By Alang Bendahara
IN July 2021, Malaysia birthed its first unicorn — a privately held, venture capital-backed startup valued at more than US$1 billion — in the form of Carsome, a Selangor-grown company that at its heart, is a dealer in used cars.
What makes Carsome different (and it is different) is its promise to provide customers with clear and honest solutions when buying a vehicle, by offering them information that is driven by data and technology.
Keen to know more about the business, which is the largest of its kind in Southeast Asia, Selangor Journal organised an interview with its co-founder and group chief executive officer, Eric Cheng.
In 2015, Cheng teamed up with co-founder Teoh Jiun Ee to — in their own words — disrupt the fragmented used-car market in Malaysia. It was a Herculean task for the ambitious duo.
“Success to me is being able to make a positive difference in the used-car space.
Carsome has achieved significant milestones in a short span of time, but there is definitely more to do.
“The list is pretty long but the most prominent lesson has been the importance of a solid team and its impact on the business. I’m extremely grateful to be able to call a diverse, high-calibre group of people my team,” he said.
Cheng is also grateful that their journey began in Selangor, which is committed to helping grow startups through its digitalisation agenda.
“We applaud the Selangor government’s commitment to growing the digital economy. Since our humble beginnings in Kelana Jaya, we have benefited from the business-friendly environment fostered by the state.”
Cheng looks forward to sharing Carsome’s success with the people of Selangor, as he believes that more industry consultation and public-private partnerships can help supercharge the state’s vision.
“On our end, we’re ready to work with state agencies like the Selangor Information Technology & Digital Economy Corporation (Sidec) to grow the digital ecosystem together,” he said.
A new journey
The idea to start Carsome began when Cheng had a frustrating experience when trying to buy a used car. He did not know who he could trust or where to go to get information.
“The entire journey involved layers of communication and a lengthy transaction process. I soon realised it was a huge, unorganised, fragmented market ripe for digital disruption.”
Today, Carsome has e-commerce operations across Malaysia, Indonesia, Thailand and Singapore, providing advice on content consumption, vehicle inspection, ownership transfer and financing, and promising to bring trust, choice and transparency to their customers.
Shifting gears
Cheng said the used-car market in Southeast Asia is massive and worth over US$102 billion by transaction value in 2021.
“It represents the region’s second-largest consumer product category and will grow rapidly in the next five years, driven by the rising middle class, increasing disposable income and customers’ preference towards private transportation for safety and sanity considerations,” he said.
Yet, transactions are mostly done offline with only 1.3 per cent of e-commerce penetration. “This number is expected to reach 7.4 per cent in the next five years. On our platform, we’ve already seen about 30 per cent of customers completing the full journey online. So we are definitely excited to be at the forefront of the digital disruption,” he said.
When Covid-19 happened, it did not pull the handbrakes on the business.
Cheng said they used the down-time to enhance their digital offerings and online experience for customers. Such groundwork helped their dealers to trade their inventory to Carsome during the demand-disrupted period, which enhanced its brand equity among the dealer network.
Cheng and Teoh also managed to shift resources around internally to launch their retail business, which has now become the fastest-growing arm of the company.
Full speed ahead
With over 2,000 staff in Malaysia alone and a 4,000-strong global workforce, Carsome views the people it hires as its biggest asset.
Cheng said developing talent is the company’s primary focus. This is why in 2021 it set up the Carsome Academy in Malaysia, Indonesia and Thailand, which offers youths technical training and career opportunities upon graduation.
Also in 2021, Carsome partnered with Sunway University to set up a Data Innovation Lab to grow talents for the region. Most recently it opened its biggest indoor showroom at Carsome PJ Automall in Petaling Jaya.
For the future, Cheng said he wishes to see more effort from governments to recognise technopreneurs, as they are keen to contribute their knowledge and experience to their country.
“Better public-private cooperation can help craft policies that enhance the ecosystem, create more startups, as well as boost the growth of existing businesses — which will in turn lead to more jobs, strengthen Malaysia’s prospects to investors and create a positive ripple effect in the economy,” he said.
This article first appeared in the Selangor Journal monthly July edition, published on July 3, 2022.
