Droom CEO: New vehicles category to contribute to 8% of GMV by Dec 2018

Online automobiles marketplace, Droom that has ventured into the new vehicle category, plans to grow this segment to six to eight percent of its overall business in about a year-and-a-half, according to a top executive of the company.

The company which originally started as a platform selling second-hand vehicles launched the new vehicles category an year ago.

"It was not a shift in strategy but an addition. New vehicles account for nearly one percent of our gross merchandise value (GMV) now but we think by the end of calendar year 2018, it can be 5-8 percent of the total," Droom founder and chief executive officer Sandeep Aggarwal told Moneycontrol in an interaction.

The company is also betting big on the upcoming festival season during which Indians mostly like to indulge in buying big ticket items such as an automobile.

"Diwali, Dhanteras, Bhaiyadooj and Navratras, these are the four festivals where people actually like to buy vehicles. We have been now experimenting with the new vehicles category," Aggarwal said, adding that this Diwali there will be special emphasis on pushing the category further.

For the new vehicles, the company has tied up with original equipment manufacturers (OEMs) as well as large dealers.

However, even as the Diwali festival season is approaching, Aggarwal says that the automobile category is not very deals-and-discounts centric. The company says that it plans to target the customers through the ancillary services it offers such as access to loans, insurance and road side assistance, among other things.

Droom that sells four-wheelers and motorbikes claims to have an average ticket size of Rs 4 lakh.

According to Aggarwal, the company crossed Rs 300 crore in monthly GMV in August, taking the annualised GMV figure to Rs 3600 crore.

The company that raised USD 20 million in a round led by Integrated Asset Management, plans to become profitable latest by February 2018.

As per a recent report published by the company, two-wheelers contribute around 44 percent of Droom’s overall sales with cities such as Delhi, Pune, and Mumbai being the top cities for the purchase.

Overall the company claims to have 65 percent of the total automobile market transactions which take place online in terms of GMV. It also claims to have 1,80,000 dealers on its platform.

"India is a USD 160 billion automobile market and roughly half a percent or USD 800 million is online and out of that USD 600 million is flowing through our platform," said Aggarwal.

The company not just competes with niche rivals such as CarDekho and CarTrade but also with online classifieds such as Quikr and Olx.

Droom has earmarked Rs 225 crore for marketing from July 2017 to June 2018.