Carmudi is one of Pakistan’s leading international online portal of car sales and purchase. In an exclusive interview to IBEX, Managing Director of Carmudi Pakistan, Raja Murad Khan explains about the operations of Carmudi Pakistan.
Please tell us about your professional background?
I am a part of a number of family owned businesses which I look after in various capacities. I have previously worked in the private education sector where I rolled out approximately 200 branches nationwide, equipping them with modern educational technology tools.
Tell us about Carmudi, its history and current operations in Pakistan?
Carmudi is an online vehicle marketplace that offers buyers, sellers and car dealers an ideal platform to find cars, motorcycles and commercial vehicles. We have a webpage as well as a smartphone app, which is available on the app store for iOS and google play for android devices. We initiated Carmudi in Pakistan in early 2014 and expanded rapidly despite stiff competition and quickly established in 8 cities.
Apart from buying and selling, what other options are available on Carmudi for users?
The portal gives its business partners the opportunity to use it as a platform for effective advertising, owing to the significant number of website users. A lot of people use Carmudi for research and we provide useful information. Carmudi has partnered with Banks and insurance companies as well as other service providers to get services to the end consumers seamlessly.
Can you share number of transactions or sale/purchase annual figures on Carmudi?
Carmudi Pakistan has around 35 thousand active listings verified and checked by our ground teams at any given time. However, this number fluctuates on a seasonal basis.
It is not practically possible for us to track the actual number of transactions since we are a market place providing a platform to advertise your vehicle.
We can however say that we provide an average of 8 good leads per new listing, the number is higher for featured listings and drops once the listing becomes older and moves down in the search results.
Who are your direct and indirect competitors?
There are one or two local companies who are working on a similar business model, however, Carmudi has a global network, which sets us apart from the others in the market, given that we are operating in 20 countries across Asia, Africa and Latin America.
What is your opinion about the e-commerce market of Pakistan? What are the challenges?
In the larger scheme of things, the e-commerce space is still very young but the culture seems to be developing at a good pace. I believe, as companies mature they will feel a number of operational challenges including payment and logistical issues. However, these issues will eventually sort themselves out.
There are a large number of new ventures coming in to occupy this space and medium, though in the long run, I believe, only a handful of the best ones will survive. The industry will eventually see consolidation and hence some mergers.
Consumer trust is gradually developing and I think at present the “CoD” model is a good way around the lack of feasible payment solutions.
How do you compare Pakistan’s automobile industry with developed markets in terms of volume, price and options?
The automotive industry of Pakistan has grown considerably in the past few years, with socio-economic factors becoming increasingly favorable for the said growth. However, it still lags behind the international market in terms of volume and options. In the region alone, there are more flourishing markets around us. For example, in 2009, India emerged as the fourth largest exporter of passenger cars with Japan, South Korea, and Thailand being the respective leaders in the region. However, in 2010 India surpassed Thailand and secured third position, becoming home to 40 million passenger vehicles.
How do you see the increase of sale of imported vehicles? Is it because of less local options?
Fewer options available by the local manufacturers is definitely one of the major factors why public seems more inclined towards imported vehicles. But part of the problem also remains in the fact that local products are not mostly equipped with the latest technology which marks the success of imported cars. According to statistics, as of year 2014 the total number of models produced by Pak Suzuki, Indus motors, and Honda Atlas was eleven whereas, in India, Honda Atlas alone was able to produce 17 products the same year. This is a huge difference. Reports suggest that Pakistan is utilizing only 50 percent of its total capacity. Therefore, I believe, in order to depend less on our imports, we need to increase our production levels as well as start incorporating modern technology in our domestically produced vehicles.
What is the market share of Carmudi in the e-commerce industry in automobile segment?
We have established ourselves on the number 2 slot in the industry and are striving to make it the best option available.
10. How do you see the government policies for automobile sector? What are your suggestions?
As of now there are three major manufacturers in the market that are producing consumer grade four wheel vehicles. Carmudi found out that the market trend is showing an increasing demand for more vehicles owing to a number of factors, such as an increase in per capita income. At present, there is a gap between demand and supply that is being fulfilled by the imported vehicles. As one of the direct stakeholders in the automotive industry, Carmudi sees a growing need for more definite, direct, and careful policies to ensure a healthy and balanced competition in the market, as well as to better regulate the flow of imported vehicles and above all to cater to safety and consumer protection issues.
What advice would you like to give to new entrants in the e-commerce market of Pakistan?
This is a highly competitive space – they need to understand the value addition they are offering and how they can be better. They also need to be more focused on a niche and see where they can be established, eventually start aiming for organic growth and get established.
Where do you see the demand of cars in Pakistan in coming years?
The automotive industry of Pakistan may not be doing ideally but it is progressing at a rather reasonable pace. The industry witnessed a record high in car sales in the year 2012, and since the previous year we are seeing the increase again. The graph of sales is expected to go uphill from here. A major driving factor here is a rise in consumer lending as well as an increase in the per capita income. Along with these an overall improvement in socio-economic conditions of the country is also positively affecting car financing. Car financing, which is currently estimated at 30% compared to a meager 5% in previous years – thanks to the lowest interest rates in 42 years, is also a sign of hope for those in the industry. The multibillion dollar Chinese investments in Pakistan will obviously make more capital available and we should see more activity, directly affecting the demand for commercial grade vehicles.
What are your future plans and targets?
Carmudi plans to expand and eventually move into a number of strong partnerships and be the first choice for ‘everything related to cars, this may include research and a first option for everyone looking for a new or used car. Obviously there is a very large industry providing services to the auto sector and we would like to be a strong part of that as well.