

       Cheng adds that it is also looking to enlarge the portion of its balance sheet that is funded through debt rather than equity.