From Motorcycles to Used Cars, CEO Moladin Explains The Reasons Behind The Change In Business Focus

Last week, Moladin officially announced the results $42 million series A funding led by Sequoia Capital India and Northstar Group. This investment will be focused on increasing the car transaction business, by expanding the branch network and business model within it.

DailySocial.id had the opportunity to chat with Moladin's Co-Founder & CEO Jovin Hoon, explaining the company's reasons pivot from motorcycle products to used cars, to the strategies they will rely on in the midst of fierce business competition car marketplace.

For information, Jovin was recently appointed as CEO of Moladin Indonesia. Previously he served as COO.

Decided to focus on used cars

Founded in 2017 by Jovin Hoon and Mario Tanamas, Moladin initially focused on bridging community needs to buy a motorbike. However, since 2021 they have shifted their focus completely to the used car buying and selling segment. Even if you visit the Moladin site, currently there is no longer a "Motorbike" option in the available menu.

"The used car market in Indonesia is very fragmented and unorganized, with many players such as agents, micro dealers and large dealers. During the pandemic, there was disruption in the supply chain which resulted in a decrease in car transactions, which had an impact on the performance of the automotive industry. This had an impact "to various stakeholders in the automotive ecosystem, especially agents, micro dealers and consumers," explained Jovin.

This change in business focus has paid off. Jovin said that over the last 6 months Moladin has seen explosive business growth. This also gives confidence to the students founder to focus its resources on the used car business, with short-term plans to expand the business into other verticals such as financing and other automotive ancillary services.

"Nevertheless, we do not rule out the possibility of re-entering the motorbike segment if we decide to expand our offerings in the automotive ecosystem," said Jovin.

Moladin value proposition

Even though there are not many digital players who are democratizing the used car buying and selling market in quantity, several startups currently playing in the local market have strong support from their respective investors. Call it the recent Carsome closed series E funding and carries a company valuation of $1,7 billion -- despite not being born in Indonesia, they have quite a strong presence here. Likewise, Carro, who was also new last year unicorn.

Moladin is well aware of this condition, for this reason a number of business models and strategies have been prepared. The most significant thing that is felt to differentiate it from car marketplace Others, Moladin focuses on empowering its agent network.

"Our agents are what differentiate us. They are a key and integral part of our business. By empowering agents through providing the right tools and ecosystem, we can offer customers a highly personalized car transaction experience," explained Jovin.

Apart from that, technology adoption will also be Moladin's main focus, in order to digitize business processes as a whole. Some of the things we want to offer include: (1) transaction speed and disbursement on the same day; (2) competitive prices; (3) good inventory selection; and (4) accessibility, with a strong presence even outside major cities. Currently, Moladin is present in more than 115 cities throughout Indonesia.

Moladin business model

For Moladin's long-term goals, Jovin explained that they want to build a one stop shop for all automotive needs, addressed to all players in the market. "When people think about automotive, we want them to think about Moladin. In terms of the overall user journey, we are platform omnichannel," he added.

To use Moladin services, every customer (consumer/dealer) who wants to make a car transaction can do so directly online (via app/website) or offline (by contacting agents in the field). Sellers will always want fast payment disbursement and the best prices.

"Sellers typically want fast disbursement and the best prices. With the personalized service offered through our agents and the convenience of transactions from the app, Moladin can conduct inspections quickly, agree on a fair price quickly, and offer sellers disbursement on the same day after the transaction is complete," he explained.

Meanwhile, for buyers, Moladin strives to provide a complete inventory selection. Through an agent, buyers can discuss their needs personally. Or if needed, buyers can also come to warehouse nearest to see the products currently on sale.

"After the transaction closes, we can offer financing options and other additional services to our customers through the partnerships we have with the company multi-financing leading in Indonesia. Due to the large volume of business, through us, the company multi-financing can offer our customers the most competitive financing rates with loan approval in the shortest time," added Jovin.

Moladin's approach is to build the entrepreneurial spirit of the agent and dealer network, to create a complete digital automotive platform (full stack) and provide the best training, assistance and support.

With that, Jovin said that the company has seen rapid growth in its used car business with transaction volume growing >20x over the past few months. The Moladin platform is also said to have increased agent and dealer productivity by >2,5x.

"All this can only be achieved through empowerment. By providing our agents with the right tools and training, they can leverage Moladin's digital platform and become micro-entrepreneurs. As a result of increased sales, these agents can also earn more commissions, working for improve their standard of living and make a better life for themselves," explained Jovin.

Challenges in buying and selling used cars

Jovin also highlighted the challenges that many still face in used car buying and selling transactions. First, on the seller's side, usually because they are pressed and don't have the right route, they have to get a very low selling price because they don't have any bargaining power. Likewise for buyers, when they have to go from warehouse to warehouse, they find that their choice of cars and financing is limited.

Second, due to market fragmentation, micro  agents and dealers also face the same problem of limited inventory and inventory selection. Many of these micro traders are also unable to access financing. This makes it very challenging for them to run their business properly. All pain points this was even more exacerbated during the pandemic, and the used car market took a huge hit.

"These challenges gave Moladin the opportunity to step in and make a difference. We were able to activate the existing network of agents and empower them by providing tools and support systems (e.g. digital services, inventory pools) to enable them to grow their businesses," said Jovin.

Jovin added, "The results of our efforts can be clearly seen with more agents transacting cars through Moladin now than ever before (productivity has increased by at least 2,5x). Field research also shows that we are now the sole supplier of inventory to most large micro-dealerships. Our efforts have also helped open access to a larger pool of used car supply."

Business focus in 2022

After this funding, massive expansion will be Moladin's focus over the next year. They target to be present in 175 cities with 250 branches and warehouse. "We will further improve business processes and optimize digital services to improve the user experience of our agents and customers, making transactions and payment disbursement safer, faster and much smoother," he said.

"The success of our agents will always be a key focus area, and we will continue to invest in our agents and their development. We believe that a better agent experience will ultimately translate into a better customer experience. Our mission is to be a positive catalyst in physical and social mobility of everyone involved in it," concluded Jovin.