Go Back   Team-BHP > BHP India > The Indian Car Scene


Reply
 
Thread Tools Search this Thread
Old 26th August 2016, 16:38   #1
GTO
Team-BHP Support
 
GTO's Avatar
 
Join Date: Feb 2004
Location: Bombay
Posts: 47,140
Thanked: 84,998 Times
Default Used car marketplace - GoZoomo - shuts down. Returns $$$ to investors!

Quite a unique case. Those interested in the used car market must also check out the recent report by Mahindra First Choice - link to discussion.

Thanks to Thousif Ameer Khan for sharing this article from TechinAsia.

Quote:
This is rare among Indian startups.

A two-year-old startup raises US$7 million from top VCs, has more than half of it left in the bank, but decides to return the money to its investors.

Used car marketplace GoZoomo, which had shown much promise in tackling the problem of mistrust in this space, is shutting down. The founding team of three IITians decided that the unit economics were not adding up, despite several iterations in the business model. They looked at the data objectively and took the tough decision to shut shop instead of burning VC money on an unsustainable business.
GTO is offline   (23) Thanks Reply With Quote
Old 27th August 2016, 16:26   #2
Distinguished - BHPian
 
smartcat's Avatar
 
Join Date: Jun 2007
Location: Bangalore
Posts: 2,837
Thanked: 10,859 Times
Default Re: Used car marketplace - GoZoomo - shuts down. Returns $$$ to investors!

I have used them before - admittedly, I was scratching my head as to what their business model was.

I had put up my car for sale on OLX. These guys got my contact number from there. A very competent evaluator (pretty much identified all the flaws with my car, even though I did not point it out myself) came home, took 20 photos, asked my asking price, gave a rating of 4.1 out of 5 and posted it on GoZoomo.com

Hiring such a competent evaluator (who was apparently working at Maruti TrueValue before) and his travel expenses (he came over to my place) I guess was one of the cash-burners for this startup. Anyway, I did not receive a single enquiry from that website though - which means GoZoomo was not that well known among car buyers thanks to competition from numerous alternative websites (Carwale, OLX, Quikr etc).

One big advantage of buying/selling via GoZoomo was that car ownership transfer (all the RTO stuff) is taken care of by them. Ownership transfer is one of the biggest hassle of buying/selling cars privately.

Let's keep an eye on Droom.in - they are advertising a lot on Youtube.
smartcat is offline   (16) Thanks Reply With Quote
Old 27th August 2016, 17:04   #3
Distinguished - BHPian
 
drmohitg's Avatar
 
Join Date: Sep 2010
Location: Delhi
Posts: 4,455
Thanked: 3,561 Times
Default Re: Used car marketplace - GoZoomo - shuts down. Returns $$$ to investors!

Quote:
Originally Posted by smartcat View Post
Anyway, I did not receive a single enquiry from that website though - which means GoZoomo was not that well known among car buyers thanks to competition from numerous alternative websites (Carwale, OLX, Quikr etc).
+1. They quite possibly lagged in advertising. For example, this is the first time I heard about them. If that is the scene with active members of a car forum then it would be worse for non-enthusiasts.
drmohitg is online now   (11) Thanks Reply With Quote
Old 27th August 2016, 18:01   #4
BHPian
 
vantheman5211's Avatar
 
Join Date: Apr 2013
Location: Mumbai
Posts: 28
Thanked: 8 Times
Default Re: Used car marketplace - GoZoomo - shuts down. Returns $$$ to investors!

I have been a buyer as well as a seller in the used car market in the last year. This is the first time I am hearing about their service.

A lot of people will forego some cash in return for convenience, especially ownership transfer. My arm chair guess is that their marketing(or the lack of it) failed big time to get the word out.
vantheman5211 is offline   (1) Thanks Reply With Quote
Old 27th August 2016, 18:20   #5
BHPian
 
Grr7's Avatar
 
Join Date: Jul 2012
Location: Delhi
Posts: 186
Thanked: 189 Times
Default Re: Used car marketplace - GoZoomo - shuts down. Returns $$$ to investors!

