Used Car Buyers Are Looking at Same Purchase Experience as New Car Buyers
The used car buying space has been on an upward spiral year-on-year, especially after the pandemic where it has been witnessing a 14-15 percent growth. There are two things primarily driving this growth – one is the ever-increasing prices of new cars and the second is the growing demand for personal mobility itself, where cars are about more than just transportation, and are an extension of safety and well-being for the family.
Spinny, of course, has emerged as one of the major players in the used car buying space and speaking to Autocar India, Niraj Singh, Founder and CEO of Spinny said, “When we started to operate in this category, we saw that there were many players, but we realised that not all players are respecting the kind of emotions you have while buying your new car wholeheartedly. So, we realised there is a clear room; our reason to operate in this category is to respect that emotion and try our best to solve that.”
Owning To Maintain Quality
What sets Spinny apart from other aggregators of pre-owned cars is that the company owns its own inventory, which they claim gives them greater control over quality, transparency and accountability. “If you’re not owning the value chain, you cannot control the quality, you cannot take accountability of what you’re delivering to your customers,” said Singh.
The company resorted to a full-stack model from the beginning of 2017, prior to which they were operating on a managed marketplace model since their inception in mid-2015. A full-stack model essentially means that the company buys vehicles from sellers, manages its own inventory and sells directly to the end customer, thereby owning the entire value chain.
“If the demand is strong and if it is going to remain that strong, then having a full-stack model is not risky. But at the same time, we have insanely strong integration of tech, data science and analytics in everything we do. So, every decision making is powered by our tech. This, in a way, ensures that we are scaling the business without taking unnecessary risks,” said Singh.
Showroom Experience Important For Used Car Buyers
An interesting trend that has been observed in the used car market is the blurring lines between a potential new car buyer and a used car buyer. “A car buyer is a car buyer,” said Singh, where a customer is essentially looking at the best product available within their budget and one that suits their requirements. However, the aspirational value of a car in India still remains the same, and customers are also looking forward to a better buying experience.
This is yet another area where Spinny is trying to create a niche with a showroom-like experience by offering customers the convenience of walking in and making a purchase from the expansive line-up of cars on display.
Singh elaborated on this saying, “If they’re buying a car, it’s a very aspirational and special purchase for anyone. We built this platform for people to buy second hand cars with the same confidence with which they would have purchased a new car. At the same time, the end-to-end buying experience can be far better.”
Supply: A Greater Challenge than Demand
Singh also highlighted the fact that there exists a huge gap between the demand and supply. The sellers are always looking to maximise the price they will get and will, therefore, look at multiple prospective buyers. Meanwhile, on the demand side, it’s not about just getting the best possible deal, but also the right car, which means customers will also look into factors such as quality, safety and accountability.
Sourcing a seller, therefore, becomes more difficult than getting a buyer. Singh says there are three things that need to be catered to for a seller. “One is the pricing, which needs to be most competitive. Then comes speed and convenience. Because of our model, we are able to offer a very competitive price. Second, in our system, for sellers, everything is a door-step service. So, it is as convenient as it can be and it is very quick; if you want, you can sell your car the very same day.”
For a seller, one needs to submit a few basic details of the car on Spinny’s online platform, after which they will be given a ballpark car valuation figure. If the seller is comfortable with that range, Spinny will carry out an inspection of the car on the same day at the seller’s doorstep. This will be followed by a final quote. If accepted, Spinny will make the payment and collect the car then and there. In this way, sellers can sell car online from the comfort of their homes.
Spinny’s Expansion Plans
Spinny currently operates in 15 cities, and in the short term, the company is looking to go deeper into its existing markets than adding new markets. The company started with four cities – Delhi NCR, Bengaluru, Hyderabad and Pune – and in each of these four cities, it currently has a market share of 5-10 percent. Four more cities were added in 2021 – Mumbai, Chennai, Ahmedabad and Kolkata – where they are currently operating with about 3.5-4 percent market share. The company also expanded in seven more smaller cities in 2022.
“At the moment, we just want to keep going deeper in our existing 15 cities and the idea is to have a minimum market share of 8-9 percent in each of these cities first, and then we will start thinking about other markets,” said Singh.
Speaking of the used car market itself, with a growth rate of 14-15 percent a year, it’s expected that the used car market will double in the next 4-5 years’ time. At the same time, the organised sector, which currently stands at 20 percent, is also expected to double to about 40 percent in the same time period. Singh believes that the future of the used car market is very bright as it will continue on a growth trajectory together with the new car market. “If you are a believer of the Indian economy, the new car market and used car market, both will grow like anything,” added Singh.
To further increase the car buying experience in India, Spinny provides information about popular cars in detail. Whether one wants to buy an SUV such as the Mahindra XUV700, or a sedan like the New Maruti Dzire, the platform provides an overview of the latest models in the market, including the latest prices, variants, features, and reviews. So, for instance, if one wants to research about the recently launched Hyundai Creta, Spinny has all the information covered. This helps buyers understand the features, specifications, and prices of different cars and make informed decisions based on their needs and preferences.