Can Cars24 take on Carro, Carsome in SEA?

Cars24, the India-based marketplace for used vehicles, recently launched operations in Thailand and Indonesia.

Team Cars24 Thailand during their launch event in Thailand / Photo credit: Cars24

Flush with nearly US$850 million in funds, the unicorn is also looking to drive into Malaysia this year.

Cars24 has earmarked over US$100 million to help it expand into international markets, including Southeast Asia, Abhijeet Dabas, CEO of Cars24 Southeast Asia, tells Tech in Asia.

But can the new entrant make a mark in a region dominated by local players Carro and Carsome?

Will Cars24 turn on the heat in SEA?

Theoretically, Cars24 can take on Carsome and Carro since the Indian firm is first targeting Thailand, where both incumbents are relatively small, Jianggan Li, founder and CEO of Momentum Works, tells Tech in Asia.

Overall, the used-car market in Southeast Asia is worth US$60 billion and is largely driven by physical roadside dealerships, which account for nearly 70% of used-car transactions in the region, says Dabas of Cars24.

Together, Carro and Carsome had captured less than 5% of the pre-owned cars market in Malaysia, Thailand, and Indonesia by the end 2021, according to Momentum Works.

Photo credit: Cars24

The region’s market is also known for its appetite for cars, early adoption of tech, and strong internet penetration. A Momentum Works’ report notes that the region’s car ownership rate stood at 86 cars for every 1,000 people, with a compound annual growth rate of 5% over the past 10 years.

Overall sales of used cars in Southeast Asia are beginning to speed up faster than sales of new cars – this translates into a big untapped market opportunity for Cars24.

Noticing the trend, investors have been pouring millions of dollars into the used-car sector. While Carro raised US$360 million in a series C funding round led by SoftBank last July, Malaysia’s Carsome raised US$290 million in January to fund expansion plans in Southeast Asia. Vietnam’s Touchstone Partners invested US$1 million into used-car marketplace Bave at the beginning of March.

MyTukar, another Malaysian used-car platform partnered with Daihatsu (Malaysia) to improve the former’s selling process.

Different gears, same approach