How Carro’s market dominance is being driven by its very own formula one vehicle — a hyper-vertical platform fuelled by data and running on the engines of a financial services ecosystem for car owners and dealers
Written by Joolin Chua of Insignia Business Review
- Hyper-vertical platforms maximize the LTV of users by expanding across use cases and catering to multiple stakeholders. This drives the ubiquity of the platform across markets.
- Data fuels the efficiency of hyper-verticals, enabling capabilities (ie underwriting risk) across services, and opening up opportunities to tap into financial services.
- The financial services ecosystem play accelerates hyper-vertical growth for a consumer platform by creating more stickiness from both supply (merchants) and demand (customers) on the platform.
The Singapore Grand Prix is just around the corner, and while the F1s have yet to hit the streets, another race in Southeast Asia has long been ongoing and shows no signs of stopping — the race of consumer platforms to dominate the region.
When it comes to Southeast Asia’s automobile industry, Carro has further cemented its lead across four markets as it invests into MyTukar. With MyTukar’s strong founders, extensive dealership network, and vision for the digital experience of Malaysian car dealerships, Carro saw the opportunity to accelerate the digitization the country’s automobile industry, projected to contribute 10% to GDP by 2020.
The lifetime value of hyper-vertical platforms
This push into Malaysia is Carro’s latest in a string of successful market entries across Singapore, Thailand, and Indonesia. Its growth is not limited to expansion across geographies. Since 2015, the platform has raised more than $100M, enabling vertical integration across business models from C2C to B2B, and horizontal integration across services from subscription to hire purchases.
Their growth is a localized hybrid of vertically-integrated unicorns like Uxin running multiple lines of business from C2C used car marketplace to B2B auctions and more horizontally-integrated models like Carvana offering full-stack services for car owners. In Southeast Asia, where regional expansion means navigating vastly different markets, plying along multiple lines of business and aiming for the biggest slice of the pie will not be enough to grow sustainably.
Beyond evolving proven models for the region, Carro has geared its platform to be hyper-vertical, where the focus is on maximizing the LTV of every car owner and partner dealer using the platform. From purchase to maintenance, selling, and repeating the cycle, Carro’s users never have to leave the platform. With vertical and horizontal integrations covering multiple use cases and catering to both car owners and dealerships, Carro is able to establish its ubiquity in the markets it is in.
Data fuels efficiency of hyper-vertical platforms
If hyper-vertical is the vehicle, data is the fuel, enabling Carro to deepen their integration into the automobile industry. In particular, data amassed over transactions across four markets in the region, from car inspection to bidding, coupled with the performance of their financing platform Genie, has made Carro best positioned to underwrite risk. This enables more efficient transactions across their services and lines of business, from insurance to pricing for subscriptions.
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