Rocket Internet’s car classifieds site has been struggling in Vietnam

Traffic in Ho Chi Minh City. Fram is betting on significant demand for new and used cars and motorbikes with its acquisition of Carmudi.vn. Photo credit: xuanhuongho / 123RF.

The Vietnam branch of Carmudi, a Rocket Internet-backed group of car classifieds sites, has been acquired in a cash-only deal worth US$50,000.

According to buyer Fram – a Swedish-Vietnamese IT service provider and venture builder which listed on Stockholm’s Nasdaq First North exchange last month – Carmudi.vn had a turnover of close to US$190,000 between January and September this year, but made a loss of more than US$506,000. In 2016, it made US$169,000 with a loss of US$518,000. The site had around 1.1 million organic page views in September 2017.

Fram has obtained a 95 percent stake in Carmudi Vietnam as a result of the purchase. The deal gives Fram rights to use the Carmudi brand indefinitely in Vietnam, including ownership of the “carmudi.vn” domain, and a license to conduct marketplace-based ecommerce in the country. 

Fram confirmed to Tech in Asia that it intends to use the license to build additional ecommerce businesses in the country.

Germany-based incubator Rocket established Carmudi in 2013 as an online marketplace for new and used vehicles in some of the world’s fastest-developing markets.

Buyers and sellers can post and search classifieds on the portal, with revenue mainly coming from advertising fees and the sale of ad space.

Local versions of Carmudi have been launched in countries including Bangladesh, Indonesia, Myanmar, Pakistan, and the Philippines, and outside the Asia-Pacific in places like Mexico and Saudi Arabia. In some cases, Rocket rebranded existing classifieds sites under the Carmudi name. Carmudi.vn launched in 2014.

Carmudi raised US$10 million funding in April 2014, and a further US$25 million the following February.

At the time of that second fundraise, Carmudi said that it had a growth rate of over 50 percent across all of its 20 markets, seven of which were in Asia.

“We are on track in all our markets,” co-founder and global managing director Stefan Haubold said at the time. “In general, we are gaining ground in those markets where people have the financial means to buy and sell cars and motorcycles, and there is ample infrastructure in place. Political and economic stability plays a great role as well.”

Fram chairman and co-founder Christopher Beselin – who previously served as Lazada’s CEO in Vietnam – confirmed to Tech in Asia that his company plans to do a “complete restart and revamp” of Carmudi.vn. All existing employees have either left or have joined Carmudi’s international operation. Running costs have been stopped, though the site is still operational.

“Our plans indicate that we should be able to operate the business at around a quarter of previous running costs, without much, or any, negative impact on the revenues,” said Beselin. “Overall we like the industry as car retail is one of the fastest growing consumer categories in Vietnam – around 35 to 55 percent per annum over the last three years – and 2018 is set to be a “golden auto year” for Vietnam as the import tariffs from ASEAN goes from 30 percent to 0 percent as of January 1 2018.”

In Vietnam. Carmudi faces competition from a range of online portals including Anycar, Mua Ban Oto, muaxe24.com, and Caramo, which raised seed funding in March.

Frontier Digital Ventures – a Catcha Group-backed company that invests in and operates online classifieds sites across emerging markets – has also made inroads into new and used vehicle sales in the region. In June it invested US$2.3 million into Philippine auto marketplace Autodeal.

Converted from Swedish krona and Vietnamese dong. Rate: US$1 = SEK 8.28 = VND 22,639.32.

This post Rocket Internet’s car classifieds site has been struggling in Vietnam appeared first on Tech in Asia.

from Tech in Asia https://www.techinasia.com/carmudi-vietnam-fram
via IFTTT