Source: Nikkei Asia
Carro’s bigger competitor, Carsome of Malaysia, was 16th in the ranking. Carsome is the largest online used car trading platform in Southeast Asia, with a presence in Malaysia, Indonesia, Singapore and Thailand. Its revenue grew nearly 25 times over the three years through 2019 to $203 million, according to the rankings.
Eric Cheng, the co-founder and CEO of Carsome, told Nikkei in an interview that the company would be hitting $1 billion in revenue this year, given the pent-up demand for used cars during the pandemic. “We have reached an operating profit level, and expect to achieve profitability on the EBITDA level by this year,” he said.
With $1 billion in sales, Cheng believes that Carsome is financially ready to face public investors via an IPO. The company, however, is holding on to 2023 as its target year for a listing.
“Although we are already there financially, I believe that we still have to fine-tune processes such as governance and market reporting,” he said. Carsome intends to list in a financial hub along the lines of New York, London or Hong Kong — where, according to Cheng, “the business model would be appreciated.”
Cheng said Carsome will not be looking at geographical expansion in the medium term, however, wants to strengthen its presence in existing markets with new product offerings. “We are now only 1.5% of the $40 billion used car market in Southeast Asia. There is vast growth potential for us to comfortably aim for a 3% share,” he said.
In addition to enabling consumers to sell their cars via an online platform, Carsome would introduce a car sales function where consumers can purchase their secondhand vehicle from the company itself.
The service has been introduced in Malaysia and will be running in Indonesia and Thailand soon, said Cheng. “We understand the risk involved when we have our own inventories, but we believe in the prospects and demand for used cars,” he said.