CEO Spinny talks about used car buying experience in India, market expectations and trends
Niraj Singh, CEO and Founder of Spinny, talks to us about how it differentiates itself in the used car sector, segment scope and value chain creation.
The used car buying space is growing every year – especially after the pandemic, where it has seen 14-15% growth. There are two main things driving this growth – one is the rising price of new cars and the second is the growing demand for personal mobility, where cars are more than just a vehicle. commuting but also an extension of safety and well-being. for family.
Of course, Spinny has emerged as one of the major players in the used car buying space and speaking to Autocar India, said Niraj Singh, Founder and CEO of Spinny, “As we were When we started working in this field, we saw a lot of players, but we realized that not all players respect the kind of emotions you have when you buy your new car. So we realized that there was a clear room; The reason we operate in this category is to respect that feeling and do our best to address it.”
owned to maintain quality
What sets Spinny apart from other used car aggregators is that the company owns its own warehouse, which, they say, gives them greater control over quality, transparency and accountability. submit. “If you don’t own the value chain, you can’t control the quality, you can’t be responsible for what you’re delivering to your customers,” Singh said.
The company has been using a full-stack model since early 2017, before that they have been operating on a managed market model since its inception in mid-2015. Full-stack model basically means The company buys vehicles from sellers, manages its own inventory, and sells it directly to the end customer, thus owning the entire value chain.
“If demand is strong and if it is going to stay that high, then having a full-stack model is not risky. But at the same time, we strongly integrate technology, data science, and analytics in everything we do. So every decision is supported by our technology. In a way, this ensures that we are scaling the business without taking unnecessary risks,” Singh said.
The important showroom experience for used car buyers
An interesting trend that has been observed in the used car buying space is the blurred line between potential new car buyers and used car buyers. “A car buyer is a car buyer, where the customer is essentially looking at the best product available within their budget and one that fits their requirements,” Singh said. However, the coveted value of a car in India remains constant and customers also expect a better buying experience.
This is another area where Spinny is trying to create a niche with a new car showroom-like experience by offering customers the convenience of entering and purchasing from an extensive range of cars. on display.
Singh further explains the quote, “If they buy a car, it is a very special and aspirational transaction for anyone. We’ve built this platform for people to buy used cars with the same confidence as they would when they bought a new car. At the same time, the end-to-end buying experience could be much better.”
Supply challenge is bigger than demand
Singh also highlighted the fact that there is a big gap between supply and demand. Sellers are always looking to maximize the price they will receive and will therefore consider many potential buyers. Meanwhile, on the demand side, it’s not just about getting the best deal possible, but also getting the right car, meaning the customer will also consider factors like quality, safety and responsibility.
Therefore, finding a seller becomes more difficult than finding a buyer. Singh says there are three things that need to be catered for for sellers. “One is the price, which needs to be competitive. Then there’s speed and convenience. Because of our model, we can offer very competitive prices. Second, in our system, for the seller, everything is a door-to-door service. So it’s very convenient and very fast; If you want, you can sell your car the same day.”
For the seller, one needs to submit some basic details about the vehicle on Spinny’s online platform, after which they will be provided with a silhouette. If the seller is comfortable with that range, Spinny will conduct a same-day inspection of the vehicle on the seller’s doorstep. This will be followed by a final quote. If accepted, Spinny will pay and pick up the car right there.
Spinny’s expansion plan
Spinny currently operates in 15 cities and in the short term the company is looking to penetrate more deeply into existing markets rather than adding new ones. The company started with four cities – Delhi NCR, Bengaluru, Hyderabad and Pune – and in each of these four cities, the company now has a market share of 5-10%. Four more cities have been added in 2021 – Mumbai, Chennai, Ahmedabad and Kolkata – where they currently operate with around 3.5-4% market share. The company has also expanded in seven smaller cities by 2022.
“For now, we just want to keep going deeper into our 15 existing cities and the idea is to first have a minimum market share of 8-9% in each of these cities, then we will start think of other markets,” Singh said.
Talking about the used car market in particular, with a growth rate of 14-15%/year, it is expected that the used car market will double in the next 4-5 years. At the same time, the organized sector, currently at 20%, is also predicted to double to about 40% in the same time period. Singh believes that the future of the used car market is very bright as it will continue on its growth trajectory along with the new car market. Singh added: “If you are a believer in the Indian economy, the new car market and the used car market, both will grow like anything.”
Would you buy a used car from an organized player like Spinny? Let us know in the comments section.
Sales of new cars and SUVs grew steadily in February 2023
Nexa hopes to make Tata, Hyundai the second largest auto retailer in 2024