Consumers Look For Convenience, Value, Transparency: Siddharth Agarwal, OLX Autos
According to a recent report by Praxis, the Indian used-car market was valued at US$18 billion in FY21 and is projected to grow at a CAGR of 15% for the period FY '21-‘26.
At present, the Indian used-car market is highly fragmented with around 80 per cent of it being controlled by the unorganised market. "However, consumer preferences are rapidly shifting towards solutions that provide more convenience, better value and are more transparent," shares Siddharth Agarwal, Country Marketing Head, OLX Autos.
In a quick confab with him, he furthers describes how preference for online services has skyrocketed, and this holds true even for buying and selling pre-owned cars. Edited excerpts:
Q. Given your experience and expertise, what are share some of the dominant traits of the used-car market, especially in a diverse market like India?
The per capita car ownership in India is still among the lowest in the world. Therefore, owning a vehicle is an aspiration for most Indians. This gap will continue to fuel the demand for cars in India for the coming few years, which in turn will result in significant growth for the used-car industry as well.
Subscription-based pre-owned car leasing, aided by rising motorisation rates, shorter replacement cycles, and the increased penetration of pre-owned car financing options, is a dominant trait that will shape the future of the sector.
Q. OLX Autos has been active with its marketing initiatives over the years. Could you take us through your communication strategy and recent initiatives/ collaborations?
Buying and selling in the used-car industry continue to be dominated by traditional offline dealers where price discovery and transparency are major pain points faced by the end consumer. To solve this challenge, OLX Autos is building upon its proposition of unlocking the ‘best price’ for its consumers, through our ongoing brand campaign ‘Price Nahi, Surprise Milega’ focused on assuring consumers (car-sellers) with our promise of delivering the best price and great experience every time.
We have partnered with Star Sports, the IPL broadcaster, and leveraged the fall of wickets and DRS (Decision Review System) features that showcased the brand in a contextual manner. The campaign focused on its core brand positioning that the platform always provides the best price for a used car - leveraged through a multi-channel approach (digital, radio, over-the-top (OTT) platforms, and television).
To further amplify our “Best Price” proposition, we have recently launched our first celebrity-led campaign ‘Shetty Ke Car-Naame’, featuring Rohit Shetty and Sharman Joshi. This campaign is a humorous take on the common trope found in Shetty’s films and this is being promoted across various social, digital and OTT platforms to reach a wider spectrum of our audience.
As a brand, we aim to drive higher engagement through our communication by being relatable to the challenges consumers face in their daily lives.
Q. How do you see the future of online automobile buying and selling vs physical stores?
Phygital (Physical + digital) is the way of the future. With the pandemic, we've seen a change in consumer behavior. Consumers now prefer to have their cars inspected and picked up from the comfort of their homes when it comes to selling their cars.
In the used-car market, this shift in consumer behaviour will force brands to use their retail footprint to build their credentials by showcasing their cutting-edge solutions to their target consumers and establishing brand authority.
Q. How are you steering OLX Autos' next phase of growth in the pre-owned automobile space?
In 2021, the pre-owned industry saw a growth in terms of pent-up consumer demand only to be met by supply constraints. At OLX, we saw more than 100% growth in the SUV category alone in the last 6 months (Dec'21-May'22) when compared Jun'21-Nov'21. This is largely due to our marketing initiatives that have been crucial in helping us build new categories, and develop a differentiated brand identity.
As more and more Indian consumers are shifting their preferences to pre-owned vehicles, OLX Autos is positioning itself as a one-stop destination for anyone that wants to sell or buy pre-owned cars. Additionally, we are also catering to traditional dealers to help them grow with a wide variety of services and products that we will announce in due course this year.
Q. As per a recent report, the pre-owned car market continues to outstrip new car market sales. How do you expect the future to unfold for the industry? What key trends are expected to float?
Some of the key trends we will see include:
The pre-owned car market will see steady growth with the pre-owned car to new car ratio being projected to grow from 1:1.4 for FY21 to 1:2 by FY26
New buying channels such as new car dealer trade-ins or pre-owned car dealer trade-ins may emerge as an alternative for consumers
State-level regulations, as well as regulatory changes such as BS-VI emission norms and scrappage policies will aid the demand growth for players in the sector
Share of pre-owned car tech players in C2B wholesale auctions might grow from 5 per cent to 26 per cent by FY26, while the share of pre-owned car tech players in B2C inventory retail might grow from 2 per cent to 22 per cent by FY26, says a recent report by Praxis
