After used car sales, Droom set to drive into new vehicle segment; eyes foreign markets

Droom, the online marketplace for used automobiles started by Shopclues founder Sandeep Aggarwal, is set to launch new vehicle category by September this year. The company, which has set an annualised GMV target of R3,500 crore for FY 17, also plans to expand its presence in South-East Asian countries by November this year.

Speaking to FE, Sandeep Aggarwal, founder of Droom Technologies said, “So far, we are operating only in the used-vehicle category and have become the largest online automobile marketplace. We will be introducing the new-vehicle category shortly (by September) and will have tie-ups with the manufacturers and dealers.”

“However, our focus will remain in the used-vehicle category and we do not expect the new-vehicle segment to overtake our existing business. The margins are infact higher for used-vehicle category, wherein, the commission goes up to 12%. in the new-vehicle category, it is just about 3%,” Aggarwal said.

Droom offers B2B, B2C and C2C marketplace option with fixed price, auctions and best offer selling formats. Last month, the company secured $200 million in funding led by Singapore-based investor Beenext and Japanese incubator and venture capital firm Digital Garage. The company had earlier raised $16 million in 2015 from Lightbox Ventures.

According to the company, the funds raised will be used to strengthen its technology and for overseas operations. In FY15, the company posted revenues of R93 lakh and loss of R2.2 crore. The company says it recorded R800 crore as GMV at the end of March 2016.

“We have double our business until April. In May we touched R80 crore in revenues. We are well ahead of our target and 25% of the funds raised will be earmarked for international expansion. By November we will start with Indonesia and further expand to Malaysia, Singapore, Vietnam and Thailand,” Aggarwal said.

The USP of Droom is the luxury car sales, which, the company says is growing faster than all other categories. The company also lists choppers and flight on its platform for sale and rentals.

“Luxury car segment is shaping up very well. At least we have registered R100 crore worth of business in this segment. While, no one has purchased planes on our platform yet, we have two dozen plane rentals and the demand comes from rich families, political parties and corporates in Delhi, Ahmedabad, Mumbai and Bengaluru,” Aggarwal said.

Last year around 3.5 million used cars were sold in India and a recent Crisil study has forecast that the sales of used cars will reach around 8 million units by 2020. The used car market is growing at 20-22% CAGR and the market is currently valued at $15 billion.

Source: Financial Express