Most sold brands on our platform are Maruti Suzuki, Hyundai & Honda: OLX CMC's Bhaskar Bagchi

NEW DELHI: There’s a slump in new cars sales but pre-owned car market is witnessing brisk sales. Bhaskar Bagchi (BB), General Manager, OLX CashMyCar (CMC) says, “While the new-car market witnessed a muted single-digit growth in FY18-19, the market for pre-owned cars grew at an impressive rate of 15%.” In an e-mail interview with ET, Bagchi discusses the OLX CMC model, the value proposition it offers to sellers and more. Edited excerpts:

ET: What value proposition does OLX offer to a seller or a buyer? Why should consumers come on OLX when there are dedicated platforms to sell cars.

BB: The unorganized pre-owned car market still thrives in India. With OLX CashMyCar (CMC), we are determined to organize this segment while offering a higher level of comfort to users to sell their car offline without compromising on their need for immediate payment. Our deep understanding of the pre-owned automotive ecosystem has translated to an industry leading experience for users in terms of selling pre-owned cars in a secure and transparent manner.

In less than a year of launching OLX CMC, we have reached 17 cities across India, with plans to hit 150 centres in 40 Indian cities by 2021.


What percentage of OLX India business comes from the auto sector. On average how many people buy cars from OLX every month?

BB: Auto is the largest category for OLX in India and generates 45% of the revenue for OLX India. Since January this year, OLX CMC has engaged one million users via its website, stores and call centres. OLX CMC has also witnessed a growth of 10% month-on-month in terms of cars being brought on the platform.

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ET: Do you also do due diligence; valuation; inspection of the cars? If not, how can a customer trust what’s advertised?

BB: As part of the selling process when our customer provides certain details of her car on our website, we provide her with a price range upfront, so that she knows what to expect during her CMC store visit. Post that when she is at our store, our customer care associates explain the process to her. The process starts with inspection of the car done by experts from the industry, and the customer is encouraged to observe the same closely. An inspection report, dozens of detailed photos and videos are created and shared with our channel partners on our proprietary auction platform. Typically, in about half an hour, multiple channel partners participate in this auction and bid for this vehicle, enabling the car seller to get a quote for her car. This process and price too, is shared with the customer.

Once our customer accepts the price offered, we take care of the paperwork, following which payment is made to the customer. The process happens in real time and the customer is updated every step of the way to remove any ambiguity.

ET: What’s your strategy to grow the auto vertical?

BB: In the past year CMC has grown to 75 stores across 17 cities. We plan to continue our expansion to 150 centres across 40 cities by 2021. We will also add products and services over the next few months and years, which address needs in the Indian used car ecosystem.

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We recently launched a national marketing campaign in order to build consumer awareness. We are also conducting on ground campaigns across cities.

ET: How does the model work?

BB: OLX has two business models in the pre-owned automobile space in India. The online vertical called OLX Auto is a pure play C2C classifieds listing platform where OLX doesn’t intervene in the buying or selling process.

In the offline space, OLX CashMyCar sources pre-owned cars from sellers and then auctions it to channel partners. Given our decade old presence in India, and the data generated on OLX every day, we have been able to develop an understanding of consumer behaviour.

The pre-owned car market mirrors the new car market in many ways. The top selling models in the new car market end up being the most sold/bought models in the pre-owned car market as well, hence the three most sold brands to OLX CMC are Maruti Suzuki, Hyundai and Honda. Understanding market trends, consumer behaviour and with data analytics from our offline presence, we are able to understand which models are most popular with the users.

ET: There’s a slump in new car sales. What’s attracting buyers to used cars?

BB: While the new-car market witnessed a muted single-digit growth in FY18-19, the market for pre-owned cars grew at an impressive rate of 15%. During any economic slump, consumers reduce their discretionary spends, in order to minimise their expenses. Pre-owned goods surge in popularity whenever there is an economic slowdown since users tend to scout for deals.

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Growth in the market for pre-owned cars is a testament to the same since pre-owned cars are at least 20%-30% cheaper than new cars of the same make and model. We have noticed that the demand in the pre-owned car market far outstrips the supply. For sellers who sell their cars on OLX CashMyCar, instant payment is a very attractive proposition while for channel partners, the regular supply of the pre-owned cars enables them to address the unmet demands of users looking to buy such cars.



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