Droom to continue in expansion mode this year too: CEO
Not many players have had as much success in the online used vehicle market as Droom.
Not many players have had as much success in the online used vehicle market as Droom. In a chat with Arshad Khan, founder and CEO Sandeep Agarwal says the company will focus on building new products and technologies to continue growing. Excerpts:
How has financial year 2019 been for Droom, and how do you see the current year panning out?
The financial year of 2019 has been fantastic for Droom! We have entered our fifth year of operations and have actually witnessed an acceleration in our growth. While we are fully aware of the macro slowdown in new vehicle sales, our category domination and how well we are doing versus the rest of the industry has resulted in this massive growth that we see today. We will continue to function in the investment and expansion mode for this financial year too. For instance, we have begun investing more into building technologies, creating new products, venturing into new categories, and expanding into new geographies.
Have you seen any slowdown in used vehicle sales in recent months?
No, we have not witnessed any slowdown in the sale of used vehicles. Our used vehicle sales continue to grow at a year-over-year rate of around 85-100 per cent, and this would perhaps be 8 times larger than the overall industry growth. When it comes to the overall growth of Droom, we may not see a magnified impact because we are already going much faster than everyone else.
You have raised significant funding in recent months. Where is this capital going into?
Yes, we have raised a significant amount of capital in the past few months. We diligently expend most of this into continually updating our technologies, building new products, opening new channels, and expanding our footprint on an international scale. These are the four departments where we channelize most of our funds into. If I have to pick the department where the highest percentage of funds go, I would say product development, engineering, and leveraging AI at present.
A lot of players in the segment have gone offline in recent times. Why so?
Honestly, to begin with, the segment that Droom belongs to has not really seen online players per se. To be more precise, those were more like media firms trying to compete with Saturday newspapers or magazines etc. for rich content, rather than being an online player in this segment.
But, if you look at Droom, it is truly an online player. We do not claim to be the only online player in the segment because it is the only channel we have, but because everything we have, including our technology portfolio, investments, pricing engine, certification courses, fintech product, and a lot of other services are inherently online.
Other companies could not establish themselves as market leaders and because of the rise of Droom, many of them are finding it very difficult and are thus going offline. The offline channel is cost-prohibitive, has inventory risks, and does not leave a lot of scope for true application of technology. Moreover, offline channels leverage capital, physical assets, capital expenditure, and inventory — this is something that we will never partake in.