OT: Of-late, Quikr has improvised their model. And they have started offering facility to get your car ownership transferred to new owner. They collect documents from both the parties and do all the processing, at a fee.

They are even offering facility of HP removal from RC.

I am sure they are doing it in collaboration with some touts at authority thereby increasing corruption as well.
Grr7 is offline   (2) Thanks Reply With Quote
Old 28th August 2016, 01:28   #6
Senior - BHPian
 
S2!!!'s Avatar
 
Join Date: Mar 2008
Location: Mumbai
Posts: 1,801
Thanked: 8,974 Times
Default Re: Used car marketplace - GoZoomo - shuts down. Returns $$$ to investors!

Quote:
Originally Posted by smartcat View Post
I have used them before - admittedly, I was scratching my head as to what their business model was.
I had a similar experience as you did. The evaluator seemed like a knowledgeable guy and I do remember him clicking multiple pictures of the exteriors and interiors of the car. I asked him as to how they'd benefit from this entire process as it was free for the seller. He mentioned that they have they charge the buyer a small fee to do the entire paperwork during the transfer process. Still, it just didn't sound like a lucrative business model. Not surprising that they finally pulled their shutters down.


There's another service called Truebil who ran on the same model. But here's the crazy part - these guys actually give the seller an incentive of up to Rs. 3,000 (at least it was available a few months ago) if the car is sold through them. The representative even encouraged me to ask the buyer of the car (came from another source) to purchase the car through their website as that would automatically make me eligible for the incentive and they'd also handle the entire paperwork on behalf of the buyer. I get the whole word-of-mouth marketing thing but in the long run such businesses end up burning more money rather than making any.
S2!!! is offline   (4) Thanks Reply With Quote
Old 28th August 2016, 08:16   #7
BHPian
 
Shashankjk's Avatar
 
Join Date: Jan 2016
Location: Pune
Posts: 78
Thanked: 40 Times
Default

Oh. I had used their car service when I tried to sell my 2011 vxi Ritz. Had exactly same experience as smartcat above and infact they got me couple of interested folks. The guy who was trying to buy my car was friend of one of the founders and he got lot of the coordinators to call me up to convince me to lower down my price but never tried to push me enough when they knew that I knew what I was quoting. I was puzzled by their business model and asked them - got an answer that they believe in publicity by word of mouth. Anyways long story short, I decided to keep my hatchback as second option to take to congested areas of the city where parking is always a problem and I would say that was a very good decision. Anyways RIP gozoomo. I believe they had sincerity in doing their business and were meticulous enough. Only if they would have done more publicity, it might have helped them.
Shashankjk is offline   (2) Thanks Reply With Quote
Old 28th August 2016, 08:23   #8
Senior - BHPian
 
arunphilip's Avatar
 
Join Date: May 2007
Location: Chennai
Posts: 1,724
Thanked: 4,686 Times
Default Re: Used car marketplace - GoZoomo - shuts down. Returns $$$ to investors!

Quote:
Originally Posted by GTO View Post
"A two-year-old startup raises US$7 million from top VCs, has more than half of it left in the bank, but decides to return the money to its investors.

They looked at the data objectively and took the tough decision to shut shop instead of burning VC money on an unsustainable business."
Nice - it will increase the credibility of the founders if they ever go out seeking VC funding for another idea.

Its ironic - having seen how pragmatic and ethical they were, it makes me wish they hadn't shut down.

And yes, add me to the list of people who've not heard of them - and I sold my Getz in May!

Last edited by arunphilip : 28th August 2016 at 08:30.
arunphilip is offline   (3) Thanks Reply With Quote
Old 28th August 2016, 10:04   #9
BHPian
 
Join Date: Jan 2014
Location: mum,lko,kolkata
Posts: 688
Thanked: 652 Times
Default Re: Used car marketplace - GoZoomo - shuts down. Returns $$$ to investors!

