Otofrens Ambition to Realize Transparency of the Used Car Buying and Selling Market in Indonesia
In its debut, Otofrens has booked angel round funding from a number of investors
The used car buying and selling market is said to have experienced significant growth in recent years. Investments made by industry players to build a network of dealers also affect the improvement of the quality and reliability of used cars, which in turn stimulates consumer interest. In addition, the pandemic which has an impact on the decline in customers' purchasing power for new cars is referred to as a factor in increasing the volume of used car sales.
In the business of buying and selling used cars, private car sellers are often faced with two choices, namely selling to dealers and hassle-free instant selling platforms at lower prices, or selling casually to direct users but having to be prepared for the hassle. Otofrens is here to assist market segments that want to sell casually without any hassle. In addition, the company also offers a complete warranty and service as a dealer, with transparency and competitive prices from direct users.
Autofrens established two co-founder, namely David Alexander (CEO) and Onie Sunoto (CTO). Previously, the company claimed to have operated under the name Prodiler which was originally created as a SaaS platform for used car dealers, then pivot become a platform for selling cars. PT Otofrens Teman Favorite officially launched in August 2022.
In its operation, each car will be inspected professionally, then marketed with optimal photos, videos and advertisements. The seller can monitor the whole process directly online, to meet with serious prospective buyers for final negotiations. Thus, sellers no longer need to serve potential buyers who are less serious, traders who bid at below market prices, or fraudulent modes.
From the buyer's side, they will get a comprehensive inspection report, so they have the right expectations before seeing the car in person, which can be done at the seller's location or at the service. home test drive at the buyer's location.
In addition, users are also offered benefits such as engine & transmission guarantees, flood & collision free guarantees, honest & complete credit options, repairs, to document processing. With these various added values, practically the car has the opportunity to be sold at the best price, although it is still more competitive than the dealer's selling price.
During the marketing process, the car can still be used by the owner because it does not need to be deposited. Commissions are only paid if the car is successfully sold through Otofrens.
"As automotive lovers, we are not satisfied with the current state of the industry and the direction brought by the big players. That's why we chose to fight through this startup to realize our dream for the industry. This can only be realized with the support of our fellow actors and all automotive lovers," said David.
The company itself has been supported by several investors who believe in its vision and mission. Currently there are about 3 angel investors who chose not to be named. They are part of co-founding team (as advisor) with a background in digital industry practitioners in Indonesia (E-commerce and digital advertising).
Promote efficiency and transparency
David also reveals the times of ups and downs and back to zero. According to him, the biggest challenge is building user trust, okay seller nor buyers. This is due to the lack of transparency in this industry. Especially as a new player, it is not easy to build a reputation in a short time.
The company positions itself as a "matchmaking agency" that brings together sellers and buyers of the right used car. Otofrens' big dream is a direct transaction between users that is 100% transparent without distance & time limits, as well as an opportunity for anyone to contribute and earn money. Or in short, being like an ojol for the used car industry.
David said, "Our business model which is different from conventional dealerships makes the process more efficient and transparent. Without holding our own stock, the commission we apply is much lower than the dealer's profit margin. The condition of the car can be seen as it is, and if needed the buyer can choose the repair option as needed. The result is a win-win solution for sellers and buyers from the right segment."
While running this business, David also revealed that his team has collaborated with several financing companies, both conventional and sharia, repair shops, service bureaus, and most recently with Warranty Smart Indonesia for the provision of a machine warranty called "Otofrenshield".
Until now, David revealed that the company still has a relatively small business scale. However, he believes that his team has built increasingly solid fundamentals with consistent organic growth. From the user side, the company can handle around 40-50 units of cars every month.
Currently, the industrial landscape is dominated by two camps. On the one hand, there are a number of large dealers and several giant platforms that are focusing on instant selling services. Basically, they adopt the conventional dealer model with much larger capital and technology support. On the other hand, there are many brokers and home traders who still work in the traditional way and often lack transparency in running their business.
This dichotomy is exactly what happened in the transportation industry a few years ago, until the digital revolution by ojek/taxi online succeeded in bringing good for business actors and consumers. Of course, it is still embedded in our minds, how the resistance of business actors in the initial phase, before they finally realize the benefits.
"We believe that one day people from Sumatra will be able to buy a car from Java without having to come. We believe that one day many ordinary people will be able to earn a living honestly through Otofrens," said Onie Sunoto as co-founder & CTO of Otofrens.
By carrying draft sharing economy, Otofrens services are carried out by 'Teman Buying Cars', like an ojol driver, which is open to all. In the future, the Teman concept will also be applied to MSMEs supporting ecosystems such as workshops, service bureaus, etc. Just like ojol which also has a positive impact on food stalls and other MSMEs.
"Our existence is not intended to replace or kill home brokers and traders. On the contrary, we want to embrace them to work more effectively with the support of technology," said Onie.
David also emphasized that this year, his team is focusing on strengthening the company's fundamentals. "With a strong foundation, we believe we can take off next year. The target is, in the next 2 years, we can handle a total of 1000 cars per month, which will be managed by 100 partners (Friends Selling and Buying Cars)."