The brand will soon be launching ‘OLX Auto’, a dedicated platform for selling and buying pre-owned cars. We spoke to OLX’s CMO about it and more.
“In our recent survey, we noticed that there was an important emerging trend in non-metros with respect to the demand of pre-owned cars,” Sapna Arora, brand regional head, CMO and PRO, OLX, tells afaqs! over a call on the brand’s recent announcement to launch ‘OLX Auto’.
‘OLX Auto’, a sub-brand of OLX, the leading online platform for the sale and purchase of pre-owned goods, is dedicated to pre-owned auto segment in India. The soon to launch platform will offer customers an end to end solution to buy and sell a pre-owned car, either online or at an offline store, as per their preference. It will provide a host of services, including financing, verified inventory of cars, after-sales support, a dedicated dealer financing option and more.
“We have always had interest in the used car market. In Corona times, when the demand for pre-owned cars shot up, we realised that there was a gap in the market regarding the supply of these cars. There were also limited platforms for consumers to be able to sell and purchase them in a transparent and reliable manner,” says Arora.
To understand the impact of COVID-19 on the behaviour of the consumers during the festive season, OLX conducted a study of 5,800 car buyers and sellers during August and October 2020.
Sixty-one per cent of the respondents said that they planned to buy a car in the next three months, between November and January. Based on the finding, Arora mentions that the demand for pre-owned cars has shot up 133 per cent and supply is up by 112 per cent. Sixty-two per cent of these respondents are millennials in the 20-35 age group, indicating that a majority of the pre-owned car sales during the festive season will be driven by this younger generation.
Fifty-one per cent of the respondents were salaried employees, while 40 per cent were either self-employed or had their own business. Economic uncertainty among the working population has led to a shift in the preference for pre-owned cars.
Fifty-six per cent of those surveyed said they would prefer to buy a hatchback car, such as Alto, Kwid, Santro, Swift, i20, Polo, to name a few. Forty-four per cent of the respondents expressed an interest in buying a larger car. Seventeen per cent would prefer to buy a sedan (Xcent, Dzire, Etios, City, Verna and Corolla), while 11 per cent would prefer to buy an SUV (Ecosport, KUV, Innova, Duster, Creta, etc.).
“Hatchbacks ranging between Rs 2 lakh and Rs 3 lakh are more in demand. Around 30 per cent of the respondents are willing to spend upto Rs 3 lakh. This has a lot to do with discretionary expense of the consumers, which has been impacted due to the current state of the economy,” Arora points out.
Sixty-seven of the respondents would buy a used car to move around with their families. As the economy gradually unlocks and workplaces resume functioning, albeit in a limited capacity, car buyers are shunning shared modes of transportation and opting for personal cars. Twenty-two per cent of the respondents would prefer to buy a pre-owned car for their daily office commute.
While the majority of the respondents are keen to buy a used car this festive season, 15 per cent also plan to sell their existing cars. Of the same, 53 per cent plan to upgrade their cars or buy another car, while 23 per cent plan to do so to meet their financial needs. Interestingly, 12 per cent of the respondents are selling their spare car, which they no longer use.
“The deciding factors when making a purchase decision generally are mileage, whether or not the car has been in an accident, and the number of hands the car has changed,” Arora tells us.
While the demand for pre-owned cars since the outbreak of the pandemic has shot up by 133 per cent, the supply is up by only 112 per cent. Arora says, “The gap between the supply and demand of pre-owned cars has become more pronounced now.”
She adds that this mismatch in supply and demand is the gap that OLX is trying to fill with the launch of its new platform. To communicate about it, the brand has roped in cricketer Yuvraj Singh for its campaign.
The digital, social and in-store offline campaign launched last week aims to heighten OLX Auto’s resonance, recall and preference during this festive season, which is seeing heightened demand for pre-owned automobiles.