It seems to be an accepted no-brainer that applying business models to something as amorphous (& packed with variables) as the pre-owned car sector would be doomed from the start. Our country (once described as a "functioning anarchy" and this applies perfectly well today also) or rather our 2nd hand car sector is still too chaotic & filled with charlatans for any clear picture to emerge. Since I'm in the market for such a vehicle, I've come across snake-oil merchants of all kinds. And until market forces ensure some sort of order/accountability (survival of the fittest would seem to fit the bill) one can just hope that you don't end up with a lemon on your hands.
shashanka is offline   (1) Thanks Reply With Quote
Old 28th August 2016, 18:08   #10
BHPian
 
Nissan1180's Avatar
 
Join Date: May 2010
Location: Singapore
Posts: 348
Thanked: 644 Times
Default Re: Used car marketplace - GoZoomo - shuts down. Returns $$$ to investors!

Quote:
Originally Posted by smartcat View Post
I have used them before - admittedly, I was scratching my head as to what their business model was.

I had put up my car for sale on OLX. These guys got my contact number from there. A very competent evaluator (pretty much identified all the flaws with my car, even though I did not point it out myself) came home, took 20 photos, asked my asking price, gave a rating of 4.1 out of 5 and posted it on GoZoomo.com
One of the reasons why they were forced to shut down was that there were people who agreed to get the car evaluated and then went ahead and listed the car on other sites for making the transaction. Buyers would see that a certain model was a few thousands more on the site when compared to Olx and they would go to Olx, without realizing that trust is the most important thing in a used car transaction, and Olx is the last place where you can find someone to trust.
Mahindra first choice also promised "checks" on cars, but their checking process is a sham. They routinely lie and hide facts and their sales executives are not known for being honest. We've had a very bad experience with them in the past, simply because we were foolish enough to believe their evaluation report.
If GoZoomo had such a stringent evaluation policy (as you have mentioned), it is sad that they had to shut down. I guess ethics and integrity will be hard to sell in the used car industry in this country.
If I recall my experience in buying a used car on Olx, it was pathetic. The guy wanted the money in cash and I obliged because the car seemed to be too good for the price. I regretted later on.
We definitely need successful startups in the used car market. TrueValue is great, but that's it. There's no other company in India whose used car evaluation process you can trust (I've read instances of people being cheated at Toyota, Tata and Hyuandai as well).
Nissan1180 is offline   (2) Thanks Reply With Quote
Old 28th August 2016, 18:34   #11
BHPian
 
hrman's Avatar
 
Join Date: Jun 2006
Location: Bangalore
Posts: 893
Thanked: 331 Times
Default Re: Used car marketplace - GoZoomo - shuts down. Returns $$$ to investors!

Quote:
Originally Posted by Nissan1180 View Post
If I recall my experience in buying a used car on Olx, it was pathetic. The guy wanted the money in cash and I obliged because the car seemed to be too good for the price. I regretted later on.
.
Can you elaborate a bit on the regretted part for the benefit of BHPians. If you have posted a separate thread on this please let me know the link.

Coming to the topic, it is indeed refreshing to see new age entrepreneurs who respect the VCs money and ended up returning the unused portion since their business model was not feasible anynore.
Their response was "let this capital be used somewhere useful". Takes a lot of guts and honesty to do that.
Sad to see it fail. I am looking forward to see more online marketplaces (trustworthy ones) coming up and thriving in this space, which is currently highly disorganised and run by dishonest frauds and cheats out to make a quick buck at the cost of gullible buyers.
hrman is offline   (1) Thanks Reply With Quote
Old 28th August 2016, 18:59   #12
BHPian
 
Join Date: Mar 2016
Location: Bangalore
Posts: 68
Thanked: 72 Times
Default

I have used this website when I bought my Fiesta. The car was listed on GoZoomo. I got in touch with the buyer by registering on GoZoomo. And the Car description was also on point. However, as a buyer I had no incentive or need to pursue it further on the website and I could not rely on the website report wholly. 1) They would charge me if I took them along for another inspection when they had already inspected the car. There was no need for me take their opinion. However, I took along my own mechanic for a second opinion. 2) There was no need for me to use the market place once a contact with the seller was established. Taking the third party out of the picture. So basically though I bought my car via the website. It was more a classifieds rather than marketplace.
NiXTriX2004 is offline   (2) Thanks Reply With Quote
Old 28th August 2016, 19:03   #13
Senior - BHPian
 
hserus's Avatar
 
Join Date: Sep 2014
Location: Chennai
Posts: 1,807
Thanked: 1,782 Times
Default Re: Used car marketplace - GoZoomo - shuts down. Returns $$$ to investors!

