India is the world's largest two-wheeler market with 170mm+ registered vehicles as of March 2016. Despite the large base, sales of new motor cycles have continued to be strong (20mm+ annually) showcasing the massive depth of the market. This is also evident from the presence of 20k+ OEM showrooms across 800+ cities & towns all over India.
On the other hand, the used-two-wheeler market, which is expected to account for 30mm units exchanged every year, remains extremely unorganised, characterised by high trust deficit arising out of opaque pricing, suspect product quality & absence of after-sales service. Existing classified platforms are the current best alternative but have been unable to adequately solve for trust deficit and provide a seamless buying experience. This has left a large gap to be bridged.
CredR, with its asset light (franchise-led) O2O (Online to Offline) distribution model, has scaled rapidly to 50 showrooms to become India's leading used motorcycle brand in the country. While the online channel helps CredR leverage the growing internet user base to raise awareness, generate interest and build a strong brand, showrooms facilitate a standardised and transparent purchasing experience to the consumer. We believe a large transaction value and high touch category like motorcycles will continue to be best served with an O2O model both today and in the future.
On the supply side, CredR has diversified channels, with a significant portion coming via Original Equipment Manufacturer (OEM) showroom partnerships that continue to be focal points for used bike exchanges. Showrooms view these exchanges as opportunities to sell new motorcycles and have traditionally relied on offline used motorcycle dealers for closure. This process is cumbersome yielding extremely low conversion rates and significant missed opportunities. Identifying the challenge, CredR has grown to become the preferred exchange partner across leading OEMs. This has proven to be a winning strategy for all stakeholders involved: seller is given a competitive quote in real-time (based on the significant intelligence built by CredR across cities, models, vintages, etc. over time) and is assured of a transparent RC transfer process, showrooms are able to drive more volumes and CredR can leverage the existing distribution and user network of the showrooms for acquisition of inventory at low costs and build credibility.
On the demand side, a multi-OEM approach has helped CredR offer a wide range of options to the buyer across varied price points. Value-added services such as 7-day buy protect and 6-month warranty have proven to be significant differentiators with buyers. This 'full-stack' approach has helped CredR build significant expertise in cost-efficient refurbishment that has further deepened competitive advantage. We are also excited by the strong adjacency to fast-scaling mobility, food-delivery and e-commerce companies whose economics could stand to benefit from a such a solution.
We are thrilled to partner with Nikhil, Sasidhar and the entire CredR team as they pursue their vision to grow their model 100x from here to a 5000+ touch point strong distribution network and build a trusted multi-OEM motorcycle online & offline brand catering to the needs of 1mm+ low to middle income (LMI) buyers over the next few years. This would additionally imply a transparent, hassle-free and competitively priced transaction for 1mm+ sellers who can upgrade.
Additionally, we hope CredR could establish sustainability of this model and catalyse similar O2O companies in other categories to provide trusted products and services for the LMI population. In due course, we expect CredR to leverage their network to play a key role in India's EV adoption and evolution.
Omidyar Network India invests in bold entrepreneurs who help create a meaningful life for every Indian, especially the hundreds of millions of Indians in low-income and lower-middle-income populations, ranging from the poorest among us to the existing middle class. To drive empowerment and impact at scale, we work with entrepreneurs in the private, nonprofit and public sectors, who are tackling India’s hardest and most chronic problems. We invest in the areas of Advancing Cities, Digital Society, Education & Employability, Emerging Technologies, Financial Inclusion & Well-being and Property Inclusivity. Omidyar Network India is part of the Omidyar Group, a diverse collection of companies, organizations and initiatives, supported by philanthropists Pam and Pierre Omidyar, founder of eBay.