Business and Product Design — CARS24
Our Understanding of existing CARS24 Business model and potential ideas for Cars24 to be the market leader in Pre-Owned car segment.
Introduction:
As part of our Design Thinking learning journey, We were introduced to many concepts of Business and Product design by Professor Karthikayini and we were given a challenge to choose existing holistic business that has phenomenal traction of customers and understand the existing business and product design of the business chosen , slice and dice it’s aspects and come up with the potential list of ideas that helps business to grow,expand and diversify.
Why we selected CARS24 & How we started ?
When we started thinking on the business to choose, we listed various market disruptor’s like Swiggy, OYO, AirBnb, Ola,CARS24, Zoom Car etc. Then we did our secondary research on each of the industries these businesses belongs to. During our secondary research on pre-Owned Car market,we came across that total user car sales in India are 3.4 Million units/year but only 400,000 are happening organized sector. If some one makes it more organized and address the pains that consumers facing to sell their old cars and create Value,there is a huge potential to make it a successful business.
That’s what CARS24 is doing with a vision & strategic intent of addressing unmet needs with compelling solutions and efficient process. We felt fascinated for the way CARS24 organizing the sector and delivering value to the customers, so we have chosen CARS24 as our case study.
Our Understanding Of Existing Cars24 Business Model :
After our secondary market research on Pre-Owned car segment & CARS24 , we did our primary market research by conducting customer interviews to understand the journey of Car Owner & Pre-Owned Car Dealers.
Since CARS24 is a multi sided platform offering services to Car owners & Pre-Owned Car Dealers,we reached out to their customer segments i.e. CARS24 partnered Pre-Owned car dealers and Individual Car sellers who sold their cars recently using different channels and also with CARS24.
Based on our customer Interviews, We have listed and categorized the pains and Gains of the Individual Car owners & Pre-Owned Car Dealers.
Cars24 has addressed the crucial pain points of both the Individual Car Owners and Pre-Owned car dealers by creating and delivering value proposition of Instant Valuation, free Inspection of cars, Instant Payment and support for the RC transfer and made the process Quick, Simple , Convenient & efficient for both Car Owners and Car Dealers.
Our understanding of the Value Proposition delivered by CARS24
Brief understanding of CARS24 existing Business Model Canvas
This is How CARS24 made the journey easy , quick and effective and creating value to their customers.
We did SWOT analysis on CARS24 to Understand their Strengths & Weaknesses and to Identify Opportunities that CARS24 can explore & Pursue to be market leader in pre owned car industry.
We have created Magic Quadrant where we represented the pains based on the Desirability and feasibility.
With our understanding on the CARS24, Pains & Gains of the customers of CARS24, We have brainstormed and identified prospective opportunities for Cars24.
We have performed the decision analysis based on the 9 evaluating factors to determine the idea that can make Cars24 a market Leader.
The 9 evaluating factors are
“Adding Value to Existing Customer”, “ Market Expansion”, “Increase in Revenue” & “ Create New Market” evaluating factors are given the highest weightage as CARS24 is currently in its growth phase of Startup life cycle, Where Market Expansion and Customer acquisitions plays crucial role to move into high growth/Maturity phase.
We have used the Pugh Matrix for the decision analysis to identify the high impact
This is the Pugh Matrix for decision analysis to objectively evaluate the ideas/options.We have listed the ideas on the Top and Evaluation criteria along with weightage on the left side of the matrix.
Optimal Solutions(Datum) is the current stage of CARS24, which we have used it as relative parameter to Score the ideas.
S: Same as Datum
++, +: Better than Datum
— , — : Worse than Datum
Based on Weighted average score of 72 & 60
We considered “Enabling dealer to sell car from CARS24 platform” & “Addressing towns/rural market” are better options to pursue.
Enabling dealer to sell car from CARS24 platform is completely the other side of the what CARS24 is doing now and Addressing towns/rural market is an enhancement to existing CARS24 model for market expansion.
However with the current Market opportunities available in Pre Owned car industry , we have opted for “Enabling dealer to sell car to individuals from by Leverage Existing CARS24 Bidding platform” is the idea worth pursing.
We have defined our problem statement based on the above decision analysis as
Before we deep dive the selected Idea, Let us understand the Pre owned car Sale life cycle and the opportunity that exists for CARS24
Individuals want to sell their Used car and they have an option to sell it either to Car Dealer or other Individuals. Cars24 is currently facilitating the process of selling the cars to Dealer.
Once Car Dealer procure CAR from CARS24, they will be reselling these cars to Individuals. Currently CARS24 is not facilitating the process of dealer reselling cars to individuals.
This is the area of opportunity for CARS24 to complete the life cycle and helps them to reach untapped market.
Here are four solutions we have identified on “Enabling dealer to sell car to individuals from by Leverage Existing CARS24 Bidding platform”.
We have chosen “Leverage Existing Bidding platform to allow individuals to bid for the car from Cars24 dealer network” as our approach for the implementation of the Idea.
1) It is in line with the strategic Intent of CARS24 of addressing unmet needs with compelling solutions and efficient process.
2) Has existing bidding platform which can be leveraged
3) Unlike other solutions, this will be deliver value to both buyer and seller
4) Since is bidding process, more chances of Fair & Transparent pricing for the buyer
5) Also provides range & variety of cars
High Level Business Model Canvas for new Idea Proposed
Here’s how new solution flow looks like
Functionalities to Implement for new functionality
UI Designs for proposed workflow
We have built the UI prototype for the proposed workflow for the Car Dealer :
We have validated our solution hypothesis with the CAR dealers and CARS24.
Conclusion:
With the strength of 4000+ partnered dealers, spreaded across 136+ locations in 27 cities CARS24 sold 50000+ units is last one year which is 1.3% of market size(Market size of pre-owned cars is 3.6M units per year). Currently CARS24 is facilitating Partnered dealers only with buying the cars and CARS24 partnered dealers are depending on the competitors of CARS24 like Olx, Quikr, Car-wale etc. and their showrooms for reselling the cars they procured from CARS24 & other sources. If Cars24 can facilitate their partnered dealers to sell the cars by leveraging existing CARS24 platform it will increase revenue of CARS24 , increases its market share and also reduces the dependency of the partnered dealers on the competitors of CARS24 and helps to increase ROI of CAR dealer by reducing sale time .
Currently competitors like olx are also adopting the current Cars24 business model which minimizes the competitive advantage of First to market of CARS24 and CARS24 has to create and deliver additional value to both Individuals and Car dealers during selling or buying of pre owned car process.
