sgCarMart: Singapore's ebay of cars

HOME-GROWN vehicle trading portal sgCarMart (SGCM) has come a long way in scrubbing clean the stereotypes of persuasive but dishonest salesmen.

The company - bought over by The Business Times publisher Singapore Press Holdings in 2013 - seeks to bridge the information gap between buyers and sellers, and provide guidance on best practices for both parties.

The numbers tell its success story.

The online classified platform has garnered a strong visitor count of a whopping 2.6 million visitors a month, fuelled by a 10 per cent year on year growth.

The high visitor count translates to impressive deal numbers: some 7,200 cars are transacted every month (10 per hour), from the 10,000 listings on the platform at any one time.

While it acts as a middleman in matching buyer and seller, SGCM does not take a cut from deals. Instead, the bulk of its revenue comes from its "Cars for Sale" classified advertisements, in which individual car owners pay a S$58 fee as direct sellers to list their vehicle for sale on the platform to prospective buyers. A premium ad space option offering greater visibility is available for S$98.

SGCM chief executive officer Vincent Tan said that as a classified car listing company, the services that SGCM provides are positioned upstream, which allows the company to recognise the innate resilience in the market as an opportunity for monetisation.

Mr Tan said: "The used car market is evergreen - there will always be cars being transacted in Singapore. And as long as there is the need for cars, price equilibrium will see that supply matches demand."SGCM is dependent on the price fluidity of used cars to ensure that transactions are completed on the online platform.

In addition to a listing platform, the company also provides after-sales support involving documentation. Ownership transfer, registration and de-registration procedures are offered free of charge to aid first-time sellers with the necessary paperwork.

On the SGCM classifieds platform, prospective car buyers can buy from used car dealers in a Business to Consumer (B2C) basis, or direct from sellers on a Peer to Peer (P2P) basis.

Its alternative product offering, Quotz, adopts a Consumer to Business (C2B) model, helping car owners sell their cars to dealers through an online auction platform. In the Quotz process, sellers first book an appointment to schedule an inspection of their vehicle at the Quotz inspection centre. Car details are then posted on their online platform for used car dealers to bid on. Sellers are not obligated to sell, even at the conclusion of the auction.

The advantage of this process is speed and certainty: the entire selling process may be concluded within the day, including paperwork, with Quotz paying the seller upfront to remove the counterparty risk posed by the used car dealer.

The vehicles that are listed online span a wide range - from luxury sedans to vintage cars - and cover both used and new cars. "As long as it has four wheels, it's welcomed to be listed on our website," adds Mr Tan.

SGCM has a strong market dominance - the majority of used car dealers in Singapore use the platform to drive their online sales. These dealers pay a monthly fee to post their car offerings online to prospective buyers, forming a recurring revenue stream for SGCM.

"We have a very strong hold on the market - some 900 to 950 used car dealers are on our SGCM platform, which is roughly 95 per cent of the dealers in Singapore." says Mr Tan. "This translates to the best visibility for the listings on our website. We are a proven, effective sales platform with the greatest reach in Singapore."

According to Accounting and Corporate Regulatory Authority (ACRA) records, SGCM, which was launched in 2004, chalked up a S$5.5 million revenue with a net profit after tax of S$2.33 million for 2011. Since SPH's acquisition of the business in 2013, the company's revenue has "more than doubled". Mr Tan declined to give more recent revenue figures.

Going beyond ad-placement, SGCM has built a car community around its online platform, where online forums are busy with discussions, ranging from DIY maintenance to car and workshop reviews.

SGCM also recently ventured into publications, taking over online magazine Torque, as well as running Singapore's only YouTube channel dedicated to car reviews to build on their online digital presence.

Expanding offline, SGCM was a co-organiser of car exhibition Cars@Expo, which ran in October last year as part of efforts to widen its reach to the car community.

SGCM's presence today pervades the entire car trade ecosystem, from COE bidding to vehicle scrapping, becoming the one-stop destination for all things cars. Understandably, Mr Tan has no qualms describing his company as "the Singaporean eBay of cars".

In addition to a listing platform, SGCM also provides after-sales support involving documentation. Ownership transfer, registration and de-registration procedures are offered free of charge to aid first-time sellers.