Droom starts selling new cars, targets Rs5,000 crore GMV by 2017
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New Delhi: Droom, an online marketplace for pre-owned automobiles, has started selling new vehicles as it targets a threefold increase in sales over the next 12 months, a top company executive said on Thursday.
“Earlier, we wanted to focus on the used-vehicle segment and change the way it functions through the use of digital tools. In the same vein, we want to now create a paradigm shift in the still conventionally-run new vehicle sector and bring about a positive disruption for the benefit of the end consumer,” said Sandeep Aggarwal, founder and chief executive at Gurgaon-based Droom Technology Pvt. Ltd, which owns the marketplace.
Aggarwal left e-commerce marketplace ShopClues, which he founded in 2013, and founded Droom in 2014.
Droom will sell new vehicles from companies such as Nissan Motor India Pvt. Ltd, Skoda Auto India Pvt. Ltd, Hero Electric and Mahindra & Mahindra Ltd, Aggarwal said.
Droom currently does an annualized GMV (gross merchandise value or cost of goods sold) of Rs1,200 crore and aims to touch Rs3,000 crore by March 2017 and Rs 5,000 crore by December 2017.
Auto makers will get to have their own brand stores on Droom where they can put up videos, brochures and announcements.
Droom will offer test drives at customers’ doorstep.
The company operates with gross margins of 1.5-2.5% in the new vehicle segment and about 1-1.5% in the used vehicle segment.
According to Aggarwal, online sales of automobiles is an immense market opportunity. The online segment is currently a $400 million market and is expected to touch $20 billion by 2020, he claims.
In June, Droom raised an undisclosed amount in a round led by Singapore-based early-stage technology fund Beenext, Japan’s start-up investment and incubation firm Digital Garage and existing investors Lightbox and Beenos.
The company has raised over $40 million since its founding, Mint reported.
Droom claims to have more than 74,000 sellers, 25,000 products and 102,000 listings. It aims to expand to 200 cities by 2017.
The company also expects to launch its international operations in Indonesia, Malaysia, Thailand and the Philippines over the next 10-12 months.
The average ticket size in the scooters category is Rs40,000 and Rs68,000 in motorcycles category. In the cars segment, it is Rs3.5 lakh.
Droom currently gets 65% of its orders from the two-wheeler segment, 30% from cars and the rest from services.
The company expects the new automobiles segment to contribute about 10-15% by March 2017 and 20-25% of sales by 2017-end.