How Droom is Building the 21st Century Experience in Buying and Selling Automobiles Online
When we launched Droom on 21st November 2014, exactly three years after I launched ShopClues, I knew that we are on to much bigger opportunity and challenge. ShopClues was ahead of its time by 3 years as the first managed marketplace in India, but Droom in my view is 4-5 years ahead of its time and present very compelling market timing and opportunity.
So, before Droom started India only had two online models for automobiles i.e. online classifieds and online discovery platforms, indirectly enabling used automobile transactions, primarily from the roots of media and advertising business model. However, the moment of truth in buying and seller used automobile is not free listing offered by online classified and lead generation offered by discovery platform but trust, transparency and pricing.
Unlike USA, Western Europe and Japan, India is a low trust market in general and when we started the country had no ecosystem to enable transactions for used automobiles. So, we decided to place the whole bet around building trust, transparency, pricing, convenience and selection as our main value pillars.
Before I share what we have done til date to build these value pillars and where we are headed, let me quickly recap some of our numbers.
On supply side, Droom has crossed 50k B2C sellers sign-up (nearly 7k to 8k active at any given point of time), 175k lifetime listings (55k to 60k active at any given point of time), listed GMV of nearly $400mil on our platform, and availability of Droom in 142 cities across India. We have built all these in last 18 months of our operations. At 142 cities, we have probably the largest geographical footprint for any local or hyper local marketplaces in India independent of age, size, business model or money raised. On demand side, Droom has cross 3.2mil in monthly visitors, nearly 3mil in total app downloads, and 1.9 mil in Facebook community members. At 1.9mil Facebook Fans, Droom is the largest automobile focused community on Facebook and every 10-12 seconds someone likes us on Facebook. Also, Droom Android app trending amongst the top 20/25 shopping apps in India every single month since we launched. In terms of transaction metrics, the going was not early for us and we did not get any order from the day we launched on 21st November 2014 until 7th January 2015, when we sold our first every unsolicited item, a 2012 Bajaj Pulsar. However, we have seen a massive growth in our transaction volume, we have gone from 7 orders and $8k in monthly GMV to 3,500 orders and $12.6mil in GMV in May 2016. Finally, in terms of total team size we have grown 10 times from our launch from nearly 15 team members to 162 now. What is very fascinating in my view is, our annualized GMV per employee is almost $1mil, perhaps the highest for any E-Commerce company in India and I am super proud of our team and culture, every droomer brings insurmountable level of passion and energy.
Now, let me share with you, how Droom has been building not only a very advanced and scalable E-Commerce platform for automobile transactions but also a super strong and robust ecosystem so that transaction for used automobile between two unknown people can take place.
We are solving pricing problem for used automobile by building Orange Book Value (OBV), India’s first and only algorithmic pricing engine that offers fair market value of a used automobile – be it scooter, motorcycle, car or even plane. OBV is not a regression model but a more robust, scientific and scalable way to churn out pricing for used automobile. Prior to OBV, valuing a used automobile was equal to pulling a number from the hat. In last 4 months, nearly 62 million pricing queries have been generated using OBV. We filled a US patent for OBV many quarters back.
We are solving trust problem with a very elaborative trust program we have created called Full Circle Trust Score (FCTS). FCTS is combining a marketplace with advanced data science to build trust. We essentially consider nearly 5 to 6 dozens different factors for a listing (e.g. is seller verified, what is the rating and review of a seller or where he is pricing is item etc.) and calculate a score of 1 to 10 and higher the score, better it is for buyer and that in return creates pressure for seller to score high. FCTS builds trust at scale by creating an automated and never ending carrot and stick mechanism in a marketplace. We filled a US patent for FCTS almost a year back.
We are solving transparency problem with Eco, a completely independent app that offers India’s most scientific, comprehensive, independent, objective and unbiased way of inspecting a used automobile. Eco app is available on Google Playstore and any auto mechanic or repair shop can download this app, go thru a basic training, become Eco certified technician and start receiving auto inspection orders from Droom. Eco offers 121 checkpoint inspection report including repair estimates, images of a vehicle and many other cool features. We built this app after benchmarking against the best auto inspection services in USA, Europe, and many other parts of the word. Buyers can order an Eco report for a used vehicle they are thinking of buying to deal with unknowns and avoid negative surprises and sellers can order eco report along with their listing at Droom, the increase the chances of selling and selling faster and at optimal pricing. We started with 25 cities and now have presence in top 35 cities in India and pan India reach by mid of CY 2017. India has 500,000 auto mechanics and they can download this app and start delivering the most advanced auto inspection and make upto 3 times more money vs. what they currently make as auto mechanic.
Besides, Eco, we have done several other things for transparency, especially how droom listing is created and something called Seller Declaration. A seller can not create a Droom listing to sell on droom platform until he is answering 43 different questions. In real life, if you go to an auto dealer, he may not even answer your 43 questions but at Droom you cannot even create a listing until you answer all these questions. This in return creates a minimum standard of information that is now available to potential buyers. More information, higher likelihood that a buyer will buy the item online, very similar to other high ticket items purchased online such as mobile phone, electronic, computers, diamond & jewelry etc. Also, we have something called Seller Declaration, which is essential mimicking the US Lemon Law, wherein a seller is asked to disclose any known problem of the vehicle he is selling. So far, sellers in India, will do everything to conceal even the known problems of the vehicle from the potential buyer and in many cases misrepresent the facts. Seller Declaration at Droom creates a moral obligation for seller to be open, honest and truthful.
In addition to pricing, trust and transparency, we have built dozens of tools to build convenience for byers and sellers e.g. seller schedule, extended test drive, RTO services and optional returns by sellers.
While, it took us two years to build all of the things I mentioned above, we are not way close to being done. In fact, I would say that we just started. And as it is a good product/platform is when you are never done building it.
However, I strongly believe that independent of the category Droom is the most advanced marketplace in India and here are some reasons – 1) Droom offers 4 marketplace formats on single platform i.e. B2C, C2C, C2B and B2B; 2) Droom offers 3 pricing formats i.e. Fixed Price, Best Offer and Auction; 3) Droom has a very sophisticated pricing engine with OBV; 4) Droom builds trust with the use of full circle trust program; 5) Droom builds transparency in a very unique way; and finally 6) droom is a mobile first marketplace and is built on highly scalable and flexible tech platform with 100% our own written code vs. using a standard off the shelf cart.
In coming quarters, we will be focusing on many more innovative product offerings and continue to build the ecosystem for used automobiles in India.
