CARS24, a tech-enabled used car marketplace, today announced adoption of a franchise business model to strengthen its presence in Tier 2 cities, with the inauguration of its first franchisee branch in Surat, which it says is the second largest automobile market in India.
The company aims to deliver a personalised customer experience and successful on-ground execution, for which it is also planning to introduce a training and mentorship program for its franchise partners. CARS24 says the new business model will help it to expand its presence to new territories to Tier 3 and Tier 4 cities, for which it will leverage the knowledge of native experts to solve the problems of these markets.
For ensuring that all the franchisee-led branches replicate the values and processes of the company, CARS24 will invest Rs 10 lakh to Rs 15 lakh per franchise partner, depending on the location. The brand will test potential partners on three key parameters - entrepreneurial mindset, capital and integrity. On average, the company says it is shortlisting one partner out of over 200 applications.
Commenting on the launch, Mehul Agrawal, co-founder and COO, CARS24 said, “The pre-owned car industry in India has seen rapid growth in the past few years a and demands a more simplified model which can reduce the complexities of consumer business. To achieve this, over the last 4 years, we have codified all the processes and created an internal playbook on how to buy quality cars at best price. As a next step, our key objective is to address the challenges that are being faced by the sellers and buyers of non-metro cities. We are filling the vast gap of a dependable partner in the used car segment and are associating the entrepreneurial spirit and local talent of non-metro cities with our platform for a seamless execution. The launch is in line with our business expansion plan and we intend to make more such announcements in the near future.”
At present, the company has its presence in 35 cities with over 150 branches. It plans to strengthen its reach by launching 100 more outlets by the end-2019 and intends to scale up its presence in over 300 Tier 2,3 and 4 markets by 2021. The company claims it has been successfully closing transactions of 12,000 cars per month and has witnessed a 3X growth in the business.