The second-hand car market in India is huge. Close to 3.5 million used cars are bought and sold every year, and that number is just going to increase to more than 10 million in the next five years. That means over 20 million customers will be engaged in this market, and all with an average transaction value of Rs 3Lakhs. Anish Karan, Rahul Thakur, Rahul Anand and Arijit Biswas decided to tap into this market and start up in June 2015 to capture a sizeable chunk of the market.
“The market of second hand cars is complicated and there is absolutely no solution available, particularly for Peer-to-Peer transactions,” says Arijit Biswas, an ISB graduate. The company connects Buyers directly to Sellers assuring quality at accurate prices to help you effortlessly hop cars. “We thought the name HopCar would be appropriate, we want the cars to move quickly from seller to buyer in a hassle free and transparent manner,” adds the CEO who also worked with OYO Rooms briefly.
Their small but effective team of 15 people is running this revenue generating business out of Gurgaon. The founders always wanted to start up a venture of their own. Ashish, Rahul Thakur and Rahul Anand come from NITK Surathkal. Right after college Rahul Thakur started to work with ZS Associates where he met Arijit. The entrepreneurial spirit got them together to solve a problem.
Before ideating HopCar, the enthusiastic entrepreneurs explored options in Payments, Healthcare and Travel. “We realized that this market was untapped into, and the biggest player just had a market share of 3%, so we got into making a plan that would make us the leader in this sector,” says Anish who heads Sales and Marketing. Prior to starting up, he had worked with GE Capital.
“We wanted to work towards building a product/service that makes life better for tomorrow. With India’s population rapidly adapting to technology and the internet, there was no better time to build technology based solutions than now,” says Rahul Thakur who takes care of Technology and Design at HopCar. The problems in the used car market are prevalent worldwide and start-ups everywhere are trying to solve it differently. The Indian market is considered to be the most complicated market taking into account the consumer’s mindset.
HopCar has studied into the Indian consumer’s buying behaviour and come up with a solution that blends right in and makes the process easy, quick and hassle free. “We inspect, and filter cars that enter our marketplace to control quality. We engage with buyers prior to them seeing the car to better ascertain their requirements, and complete the ownership transfer process along with providing warranty and maintenance support. Our association with our customers extends far beyond the sale of the car,” says Rahul Anand who handles Operations. “We started by providing services for free just to better understand the needs and build a solution that fits perfectly,” adds the ex-HSBC employee.
The company understands the importance of delivering good customer experience to their users, in spite of the transaction frequency being low. “Your customer becomes your brand endorser at the end of the day and you build a reputation largely by word of mouth,” says Thakur. Unlike e-commerce or taxi or food tech startup, discounting and luring customers with free goodies would not help them gain customers. They need to reach out to people in a completely different way.
The ticket size in our market in significantly high. In the first 3 months, it was a challenge to persuade customers to try us and pay us. We resorted to multiple growth hacks to get as many people familiar with the brand. At the end of the day, it’s the service that customers pay for and that has been the single most driver in every transaction,” say Thakur and Anand. While still in college, both Thakur and Anand had previously started a venture, in low-cost advertisement notebooks called MyCopie, which currently operates in Bangalore and Chennai.
The team uses data-driven algorithms to improve existing processes. They have created a valuation algorithm to predict selling price of any car based on its condition and factoring in market events. The valuation engine also takes into account the output signals from an OBD (On Board Diagnostic) kit, which is plugged into a car during its inspection. HopCar has also developed a highly scalable online marketplace using RESTful APIs that can be integrated with third parties. And to add on, they have created recommendation engine to map buyers’ requirements with available cars.
This start-up has a strategic tie-up with Bharti AXA to back the vehicle warranty and leading financial institutions for consumer loans. This way they ensure a hassle free transaction for the customers. The entrepreneurs are making the most of government’s development on digitisation of vehicle records and building a technological infrastructure to enable transparent ownership transfer.
The founders believe that there has never been a better time to start-up in India. “Rapid adoption of internet is a tremendous opportunity for Entrepreneurs to build solutions which solve the existing problems and eventually build a great company,” says Anand. When asked for a future message for entrepreneurs, Anish says, “Keep challenging the status quo as there is always a better way to do things!”