Cash transaction for used car quite often ends up in your buying a lemon or even worse a stolen car. And if the full money has been forked out before transfer the seller or more likely petty broker who bought it from the seller and is reselling it without changing the name from the seller will decamp with it and won't refund a penny
hserus is offline   Reply With Quote
Old 29th August 2016, 12:28   #14
GTO
Team-BHP Support
 
GTO's Avatar
 
Join Date: Feb 2004
Location: Bombay
Posts: 47,140
Thanked: 84,998 Times
Default Re: Used car marketplace - GoZoomo - shuts down. Returns $$$ to investors!

Quote:
Originally Posted by S2!!! View Post
I had a similar experience as you did. The evaluator seemed like a knowledgeable guy and I do remember him clicking multiple pictures of the exteriors and interiors of the car.
Ah, I remember the Civic being listed on GoZoomo.

Quote:
But here's the crazy part - these guys actually give the seller an incentive of up to Rs. 3,000 (at least it was available a few months ago) if the car is sold through them
A way to boost their GMV . 'Look investors, we sold cars worth 10 crores in February and need more money'. What they miss mentioning is they PAID for the transaction. Similar to how TinyOwl & gang gave 50% discounts on food orders of 200 bucks. Imagine paying 100 bucks to earn a commission of 20. Pardon me, but my old-school conservative business principles just never got the hang of these moves.

Quote:
Originally Posted by shashanka View Post
And until market forces ensure some sort of order/accountability (survival of the fittest would seem to fit the bill) one can just hope that you don't end up with a lemon on your hands.
Just follow our used car checklist to the T and you should be okay. I'm on my 5th used car and very happy. Previous pre-worshipped cars were also perfect.

Quote:
Originally Posted by Nissan1180 View Post
Olx and they would go to Olx
OLX is really killing it in the used car market. When I was looking out, OLX had the widest range of cars. No surprise, that's where I found my latest ride.
GTO is offline   (4) Thanks Reply With Quote
Old 29th August 2016, 12:47   #15
Senior - BHPian
 
Join Date: Nov 2007
Location: Bangalore
Posts: 2,369
Thanked: 519 Times
Default Re: Used car marketplace - GoZoomo - shuts down. Returns $$$ to investors!

Quote:
Originally Posted by smartcat View Post

Hiring such a competent evaluator (who was apparently working at Maruti TrueValue before) and his travel expenses (he came over to my place) I guess was one of the cash-burners for this startup. Anyway, I did not receive a single enquiry from that website though - which means GoZoomo was not that well known among car buyers thanks to competition from numerous alternative websites (Carwale, OLX, Quikr etc).
In today's world with so much information overflow, reduced span of attention, one needs to really spend lot on marketing and advertising to get a mind share.
If they are adding lot of value (which costs money) they obviously need to position their service as premium and not compete directly with the likes of OLX and hope to survive.
Guna is offline   (1) Thanks Reply With Quote
Reply


Thread Tools Search this Thread
Search this Thread:

Advanced Search


Similar Threads
Thread Thread Starter Forum Replies Last Post
Diesel Cars: Down, down, down! Market share = 34% S2!!! The Indian Car Scene 66 2nd June 2016 16:21
German car maker Wiesmann to be revived by investors ac 427 The International Automotive Scene 2 25th November 2015 20:24
Marketshare Winners and Losers in the marketplace GTO The Indian Car Scene 5 14th August 2004 18:18


All times are GMT +5.5. The time now is 03:55.

Copyright 2000 - 2017, Team-BHP.com
Proudly powered by E2E Networks