Broom's Commitment to Power the Used Car Showroom Business with Digital Technology

Showroom is an equally important part of the business of buying and selling used cars because its function is quite vital in showing off the vehicles that will be sold to consumers. This conventional business is often forgotten amidst the hustle and bustle of digitizing the automotive world. Conditions were exacerbated by the pandemic that managed to worsen car sales, which fell drastically.

ShowroomSME level used car dealers are experiencing capital and financial problems deadstock (stock that has not been sold for more than one month). Slowly, the used car sector experienced an increase in sales compared to new cars at the beginning of the pandemic.

Quoting from research by OLX Autos Indonesia, over the past year there was an increase in the demand for used cars by around 15% -20%. The increase is actually in line with production from factories that launch new cars. The latest car is itself a candidate for the business of buying and selling used cars. Gaikindo (Indonesian Automotive Industry Association) targets new car sales this year to reach 900 thousand units, up from the previous 750 thousand units.

Broom sees this problem as an opportunity to help used car showrooms by providing liquidation solutions for their used car stocks through transaction speed and integrated digital services.

This startup was initiated by Pandu Adi Laras (CEO), Andreas Sutanto (CFO), and Moch Purba Wibawa (CBO) since last year. By combining the experiences of the three, be it in digital startups, FMCG, and showroom, providing a deep understanding of business and clarity on how technology can revolutionize the industry.

Pandu has been in the mobility industry since 2016, when he worked for Uber, before joining Go-Fleet. Then, Pungky is an experienced entrepreneur and has good connections in the dealership space, considering Pungky's status as the owner of one of the largest BMW dealerships in Indonesia.

“This background underlies Broom to create an ecosystem platform for every business activity process showroom starting from inventory, financial bookkeeping, and marketplace digitally, so the problem showroom can be resolved end-to-end in one ecosystem," said Pandu to DailySocial.id.

Broom's main target is to become a unique digital solution provider for Indonesia's mobility ecosystem by providing a single platform for SMEs in the automotive sector to digitize their business processes. Pandu said the Broom platform allows SME dealers to manage inventory, financial bookkeeping, and manage their various sales instruments. “This startup aims to become a center for digitizing the dealer network in Indonesia.”

He said that, because in general, business dealers work in a very traditional way, with most of the stock counting done on the blackboard. When trying to go online, car dealers find it quite difficult to sell on the platform and find the right buyer in their location. Financing is generally quite challenging due to the lack of documentation.

However, car dealers go to loan sharks for six-week loans because they find it slightly profitable even with the significant interest these lenders provide (estimated 8% per month). With this condition, Broom aims to provide dealer digitization and financing to empower car dealers.

In the Broom business process, he continued, the company provides three solutions for dealers to increase their business through one platform, starting from inventory management, easy stock access through the marketplace for buying and selling cars, as well as Broom Buyback and Broom Express as liquidation solutions. dead stock inventory.

These two products open an opportunity to sell temporarily deadstock owned by business people showroom to Broom. Then to be bought back after profiting from the sale of the car from the capital obtained. From this scheme, Broom will get a sales margin during the repurchase process by showroom.

Market challenge

Pandu continued, with a business model that is different from the previous automotive digital platform, the biggest challenge for Broom at this time is the acquisition process and activating them as users. For this reason, the company takes extra educational steps to potential partners showroom about Broom's concepts, solutions, and benefits.

Then, users have to go through the KYC process before they can fully utilize the Broom platform.” In 2022, Broom is in the process of expansion, both from increasing the number of employees and branch offices with the aim of facilitating services showroom to access Broom directly.”

In this regard, the company continues to innovate in order to remain a leading player. One that is being worked on is providing solutions in stock availability below the selling price for partners showroom, namely digital auction products. This product is expected to be the answer to the difficulties showroom in search of stock.

"Beyond products, we also continue to improve technology that is easier for users to use, increase the number of employees and branch offices around Jabodetabek," he concluded.

Currently, Broom has more than 2.000 Dealer used cars are scattered in Jabodetabek, the majority are in the SME scale.

Automotive startup competition map

Recently, the competitive landscape for automotive startups has narrowed to regional and local levels through the funding they have announced. In the region, there are Carsome and Carro who are competing to dominate the market. At the beginning of the year, Carsome announced Series E pendanaan funding worth $290 million which managed to boost its valuation to $1,7 billion.

They run a C2B2C business -- buying from consumers and selling them to dealer networks, as well as selling used cars directly to consumers. Also, equipped with an O2O experience through experience centre spread over a number of cities. Its closest competitor, Carro has a Series C funding of $360 million with a valuation of more than $1 billion. Carro also has service experience centre Carro Automall.

Apart from that, at the local level, there is OLX Autos with its main focus more on buying cars from consumers, although now some of its inspection products are also starting to be sold through OLX and other online marketplace channels. Then there is Moladin who pocketed Series A funding of $ 42 million led by Sequoia Capital India and Northstar Group.

Originally, Moladin play in buying motorbikes, but pivot completely in 2021 into buying and selling used cars. Compared to similar players, the differentiation offered by Modalin is the empowerment of a network of agents in offering customers a more personalized car transaction experience.