A combination of low interest rates, a growing middle class, and the absence of strict regulations on car ownership has led tech companies to take a keen interest in the Indonesian market. Rocket Internet’s car classifieds site Carmudi has been operating in Jakarta for nearly one year now, although it’s currenly only seeing around 300,000 visits per month. iCarAsia’s Indonesian portal Mobil123 is doing a little better with around740,000 monthly visits, as per SimilarWeb.
According to the Indonesian Automotive Manufacturers Association, there were 1,208,019 new car sales last year in the archipelago. This is a slight dip from the year before, which saw 1,229,916. Local financial portal Indonesia-Investments credits the drop to a weakening Rupiah against the US dollar, coupled with inflation, and an economy that may be losing steam. For consumer-to-consumer car classifieds sites, however, the drop in new car sales may actually be a negligible factor. If fewer people are strolling into Astra Motor dealerships on the weekends to pick up new coups, odds are they’re looking into used vehicle alternatives.
Regardless of what caused the dip, India’s GirnarSoft, which ownsCarDekho, still sees Indonesia as a green opportunity, having recently launched CarBay in Jakarta.
GirnarSoft was valued at US$300 million when it raised series B fundingthis past January. The company is backed by investors like Sequoia Capital, Hong Kong-based Hillhouse Capital, and Tybourne Capital. CarDekho is GirnarSoft’s largest venture, and claims to be the number one auto portal in India with around 3 million monthly visits.
Testing the waters without classifieds
Indonesia’s CarBay is not a classifieds site yet. Instead, it’s just a content provider and resource for folks who are interested in making a purchase but still doing their homework. On the site, users can hunt for vehicles they want to know more about, filtering via price, brand, fuel efficiency, model, number of passengers, and more. Essentially, CarBay acts as a decision-making aid, and lets users easily find various dealers in Indonesia.
CarBay also lets users do instant side-by-side comparisons of up to four different vehicles at a time. The comparisons are quite thorough, and include everything from engine stats and safety features to luxury options and performance specs.
At the moment, it’s unclear how CarBay plans to monetize outside of charging its partner dealerships for content on its portal. It’s likely that the firm is simply trying to test local waters by building up its user base before plowing full-steam ahead with a classifieds play. If CarDekho’s business model is any indicator, CarBay will probably go head-to-head with the likes of Rocket Internet’s Carmudi and iCarAsia’s Mobile123.
A slowing but still favorable car market
CarBay claims vehicle sales in Indonesia have been rising at a steady 11 percent compound annual growth rate. This figure is probably referring to new and used cars alike. The company cites the nation’s annual GDP growth as one of its most encouraging stats.
Indeed, the archipelago has been experiencing economic growth of roughly six percent annually. However, the economy only advanced by 4.71 percent this past year, which was the slowest expansion since the third quarter of 2009. Car sales are one of the key indicators by which to measure local consumers’ purchasing power as well as the general state of the economy. As of May, only 443,328 new cars had been sold in the archipelago thus far in 2015.
“Indonesia is at a good stage of economic development and online products like CarBay will set new benchmarks for organized car buying and selling in the country,” Amit Jain, CEO and co-founder of GirnarSoft said in a release. “Our rapid growth has been due a great web and mobile product, which we feel will do well in Indonesia too.”
From what can be seen on the site, it looks like CarBay has no intention of getting into motorcycles, a segment which dominates the nation’s personal vehicle market.GirnarSoft is one of several Indian firms to have recently come to Jakarta looking for greenfield tech startup opportunities. Earlier this week, Tech in Asia spoke with a venture capital firm called Aavishkaar, which recently locked in US$45 million to invest in Indonesia and other emerging markets. Indian tech companies setting sail for Jakarta could be an interesting trend to keep an eye on for Q3.
