Arun Sirdeshmukh:  ‘Ola Cars is aiming at leadership position in India's used-car market .’

by Nilesh Wadhwa 06 Nov 2021


Within a month of launching its used-vehicle business, Ola Cars claims to have sold more than 5,000 vehicles on its platform. The CEO of Ola Cars speaks to Nilesh Wadhwa on the company’s growth strategy, the sharp focus on customer satisfaction and developing an expansive service network.

What is the strategy behind Ola’s diversification into the pre-owned car business in India?
Ola has a vision for the overall mobility space. Ride sharing is what we started a few years ago but the mobility space is undergoing a change. Be it in terms of technology or sustainable ways of ride share, we are getting ready for new aspects of mobility solutions.

Secondly, with Ola Electric, we started with two-wheelers and we are here for leadership in that space. Thirdly, our new auto retail can be easily understood in the way that you have all the commerce of the world around two- and four-wheelers. All the three aspects are pieces of the same jigsaw puzzle and we are here to solve all those mobility challenges and constraints. For us, it is all these aspects, not just any one segment. Yes, just the start has been with ride sharing.

The used-vehicle business is very competitive with a mix of organised players, pure-digital brands, OEMs, multi-brand and smaller unorganised players. How do you plan to compete?
It is not about asking ourselves how we do things better or more efficiently than our competitors. It is about how we make a difference with the consumer. The pre-owned car business is just one aspect. What about elements of service itself? How do we make it a delightful experience for a owner of a pre-owned or a new car beyond the warranty period? How do we ensure a robust service network?

There are verticals within vehicle commerce and today we are speaking of one of those — pre-owned. The market size is bigger than even the new vehicle market; in fact globally, the used-car business is in multiples of the new vehicle business.

At present the used-vehicle business in India is mostly physical, fragmented and unorganised. Negotiations take place for hours in the physical format, there’s limited choice at dealerships, finance, and then the trust aspect. It is not the first time that digital-first businesses are transforming the way how you operate today — grocery, food, pharma, electronics, or be it pre-owned vehicles.

There are three aspects of what we are trying to do. Digital-first business means everything available on the app — be it browsing, selling or buying. Customers are now familiar with apps, which allows to evaluate, sell, offer, close the deal and make the payment. For instance, we are transacting with people who want to buy and are able to credit their account with the money in 30 minutes. But we are not happy with that . . . we want to make that an instantaneous procedure.

We are integrating partners on our platform; for instance customers will also want to look at financing, buy insurance. Several banks / financial institutions are already doing it, but it is the first time they are doing it on a platform like ours. It is related to the aspect of digital first.

The second aspect is technology where we are just scratching the surface. For instance, if you want to evaluate and sell your car, how can you bring tech into that process? It needs to understand the contours of your vehicle and condition, using tech devices. We are already operating in over 30 cities, bringing vehicles to the refurbishing centres which are equipped with the latest technologies for evaluation, repairing, engine and paint shop. This makes the whole process faster, convenient and offers better quality too.

Lastly, it’s about personalisation. Why does the customer need to hop from one dealer to another to sell his/her car? How can we allow the customer to choose the time for a test drive, payment, delivery? Or if he/she is not happy with the first test drive, get them another vehicle? It is about us going to the customer.

There are a few players who are taking the digital journey but we are a technology player. We understand the mobility ecosystem deeply and what it means to be a digital business across segments — mobility, food, insurance, and now electric. When you combine the customer painpoints in the industry, you will see almost 90 percent of the transactions are happening in more of a traditional manner across many touchpoints in India. I think we can make this more efficient and delightful for customers. I can see that in our reviews and our early stage on those aspects.

Since you are focusing more on the digital front, does that mean you are spending more on customer acquisition? 
We have got millions of customers engaging with Ola on the app for their current mobility needs, as well as for food delivery. Add to that the people who registered, downloaded the Ola app and are active users on a weekly or monthly basis, and even some who have limited use for over a year for their mobility.

Given that ecosystem, we are mirroring almost everyone who is already tech-savy and connected to the internet. The number of people transacting with us on a daily basis is in millions. We have the advantage of reaching out to these customers for their need to buy or sell a car. We are reaching out to them and asking them to check our offerings. We are already present in all markets, and even in the 30-markets where we have started the operations (Ola Auto) we are getting a phenomenal response. Are we reaching out to these customers outside our app? Yes, we are active on all other channels as well. While we are new in the used-car market, our engagement is improving on a week-on-week basis.

Given the ecosystem. our sights are set on, we aim to move into 100 markets by next year. Our single agenda is that to do everything right for the customer — we are here only for the leadership position.

Can you elaborate on your aftersales service centres and will they be partner garages or owned by Ola?
We are partnering with those having the infrastructure. These centres need to match our specifications and requirements and we are closely involved with the tech, environment, operation process. If you buy a used car from us, it should be as good as new.

We are offering a comprehensive warranty like you would get from new car. You also have an assurance that if there is an Ola service centre network, it will take care of your servicing needs if it is not covered by your OEM warranty. It is about offering a trusted peace-of-mind experience.

We have the network and infrastructure to take care of customers after purchase needs through the lifetime of the vehicle. We are working with the service centres to have the consistent processes, operations, tools, backend, training of the teams on ground, to ensure that the quality of the refurbishment is of high-quality. We have tied up with OEMs to provide genuine spare parts. The partners will be exclusive for us . . .  these will be Ola-authorised refurbishment and service centres. 

That means the car care service will be another business for Ola?

Yes. At present, we haven’t opened that channel for others, it will come later. For example, if you have already bought a used-car then you may have service needs, what about a high-quality brand that can take care of your service needs in quick time, at a reasonable cost, and offer genuine spares. All of these needs are independent of your buying the vehicle from anywhere and we come as a trusted partner.

That also opens up the possibility of Ola introducing private-labelled spare parts.
This space is interesting and exciting with large opportunities and varying in the full spectrum. We are currently focused on these two — the pre-owned business and to provide at some point an open service proposition so that you can go with a trusted partner, especially after the warranty period is over for a new vehicle owner.

Does Ola have plans to enter the used two-wheeler business?
Yes, the pre-owned two-wheeler business is also exciting for us and we are hoping to add that to our current offering which is four-wheelers. The new vehicle business (two- and four-wheeler) is in the pipeline. We expect the pre-owned two-wheeler business to begin soon.

Will Ola Cars only be a digital platform, or will you look to have some sort of physical presence with dealer partners/franchisee?
We are a digital-first company and believe a lot of things will be needed to be digital because it is the most convenient thing. But we are not a digital-only company. For instance, in the customer's journey to own a pre-owned car, a test ride is physical as is evaluation. So does that physical aspect translate into physical outlets? It is too early to speak on this but  nothing is off the books. If there is a good reason to have some physical outlets, we will do that.

What, in your opinion,  are the key challenges for Ola in the used-vehicle business?
Operationally, it is a fairly complex business. Getting it right, be it in terms of technology, people on the ground or getting all the pieces to work together smoothly, is complex. We worry about the efficiencies that we are operating from a customer’s viewpoint, we do things faster and are hungry for that. But since there are some interventions which are manual, there are challenges that prevents customers from taking test drives.

As regards future growth, the challenge is our ability to scale up the business to larger markets. The challenge is also operating in smaller towns and ensuring there is enough supply and demand. We haven’t seen anyone else scale up to that level, so it is going to be an interesting challenge.

This interview was first published in Autocar Professional's November 1, 2021 print edition

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